By Andrea Heisinger
New York, Jan. 19 - Real estate investment trust HCP, Inc. priced $2.4 billion of senior notes (Baa2/BBB/BBB) in an upsized four parts late on Wednesday, a source close to the offering said.
A tranche of 30-year bonds was added late in the day just prior to the launch, a source said.
The $400 million of 2.7% three-year notes priced at 99.902 to yield 2.734% with a spread of Treasuries plus 175 basis points. Price talk was at 15 bps versus the five-year spread, the source said, and the notes priced in line with that talk.
The three-year notes have a make-whole call of Treasuries plus 25 bps.
A $500 million tranche of 3.75% five-year notes sold at 99.601 to yield 3.838% with a spread of 190 bps over Treasuries. The tranche priced in line with talk of 10 bps versus the 10-year tranche's spread.
The five-year notes are callable at a make-whole of 20 bps over Treasuries.
The $1.2 billion tranche of 5.375% 10-year notes priced at 99.479 to yield 5.443% with a spread of Treasuries plus 210 bps. The notes sold well below guidance in the 225 bps area.
The notes are callable at a make-whole of 35 bps over Treasuries.
The final part was $300 million of 6.75% 30-year bonds priced at 98.945 to yield 6.833% with a spread of Treasuries plus 230 bps. The tranche was a late addition to the sale on investor demand, and there was no price talk for the tranche.
The bonds have a make-whole call of 40 bps over Treasuries.
Bank of America Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC were the active bookrunners. Passive bookrunners were Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.
Proceeds will be used to finance a portion of the cash consideration for the acquisition of HCR ManorCare Facilities. If the acquisition is not completed on or prior to the acquisition termination date, the company will be required to redeem all notes on a special date at a special price.
The REIT for the health care industry is based in Long Beach, Calif.
| Issuer: | HCP, Inc.
|
| Issue: | Senior notes
|
| Amount: | $2.4 billion
|
| Bookrunners: | Bank of America Merrill Lynch, UBS Securities LLC, Wells Fargo Securities LLC (active), Citigroup Global Markets Inc., J.P. Morgan Securities LLC (passive)
|
| Trade date: | Jan. 19
|
| Settlement date: | Jan. 24
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| Three-year notes
|
| Amount: | $400 million
|
| Maturity: | Feb. 1, 2014
|
| Coupon: | 2.7%
|
| Price: | 99.902
|
| Yield: | 2.734%
|
| Spread: | Treasuries plus 175 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | 15 bps versus five-year tranche's spread
|
|
|
| Five-year notes
|
| Amount: | $500 million
|
| Maturity: | Feb. 1, 2016
|
| Coupon: | 3.75%
|
| Price: | 99.601
|
| Yield: | 3.838%
|
| Spread: | Treasuries plus 190 bps
|
| Call: | Make-whole at Treasuries plus 30 bps
|
| Price talk: | 20 bps versus 10-year tranche's spread
|
|
|
| 10-year notes
|
| Amount: | $1.2 billion
|
| Maturity: | Feb. 1, 2021
|
| Coupon: | 5.375%
|
| Price: | 99.479
|
| Yield: | 5.443%
|
| Spread: | Treasuries plus 210 bps
|
| Call: | Make-whole at Treasuries plus 35 bps
|
| Price talk: | 225 bps area
|
|
|
| 30-year bonds
|
| Amount: | $300 million
|
| Maturity: | Feb. 1, 2041
|
| Coupon: | 6.75%
|
| Price: | 98.945
|
| Yield: | 6.833%
|
| Spread: | Treasuries plus 230 bps
|
| Call: | Make-whole at Treasuries plus 40 bps
|
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