Harris meets demand for acquisition financing; IBRD, Citi also price; spreads mostly flat

By Aleesia Forni

Virginia Beach, April 22 – Investment-grade new issues saw a strong reception from investors again on Wednesday, as $12.75 billion of paper hit the tape.

A $2.4 billion trade from Harris Corp. was a highlight of the day’s primary activity, with the deal grabbing more than $16 billion of orders.

The company plans to use proceeds to finance its acquisition of Exelis Inc.

Also on Wednesday, International Bank for Reconstruction and Development (World Bank) and Citigroup Inc. were in the market with $5 billion new issues, respectively, priced at the tight end of price guidance.

World Bank sold a new three-year offering, while Citigroup priced its issue of senior notes in three parts due 2017 and 2025.

Blackstone Holdings Finance Co. LLC priced $350 million of 30-year senior notes around 15 basis points tight of initial price talk during the session, attracting an order book that was more than 4.5 times oversubscribed.

Meantime, investment-grade bond spreads were largely unchanged to modestly tighter on the day overall, a market source said.

The Markit CDX North American Investment Grade series 23 index was 1 bps tighter at a spread of 61 bps.

IBRD three-years

International Bank for Reconstruction and Development (World Bank) sold $5 billion of 1% three-year notes (Aaa/AAA/AAA) on Wednesday at mid-swaps minus 10 bps, according to an informed source and a company news release.

Pricing was at 99.829 to yield 1.056%.

Barclays, BMO Capital, Deutsche Bank Securities Inc. and Nomura Securities International, Inc. were the bookrunners.

The issuer is based in Washington, D.C.

Citigroup brings $5 billion

Citigroup was also in Wednesday’s market with a $5 billion issue of senior notes (Baa2/A-/A) in three tranches due 2017 and 2025, according to a market source.

There was a $1 billion of three-year floater priced to yield Libor plus 69 bps.

A $2.5 billion 1.7% three-year note sold with a spread of Treasuries plus 92 bps.

The notes sold at the tight end of guidance set in the 95 bps area over Treasuries.

Finally, $1.5 billion of 3.3% 10-year notes sold at Treasuries plus 135 bps.

Pricing was at the tight end of guidance set in the 140 bps area.

Citigroup Global Markets Inc. was the bookrunner.

Citigroup is based in New York.

Harris five-parter

Also on Wednesday, Harris sold $2.4 billion of senior notes (Baa3/BBB-/BBB-) in five tranches, according to a market source.

There was $500 million of 1.999% three-year notes priced at par with a spread of 110 bps over Treasuries.

A $400 million 2.7% five-year note priced at par, or Treasuries plus 130 bps.

The company also sold $600 million of 3.832% 10-year notes at par with a spread of Treasuries plus 185 bps.

A $400 million 4.854% 20-year note priced at par to yield 220 bps over Treasuries.

Finally, $500 million of 5.054% 30-year bonds sold at par, or Treasuries plus 240 bps.

Morgan Stanley & Co. LLC, Citigroup Global Markets, BofA Merrill Lynch, HSBC Securities (USA) Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to help fund the company’s acquisition of Exelis Inc.

The communications and information company is based in Melbourne, Fla.

Blackstone new issue

Blackstone Holdings Finance priced $350 million of 4.45% 30-year senior notes (/A+/A+/) on Wednesday at Treasuries plus 185 bps, according to an informed source.

Pricing was at 99.229 to yield 4.496%.

The notes sold at the tight end of guidance set in the 190 bps area over Treasuries. Initial price talk was set in the area of 200 bps over Treasuries.

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

BofA Merrill Lynch, Citigroup Global Markets and Morgan Stanley were the bookrunners.

The notes will be fully and unconditionally guaranteed by Blackstone Group LP and its indirect subsidiaries, Blackstone Holdings I LP, Blackstone Holdings II LP, Blackstone Holdings III LP and Blackstone Holdings IV LP.

The investment and advisory firm is based in New York City.

Fannie Mae sets talk

Fannie Mae announced plans to price an offering of Benchmark Notes due June 22, 2020, according to a market source and a company press release.

The issue is talked in the 18.5 bps area over Treasuries and is expected to price on Thursday.

The settlement date is April 27.

Barclays, Nomura and TD Securities USA are the joint lead managers. The co-managers include Citigroup Global Markets, FTN Financial Capital Markets, Great Pacific Securities, MFR Securities, Inc. and S.A. Ramirez & Co.

The government-backed mortgage lender is based in Washington, D.C.

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