Florida Power, Hospitality Properties, Roper among day's sellers; secondary sees volatility

By Aleesia Forni and Andrea Heisinger

New York, May 30 - Roper Industries, Inc., National Rural Utilities Cooperative Finance Corp., Hospitality Properties Trust and Florida Power & Light Co. brought issues that were mostly smaller than benchmark size to Thursday's investment-grade primary market.

Roper had the day's largest sale at an upsized $800 million of five-year senior notes. The size was increased from $500 million on "sizable demand," a source said.

A $500 million trade of 10-year first mortgage bonds came from Florida Power, while Hospitality Properties Trust priced $300 million of 10-year senior notes.

The Hospitality trade saw about $625 million of investor interest, a source who worked on it said.

National Rural Utilities tapped the market for $400 million of seven-year collateral trust bonds. The size was increased from $300 million.

So far the week has seen $10.85 billion of high-grade corporate bonds. Unless more issuers tap the market Friday, the week's total will be less than the projected $15 billion to $20 billion.

The tone of the market soured slightly Wednesday as Treasury yields on some maturities surged. By Thursday, the mood had slightly improved, but not enough for issuers to plan on pricing bonds Friday, a source said.

"I'm hearing nothing," the source said of possible sales Friday.

In the preferred stock market, General Electric Capital Corp. gave terms of its $1 billion sale of $100,000-par fixed-to-floating-rate perpetual shares that priced on Wednesday.

In secondary action, the recent issue from Roper was quoted 2 basis points better late during a session that saw continued volatility, sources noted.

The Markit CDX Series 20 North American Investment Grade index was 1 bp tighter at a spread of 76 bps.

Hospitality prices tight

Hospitality Properties Trust sold $300 million of 4.5% 10-year senior notes (Baa2/BBB-/) at a spread of 240 bps over Treasuries, an informed source said.

Price guidance at midday was in the 250 bps over Treasuries area, with the notes selling 10 bps tighter than that level. The size was planned in the $250 million to $350 million range.

Bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used to repay amounts outstanding under a revolving credit facility, to redeem some or all outstanding 7% series C cumulative redeemable preferred shares and for general corporate purposes, possibly including funding hotel renovations or rebranding costs and potential future acquisitions.

Hospitality Properties last tapped the U.S. bond market in a $500 million sale of 5% 10-year notes priced at 355 bps over Treasuries on Aug. 9, 2012.

The real estate investment trust for hotels and travel centers is based in Newton, Mass.

Roper increases

Roper Industries priced an upsized $800 million of 2.05% five-year senior notes (Baa2/BBB/) at a spread of Treasuries plus 110 bps, a market source said.

The size was initially $500 million.

A trader quoted the notes at 108 bps bid near the day's close.

Active bookrunners were BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities. Passive was Barclays.

Proceeds are being used to repay amounts outstanding under a $1.5 billion senior unsecured five-year revolving credit facility, with any amounts repaid to be reborrowed.

Roper last sold bonds in the U.S. market in a $900 million sale in two tranches on Nov. 15, 2012. That offering included a 1.85% five-year note priced at 125 bps over Treasuries.

The diversified industrial technology company is based in Sarasota, Fla.

National Rural upsizes

National Rural Utilities Cooperative Finance was in the market with a $400 million sale of 2.35% seven-year collateral trust bonds (A2/A/) at Treasuries plus 87.5 bps, a market source said.

The size was increased from $300 million.

JPMorgan, Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities USA Inc., RBC Capital Markets LLC and RBS Securities Inc. were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of short-term debt, primarily consisting of commercial paper, and, along with cash on hand and other funding, to repay $600 million of 5.5% collateral trust bonds due on July 1.

The market lender for electric cooperatives is based in Herndon, Va.

Florida Power & Light prices

Florida Power & Light was in the day's session with a $500 million sale of 2.75% 10-year first mortgage bonds (Aa3/A/AA-) at a spread of Treasuries plus 68 bps, a market source said.

Bookrunners were Mizuho Securities USA, Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and Wells Fargo Securities.

Proceeds will be added to the company's general funds. FPL expects to use these funds to repay all or a portion of its total outstanding debt under a term loan agreement with an affiliate of one of the underwriters. The $425 million loan matures Sept. 30, 2013 and bears a floating interest rate over Libor. After repaying all or a portion of the debt, FPL expects to use its general funds to repay a portion of outstanding commercial paper obligations and for other general corporate purposes.

Florida Power last sold bonds in a $400 million offering of 30-year bonds on Dec. 17.

The utility subsidiary of NextEra Energy Inc. is based in Juno Beach, Fla.

General Electric details terms

General Electric Capital released new details on its $1 billion offering of 5.25% $100,000-par series C fixed-to-floating-rate noncumulative perpetual preferred stock on Thursday.

The deal priced Wednesday.

When declared, dividends will initially be paid at a fixed rate on a semiannual basis. Beginning June 15, 2023, the dividend will float at a rate of Libor plus a spread of 296.7 bps, the company said in an FWP filed with the Securities and Exchange Commission on Thursday.

Once floating, the dividends will be payable quarterly.

Barclays, BofA Merrill Lynch, Citigroup, Goldman Sachs & Co., JPMorgan and Morgan Stanley were the joint bookrunning managers.

The shares will not be listed on any exchange.

Proceeds will be used for general corporate purposes.

The funding arm of General Electric Co. is based in Norwalk, Conn.

Stephanie N. Rotondo contributed to this review.

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