Canadian Pacific sells notes; Select Income on deck; Apple, Verizon improve; spreads wider

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 28 – Canadian Pacific Railway Co. came to market on Wednesday in the day’s sole new issue, as the market focused on the Federal Reserve’s statement following the conclusion of its two-day policy meeting.

The deal was upsized to $700 million and sold around 17 basis points tight of guidance.

In forward calendar news, Select Income REIT set price talk for a planned three-part offering of senior notes.

The deal is slated to price during what is predicted to be a busy Thursday session for the high-grade primary.

So far, the market has hosted around $9.3 billion of new issuance this week.

Investment-grade bonds headed out mixed, while credit spreads leaked wider for a second session, according to sources.

The Markit CDX North American Investment Grade index eased 1 bp to a spread of 68 bps.

Apple Inc.’s notes (Aa1/AA+/) traded flat to 5 bps better on the day.

Verizon Communications Inc.’s 2.55% notes due 2019 tightened 3 bps.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 headed out unchanged.

Canadian Pacific upsizes

Canadian Pacific sold an upsized $700 million issue of 2.9% senior notes (Baa1/BBB+/) due 2025 on Wednesday at 112.5 bps over Treasuries, according to a market source and an FWP filed with the Securities and Exchange Commission.

The deal was upsized from $500 million.

Pricing was at 99.957 to yield 2.905%.

The bookrunners were Morgan Stanley & Co. LLC, BofA Merrill Lynch, HSBC Securities, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets LLC and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes.

The railroad operator is based in Calgary, Alta.

Select Income sets talk

Select Income REIT is set to sell a benchmark offering of senior notes (Baa2/BBB-/) in tranches due 2018, 2020 and 2025 on Thursday, according to a market source and a 424B5 filed with the SEC.

Guidance is set in the 237.5 bps area for the three-year notes, 262.5 bps area for the five-year notes and 300 bps to 312.5 bps for the 10-year notes.

The bookrunners are BofA Merrill Lynch, Citigroup Global Markets, Jefferies, Morgan Stanley, RBC Capital Markets and UBS Securities LLC.

Proceeds will be used for general business purposes.

The real estate investment trust owns properties that are primarily net leased to single tenants. The company is based in Newton, Mass.

Apple tightens

Apple’s 3.45% notes due 2024 tightened about 5 bps to 66 bps bid on Wednesday, a market source said.

Apple sold $2.5 billion of the notes at Treasuries plus 77 bps on April 29, 2014.

The computer and mobile communications devices company is based in Cupertino, Calif.

Verizon improves

Verizon’s 2.55% notes due 2019 (Baa1/BBB+/A-) firmed 3 bps in late afternoon secondary trading to 77 bps bid, according to a market source.

Verizon sold $500 million of the notes at 95 bps over Treasuries on March 10, 2014.

The telecommunications company is based in New York City.

Goldman unchanged

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded flat on the day at 148 bps bid, a source said.

Goldman Sachs priced $2.25 billion of the notes on June 30, 2014 at a spread of Treasuries plus 135 bps.

The financial services company is based in New York City.

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