HSBC, Apollo, Spirit AeroSystems price; Santander preps notes; Southern firms; CDX tightens

By Cristal Cody

Eureka Springs, Ark., May 24 – Investment-grade primary action remained strong on Tuesday with deal activity expected to continue on Wednesday before slowing ahead of the Memorial Day holiday.

HSBC Holdings plc sold $2 billion of 6.875% perpetual subordinated contingent convertible securities at par.

Apollo Management Holdings, LP brought $500 million of 10-year senior notes to market on Tuesday.

Spirit AeroSystems, Inc. priced $300 million of 10-year senior notes during the session.

Details also emerged about a 100-year bond offering from private liberal arts college Wesleyan University.

Coming up, Santander Holdings USA Inc. plans to return to the primary market with an offering of floating-rate notes following the company’s $1 billion sale on Monday of three-year notes.

The Markit CDX North American Investment Grade index closed the day 4 basis points tighter at a spread of 79 bps.

In the secondary market, Southern Co.’s 3.25% senior notes due 2026 traded about 4 bps better from Monday.

Dell, Inc.’s 6.02% senior secured notes due 2026 were seen 2 bps weaker in secondary trading earlier on Tuesday.

HSBC sells $2 billion

HSBC Holdings sold $2 billion of 6.875% perpetual subordinated contingent convertible securities at par to yield a spread of 547.7 bps over Treasuries on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

HSBC Securities (USA) Inc. was the bookrunner.

The notes are convertible into shares of HSBC upon the occurrence of a capital adequacy trigger event.

Proceeds will be used for general corporate purposes and to strengthen the company’s capital base.

HSBC is a London-based banking and financial services group.

Apollo prices $500 million

Apollo Global Management, LLC subsidiary Apollo Management Holdings sold $500 million of 4.4% 10-year senior notes with a spread of 255 bps over Treasuries on Tuesday, according to a market source and a company release.

The notes (/A/A-) were talked to price in the Treasuries plus 255 bps to 260 bps range.

The bonds were sold via Rule 144A and Regulation S.

Goldman Sachs & Co. and J.P. Morgan Securities LLC were the bookrunners.

The notes are guaranteed by Apollo’s indirect subsidiaries Apollo Principal Holdings I, LP, Apollo Principal Holdings II, LP, Apollo Principal Holdings III, LP, Apollo Principal Holdings IV, LP, Apollo Principal Holdings V, LP, Apollo Principal Holdings VI, LP, Apollo Principal Holdings VII, LP, Apollo Principal Holdings VIII, LP, Apollo Principal Holdings IX, LP, Apollo Principal Holdings X, LP, Apollo Principal Holdings XI, LLC and AMH Holdings (Cayman), LP.

Proceeds from the deal will be used for general corporate purposes.

Apollo is an alternative investment manager based in New York.

Spirit AeroSystems in primary

Spirit AeroSystems priced $300 million of 3.85% 10-year senior notes with a spread of 200 bps over Treasuries on Tuesday, according to an FWP filing with the SEC.

The notes priced at 99.924 to yield 3.859%.

BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Mizuho Securities USA Inc., RBC Capital Markets, LLC and Scotia Capital (USA) Inc. were the bookrunners.

The notes are guaranteed by parent company Spirit AeroSystems Holdings, Inc. and its domestic subsidiaries other than Spirit AeroSystems, Inc.

Proceeds, together with cash, will be used to repurchase outstanding 6¾% senior notes due 2020 or for other general corporate purposes.

Spirit AeroSystems is a Wichita, Kan.-based maker of commercial and military airplane components, including fuselages, propulsion systems and wings.

Wesleyan sells 100-year bonds

Wesleyan University sold $250 million of 4.781% 100-year taxable bonds with a spread of 215 basis points over Treasuries late on Monday, according to a market source.

The bonds (Aa3//) are due July 1, 2116.

Goldman Sachs was the bookrunner.

Proceeds will be used to refinance and legally defease the university’s outstanding series G bonds and to finance capital projects.

Wesleyan University is a private liberal arts college in Middleton, Conn.

Santander to return to market

Santander Holdings USA plans to price an offering of senior floating-rate notes, according to a 424B3 filing with the SEC.

JPMorgan is the bookrunner.

Proceeds will be used for general corporate purposes.

Santander Holdings USA on Monday sold $1 billion of 2.7% senior notes due May 24, 2019 at 99.98 to yield 2.707% and a spread of 165 bps over Treasuries.

Boston-based Santander Holdings USA is the parent company of Sovereign Bank and a subsidiary of Spain’s Banco Santander, SA.

Southern improves

Southern’s 3.25% notes due 2026 were quoted about 4 bps tighter from where the bonds traded on Monday at 140 bps offered on Tuesday morning, according to a market source.

Southern sold $1.75 billion of the notes (Baa2/BBB+/A-) on Thursday at 145 bps over Treasuries.

The electric utility company is based in Atlanta.

Dell softens

Dell’s 6.02% notes due 2026 eased 2 bps from Monday to 421 bps offered in secondary trading early Tuesday, a market source said.

The company sold $3.75 billion of the notes (Baa3/BBB-/BBB-) on May 17 at Treasuries plus 425 bps.

The technology and services company is based in Round Rock, Texas.

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