Time Warner, Citi, HSBC sell as large deals dominate; new bonds trade mixed as some widen

By Andrea Heisinger

New York, March 29 - The high-grade bond market remained active on Tuesday with a deal from Time Warner Inc. taking center stage.

Time Warner sold $2 billion of notes with maturities of 2021 and 2041 late in the day. It was the company's first time selling bonds since November.

The media and entertainment company was joined in the market by financial names Citigroup Inc., HSBC Holdings plc and MetLife Institutional Funding II.

HSBC Holdings priced $2.5 billion of 10-year notes at the tight end of guidance. A $750 million sale of three-year floating-rate notes came from Citigroup while MetLife's funding arm priced $1 billion of three-year floaters.

Other corporates in the market included Atlantic City Electric Co. with an upsized $200 million sale of 10-year first mortgage bonds sold early in the afternoon. The size was increased from $150 million.

Verisk Analytics, Inc. priced a split-rated $350 million of 10-year notes.

A sovereign sale came from KfW. The development bank sold $4 billion of three-year notes by early afternoon.

A $2 billion sale of covered bonds in two parts was priced by Nordea Eiendomskreditt AS. Another issuer from Norway was Eksportfinans ASA with a $500 million sale of two-year floaters.

An upcoming $350 million sale of 10-year notes was announced by Verisk Analytics, Inc.

The market tone remained up for the day, sources said early on. Some of the issuance from names like Citigroup and HSBC may have been opportunistic ahead of earnings blackout, a syndicate source away from both sales said.

If the market looks good at the open on Wednesday, there could be a few more deals ahead of the end of the month and Q1, sources said. There are only two more days this week on which issuers are expected to price bonds.

"I would think with all that priced already [this week] that it's not going to be as busy," said one syndicate source. "I haven't heard of anything too major."

The secondary rebounded slightly after a low-volume day to start the week.

The new Atlantic City Electric 10-year notes were seen tightening by late afternoon. The Time Warner tranches were each between 5 and 10 bps tighter. HSBC Holdings also saw its 10-year bonds tighten nicely.

Meanwhile, the Home Depot, Inc. and Dell Inc. bonds sold Monday struggled to make gains in trading.

A Wells Fargo & Co. bond sold the previous week was seen trading wider and was also one of the most active bonds of the day, a source said. An outstanding bond from Home Depot was also popular while the company's two notes sold Monday were mixed in the secondary.

Overall investment-grade Trace volume was up to just over $10 billion, a source said.

"Other than the new bonds, there wasn't much happening," a trader said. "I can't think of one thing we've been watching today."

Time Warner sells at talk

Time Warner priced $2 billion of notes (Baa2/BBB/BBB) in two maturities late in the day, a market source said.

The $1 billion of 4.75% 10-year notes sold at a spread of Treasuries plus 140 bps

A second $1 billion tranche of 6.25% 30-year bonds priced at 180 bps over Treasuries.

Both notes were talked in line with pricing in the 140 bps area and 180 bps area, respectively.

BNP Paribas Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., RBS Securities Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by Historic TW Inc.

Time Warner last tapped the debt market with a $1.9 billion sale in two tranches on Nov. 9. That sale included a 4.125% bond due 2021 priced at 155 bps over Treasuries and a 5.875% tranche due 2040 priced at 180 bps over Treasuries.

The notes due 2021 were quoted between 4 and 7 bps tighter in the secondary, according to a source, and the bonds due 2041 were between 5 and 10 bps better at a bid of 175 bps and offer of 170 bps.

The media and entertainment company is based in New York City.

HSBC's $2.5 billion

HSBC Holdings priced $2.5 billion of 5.1% 10-year senior notes (Aa2/AA-) at a spread of Treasuries plus 165 bps, a market source said.

The notes sold at the tight end of guidance in the 170 bps area with a margin of plus or minus 5 bps.

Bookrunner was HSBC Securities (USA) Inc.

The proceeds will be used for general corporate purposes.

HSBC Holdings last sold bonds in a $1.5 billion sale of 30-year maturities on May 19, 2008.

The new 5.1% notes were seen at a bid of 158 bps and offered at 157 bps after selling at 165 bps, a trader said.

The financial services company is based in London.

Citi prices floaters

Citigroup priced $750 million of three-year floating-rate notes (A3/A/A+) at par to yield Libor plus 9 bps, according to a source who worked on the sale.

