Baxalta, Energy Transfer, JPMorgan price following dovish Fed statement; Time Warner mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, June 18 – Baxalta Inc., Energy Transfer Partners LP, Occidental Petroleum Corp. and JPMorgan Chase & Co. came to market during an active Thursday for investment-grade bonds.

The unsurprisingly busy session and positive tone came on the heels of a dovish statement from the Federal Reserve following its two-day policy meeting on Wednesday.

Baxalta priced a $5 billion six-tranche offering to fund a dividend payment to Baxter International Inc. in conjuncture with its spinoff from the company.

The deal garnered an order book that was more than three times oversubscribed.

Also on Thursday, Energy Transfer Partners sold $3 billion of senior notes in new and reopened tranches.

JPMorgan Chase priced a $2.25 billion offering of senior holding company notes, while Occidental Petroleum issued both tranches of its $1.5 billion offering at the tight end of price talk.

The session also hosted Digital Realty Inc., which sold an upsized $500 million issue of senior notes.

In total, $12.25 billion of new issuance priced on Thursday, bringing the week’s total supply to more than $21 billion.

Investment-grade bonds traded mostly better over the day.

The Markit CDX North American Investment Grade series 23 index firmed 2 basis points to a spread of 68 bps.

Marathon Oil Corp.’s senior notes (Baa1/BBB/) were flat to 2 bps tighter.

Time Warner Inc.’s bonds (Baa2/BBB) were mixed in secondary trading.

Baxalta sells $5 billion

Baxalta priced a $5 billion issue of senior notes (Baa2/BBB+/BBB+) in six tranches on Thursday, a market source said.

The company sold $500 million of 2% three-year notes at Treasuries plus 100 bps.

A $250 million three-year floating-rate note sold at Libor plus 78 bps.

There was also $1 billion of 2.875% five-year notes priced at Treasuries plus 125 bps.

A $500 million 3.6% seven-year note sold with a spread of 155 bps over Treasuries.

Also priced was $1.75 billion of 4% 10-year notes at Treasuries plus 175 bps.

Finally, $1 billion of 5.25% 30-year bonds priced at Treasuries plus 215 bps.

All tranches sold at the tight end of price guidance.

The bookrunners for the Rule 144A and Regulation S deal were Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, UBS Securities LLC, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Deerfield, Ill.-based health-care company Baxter International Inc. is performing a spinoff of Baxalta, its biopharmaceutical division.

Proceeds are for a one-time special dividend payment to Baxter in conjunction with the spinoff.

Energy Transfer new issue

Also on Thursday, Energy Transfer Partners priced $3 billion of senior notes (Baa3/BBB-/) in four parts, according to a market source.

The sale included $650 million of 2.5% notes due June 15, 2018 priced at Treasuries plus 150 bps. Pricing was at 99.946 to yield 2.519%.

A $350 million add-on to the company’s existing 4.15% notes due Oct. 1, 2020 priced at 103.113 to yield 3.479% with a spread of Treasuries plus 185 bps.

The original $700 million issue sold at Treasuries plus 185 bps on Sept. 12, 2013.

There was also $1 billion of 4.75% notes due Jan. 15, 2026 priced at 99.275 to yield 4.838%, or Treasuries plus 250 bps.

A $1 billion 6.125% note due Dec. 15, 2045 sold at 99.619 to yield 6.153%. The notes priced with a spread of Treasuries plus 300 bps.

Deutsche Bank Securities, MUFG and Wells Fargo Securities LLC are the joint bookrunners.

Proceeds will be used to repay borrowings outstanding under the company’s revolving credit facility, to fund growth capital expenditures and for general partnership purposes.

The energy gathering and transportation company is based in Dallas.

JPMorgan holdco notes

JPMorgan Chase was also in the market on Thursday, pricing a $2.25 billion issue of 2.75% five-year senior holding company notes (A3/A/) at Treasuries plus 115 bps, according to an informed source.

Pricing was at 99.828 to yield 2.77%.

The notes sold on top of guidance, which had firmed from initial talk set in the Treasuries plus 120 bps area.

JPMorgan was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in New York City.

Occidental Petroleum two-parter

The primary market also saw Occidental Petroleum price $1.5 billion of senior notes (A2/A) in 10- and 30-year tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

There was $750 million of 3.5% notes due 2025 priced at 99.742 to yield 3.531%, or Treasuries plus 117 bps.

The notes sold at the tight end of the Treasuries plus 120 bps area guidance. Initial talk was set in the Treasuries plus 135 bps area.

A second tranche was $750 million of 4.625% notes due 2045 priced at 98.929 to yield 4.692% with a spread of 152 bps over Treasuries.

Pricing was at the tight end of guidance set in the Treasuries plus 155 bps area after having firmed from initial talk set in the area of 175 bps over Treasuries.

BofA Merrill Lynch, Citigroup Global Markets, JPMorgan and Wells Fargo Securities are the bookrunners.

Proceeds will be used for general corporate purposes.

The oil and gas, chemical and midstream company is based in Los Angeles.

Digital Realty upsizes

Digital Realty Trust sold an upsized $500 million of 3.95% seven-year green bonds on Thursday at Treasuries plus 200 bps, according to a market source.

The notes (Baa2/BBB/) sold on top of talk, which had firmed from initial price thoughts in the range of Treasuries plus 210 bps to 215 bps.

Bookrunners are BofA Merrill Lynch, Citigroup Global Markets and JPMorgan.

Proceeds will be used to fund eligible green projects.

The notes are guaranteed by Digital Realty Trust, Inc.

The manager and owner of technology-related real estate is based in San Francisco.

Marathon Oil flat to better

Marathon Oil’s 3.85% notes due 2025 firmed 2 bps to 179 bps bid on Thursday, according to a market source.

The company sold $900 million of the notes on June 1 at Treasuries plus 170 bps.

Marathon Oil’s 5.2% bonds due 2045 were unchanged on the day at 225 bps bid.

The bonds were sold on June 1 in a $500 million offering at Treasuries plus 225 bps.

The energy company is based in Houston.

Time Warner mixed

Time Warner’s 3.6% notes due 2025 firmed 4 bps during the session to 159 bps bid, according to a market source.

The company sold $1.5 billion of the notes on May 28 at Treasuries plus 150 bps.

Time Warner’s 4.85% debentures due 2045 eased 2 bps to 197 bps bid in the secondary market.

The company sold $600 million of the debentures in the May 28 offering at Treasuries plus 195 bps.

The media company is based in New York.

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