Ventas, GATX price, see huge demand; Mizuho prices privately; Ventas Realty notes tighten

By Aleesia Forni and Andrea Heisinger

New York, March 14 - A small crop of issuers including Mizuho Corporate Bank Ltd., Ventas Realty, LP and GATX Corp. sold high-grade bonds on Thursday.

Ventas priced $500 million of seven-year notes. The size of the sale was increased from a planned $300 million, with about $2.4 billion on the books, a source said.

Transportation leasing company GATX tapped the market for an upsized $500 million of senior notes in two parts to repay commercial paper and other debt. A 10-year note was added to the initial five-year tranche at the launch, an informed source said.

Demand for the sale was about $3 billion total, including about $2.2 billion for the five-year notes and $800 million for the added 10-year bonds.

Mizuho sold $1.5 billion including $1 billion of five-year notes and $500 million of 10-year notes via Rule 144A and Regulation S.

A new sale of preferred stock was priced by Interstate Power & Light Co. The utility sold $200 million of cumulative perpetual preferreds after the size was increased from a minimum of $100 million.

A source said that the slower day of issuance was "kind of a relief" after a busy start to the week.

"We're still seeing demand," said a source who worked on the Ventas sale, which was upsized by $200 million and priced 18 basis points tighter than initial guidance.

Friday is expected to see little to no new issuance. One source said that there wasn't anything on the horizon, and the source wasn't expecting any new deals despite "no material data" coming out such as unemployment or housing statistics.

The Markit CDX Series 18 North American Investment Grade index was seen "unchanged to a bit tighter" at midday and closed 1 bp tighter at 78 bps.

The source added that trading volume hit "just over $2 billion" on the day.

The new issue from Ventas Realty was trading better late during the session, with the seven-year notes quoted 4 bps better.

In recent deals, GlaxoSmithKline Capital Inc.'s $3 billion of senior notes, which priced in three maturities on Wednesday, traded mostly tighter during the session.

Ventas upsizes

Ventas Realty sold an upsized $500 million of 2.7% seven-year senior notes (Baa2/BBB/BBB+) at a spread of 132 bps over Treasuries, a market source said.

The notes were quoted at 128 bps bid, 124 bps offered near the session's close.

Whispered guidance at midday was in the Treasuries plus 150 bps area, an informed source said. The size was increased from $300 million.

The bookrunners were Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Jefferies & Co. and J.P. Morgan Securities LLC.

The sale is guaranteed by Ventas, Inc.

Proceeds are being used to repay debt under an revolving credit facility and for working capital and general corporate purposes, including funding acquisitions and investments.

Ventas was last in the market with a $925 million sale of notes due 2018 and 2022 on Dec. 6.

The real estate investment trust for housing and health-care properties is based in Chicago.

GATX adds 10-year

GATX priced an upsized $500 million of senior notes (Baa2/BBB/) in two maturities, an informed source said.

A 10-year note was added at the launch, doubling the size of the sale from an initial $250 million in a single tranche of five-year notes.

The $250 million of 2.375% five-year bonds sold at a spread of Treasuries plus 155 bps. Initial price talk was in the low 100 bps area.

A $250 million tranche of 3.9% 10-year notes priced at 200 bps over Treasuries.

The bookrunners were Citigroup and Morgan Stanley & Co. LLC.

Proceeds are being used to repay commercial paper, to repay $100 million under an unsecured floating-rate term loan facility due May 17 and for general corporate purposes.

GATX was last in the bond market with a $250 million sale of 10-year notes on June 5, 2012.

The transportation leasing service company is based in Chicago.

IPL's preferreds

Interstate Power & Light sold $200 million of 5.1% series D cumulative perpetual preferred stock, a market source said.

Price talk was 5.25% to 5.375%, according to a trader at midday.

"They'll probably push the yield to 5.125%," he added.

The trader said the issue was "trading well," seeing a $24.92 bid, par offered quote in the midday gray market.

Baird, Barclay, JPMorgan and Wells Fargo Securities LLC were the joint bookrunning managers.

Interstate Power & Light will apply to list the new shares on the New York Stock Exchange under the ticker symbol "IPLPD."

Proceeds will be used for a redemption of the 8.375% series B cumulative perpetual preferreds and for general corporate purposes, including working capital requirements and capital expenditures.

Interstate Power & Light is a Cedar Rapids, Iowa-based public utility.

GSK mostly better

GlaxoSmithKline's $1.25 billion tranche of 0.7% three-year notes was quoted at 31 bps offered during the session.

The notes were sold at a spread of Treasuries plus 35 bps.

Meanwhile, the $1.25 billion of 2.8% 10-year notes were quoted 6 bps tighter at 84 bps bid, 81 bps offered following Wednesday's pricing at a spread of 90 bps over Treasuries.

The $500 million of 4.2% 30-year bonds traded 8 bps tighter at 97 bps bid. GlaxoSmithKline priced the notes at Treasuries plus 105 bps.

Stephanie N. Rotondo contributed to this review

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