Guidance was in the Libor plus 95 bps area, and the notes priced in line with that.

Citigroup Global Markets Inc. was bookrunner.

Proceeds are being used for general corporate purposes.

The financial services company is based in New York City.

MetLife unit sells $1 billion

MetLife Institutional Funding priced $1 billion of three-year floating-rate notes ahead of the close at par to yield Libor plus 90 bps, a source who worked on the sale said.

The notes (Aa3/AA-) were priced under Rule 144A.

Bookrunner was Barclays Capital Inc.

The funding arm of insurance and financial services company MetLife is based in New York City.

Atlantic City Electric's bonds

Atlantic City Electric sold an upsized $200 million of 4.35% 10-year first mortgage bonds (A3/A) to yield Treasuries plus 90 bps, a source close to the deal said.

The size was increased from $150 million.

Citigroup Global Markets Inc., Scotia Capital (USA) Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are going to repay short-term debt and for general corporate purposes.

The notes were slightly tighter in the secondary market, a source said. They were bid at 88 bps and offered at 84 bps after pricing at 90 bps over Treasuries.

The electric company is based in Newark, Delaware.

Nordea sells covered bonds

Nordea Eiendomskreditt priced $2 billion of covered bonds (Aaa/AAA) in two parts via Rule 144A, said a source away from the sale.

The $1 billion of three-year floating-rate notes sold at par to yield Libor plus 42 bps.

A $1 billion tranche of 1.875% three-year notes priced at a spread of Treasuries plus 68.5 bps, or mid-swaps plus 42 bps.

Bookrunners were Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc.

The commercial property financier, and unit of Nordea Bank, is based in Oslo.

Eksportfinans's floaters

Eksportfinans sold $500 million of two-year floating-rate notes (Aa1/AA) at par to yield Libor plus 20 bps, according to an FWP with the Securities and Exchange Commission.

Bookrunners were Deutsche Bank Securities Inc. and Goldman Sachs & Co.

The financier for Norway's export industry is based in Oslo.

KfW's $4 billion

Germany's KfW sold $4 billion of 1.5% three-year global notes (Aaa/AAA/AAA) at 99.933, according to an FWP filing with the SEC.

Credit Suisse Securities LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC were bookrunners.

The development bank is based in Frankfurt.

Verisk split-rated sale

Verisk Analytics is planning a $350 million sale of 10-year split-rated senior notes, an informed source said late Tuesday.

The notes (Ba1/BBB-) are expected to be Wednesday's business, the source said.

They feature a change-of-control put at 101.

Bookrunners are J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Inc.

Proceeds are being used for general corporate purposes, including debt repayment and/or acquisitions.

The sale is guaranteed by Insurance Services Office, Inc. and other subsidiaries that guarantee the company's revolving credit facility.

The financial services company is based in Jersey City, N.J.

Dell bonds trade mixed

Two of the three tranches of fixed-rate notes from Dell were quoted as wider in next-day trading from where they priced, a trader said.

The 3.1% notes due 2016 were sold at 95 bps over Treasuries and were bid 5 bps wider at 100 bps and offered 4 bps wider at 99 bps.

The 4.625% notes due 2021 moved out even more. They were bid at 131 and offered at 130 bps which is between 5 and 6 bps worse than their price of 125 bps.

The 2.15 notes due 2014 did better and tightened from their 85 bps price to a bid of 84 bps and offer of 80 bps.

Home Depot notes stagnant

A two-tranche, $2 billion sale from Home Depot was seen trading on Tuesday at around the same levels as pricing, a source said.

The 5.95% bonds due 2041 tightened between 1 and 3 bps while the 4.4% notes due 2021 were 2 bps wider on the bid side from their price of 97 bps.

Mixed bag in active bonds

None of Monday's bonds was among the most actives as of late Tuesday afternoon, a source said.

An older 3.95% bond due 2020 from Home Depot was popular and trading at 69 bps. It sold at 135 bps over Treasuries on Sept. 7, 2010.

Two bonds from Sanofi-aventis SA's $7 billion deal the previous week were also active.

One of the most active bonds of the day was a 4.6% bond due 2021 from Wells Fargo that sold on March 22 at 130 bps. The bonds were quoted trading wider at 136 bps.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.