Anadarko Petroleum, Royal Bank, Total System Services, Hyundai tap market; credit spreads ease

By Cristal Cody

Eureka Springs, Ark., March 14 – Investment-grade bond issuers priced more than $7 billion of notes on Monday, with a $3 billion deal from oil company Anadarko Petroleum Corp. attracting strong demand.

Anadarko Petroleum priced $3 billion of split-rated senior notes due 2021, 2026 and 2046 on Monday.

“The book was exceptionally strong,” a source said. “They did a day of investor marketing on Friday and the final order books were in excess of $19 billion. There’s clearly a bid for some of this paper where a month or so ago the primary market was essentially shut.”

The company’s bonds came in another 15 basis points to 20 bps in the secondary market going out the door.

Also in the primary market on Monday, Royal Bank of Canada sold $1.75 billion of 2.3% five-year covered bonds.

Total System Services, Inc. priced $1.5 billion of senior notes in two tranches during the session.

ICICI Bank Ltd. was in the market with $700 million of 10-year senior notes in a Rule 144A/Regulation S-eligible offering.

Also during the session, Hyundai Capital America priced $1 billion of medium-term notes in two tranches.

Market participants expect high-grade bond issuance of about $25 billion to $30 billion for the week.

In other secondary trading, Fifth Third Bank’s $1.5 billion two-part offering of notes priced on Thursday remained tight earlier Monday.

The Markit CDX North American Investment Grade index ended the day 2 bps softer at a spread of 85 bps.

Anadarko Petroleum prices

Anadarko Petroleum priced a $3 billion split-rated three-tranche offering of senior notes due 2021, 2026 and 2046 on Monday, according to an FWP filing with the Securities and Exchange Commission and market sources.

The company sold $800 million of 4.85% senior notes due March 15, 2021 at 99.974 to yield 4.856% and with a spread of 337.5 bps over Treasuries. The notes were talked to price at 350 bps over Treasuries, plus or minus 12.5 bps.

The notes tightened to 318 bps bid in the secondary market, a source said.

The $1.1 billion tranche of 5.55% senior notes due March 15, 2026 priced at 99.69 to yield 5.591%. The 10-year notes were sold with a spread of 362.5 bps over Treasuries, better than guidance of 375 bps over Treasuries, plus or minus 12.5 bps.

In the secondary market, the 10-year notes traded tighter at 346 bps bid.

Anadarko Petroleum also brought $1.1 billion of 6.6% senior notes due March 15, 2046 at 99.923 to yield 6.606% and a spread of 387.5 bps plus Treasuries. The bonds were guided at Treasuries plus 400 bps, plus or minus 12.5 bps.

The 30-year bonds tightened to 378 bps bid in aftermarket trading.

The bookrunners were Barclays, BofA Merrill Lynch, Mizuho Securities USA Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC.

Proceeds will be used to refinance the company’s 5.95% senior notes due in September 2016, refinance a portion of its 6.375% senior notes due in September 2017 and for general corporate purposes.

Anadarko Petroleum is a Woodlands, Texas-based independent oil exploration and production company.

Total System Services prices

Total System Services priced $1.5 billion of senior notes (Baa3/BBB-) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $750 million of 3.8% notes due April 1, 2021 at 99.776 to yield 3.849% and a spread of 237.5 bps over Treasuries.

In the second tranche, the company priced $750 million of 4.8% notes due April 1, 2026 at 99.73 to yield 4.834%. The notes printed with a spread of 287.5 bps over Treasuries.

A third tranche of notes was dropped from the final sale.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Mitsubishi UFJ Securities (USA), Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to fund a portion of the company’s $2.5 billion acquisition of payment technology solutions provider TransFirst LLC. If Total System Services does not close the acquisition on or before July 24 or the purchase agreement is terminated, the company will redeem all of the notes on a special mandatory redemption date.

Columbus, Ga.-based Total System Services is a global payments processing and solutions provider.

RBC taps U.S. market

Royal Bank of Canada priced $1.75 billion of 2.3% five-year covered bonds (Aaa/AAA/DBRS: AAA) on Monday at 99.93 to yield 2.315%, according to an FWP filing with the Securities and Exchange Commission.

The series CB31 notes due March 22, 2021 priced at mid-swaps plus 93 bps.

RBC Capital Markets, LLC, Goldman, Sachs & Co., HSBC Securities (USA) Inc. and TD Securities (USA) LLC were the bookrunners.

The bonds are unconditionally and irrevocably guaranteed by RBC Covered Bond Guarantor Ltd. Partnership.

Royal Bank of Canada is a Toronto-based financial services company.

Hyundai Capital sells $1B

Hyundai Capital America priced $1 billion of medium-term notes in two tranches on Monday in a Rule 144A/Regulation S offering, according to a market source.

The company sold $600 million of 2.5% notes due March 18, 2019 at a spread of Treasuries plus 137.5 bps, on the tight side of guidance of 140 bps, plus or minus 2.5 bps.

Hyundai Capital America also sold $400 million of 3% notes due March 18, 2021 at 155 bps over Treasuries. The notes were talked at 160 bps plus Treasuries, plus or minus 5 bps.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

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

Hyundai Capital America is an Irvine, Calif.-based auto financing arm of the Hyundai Motor Co.

ICICI Bank brings $700 million

ICICI Bank sold $700 million of 4% 10-year senior notes at 99.592 on Monday through its Dubai International Finance Centre branch in a Rule 144A/Regulation S-eligible offering, according to a company release and a market source.

The bonds due March 18, 2026 (Baa3/BBB-) priced with a spread of 210 bps over Treasuries. The notes were talked to price at Treasuries plus 210 bps to 215 bps.

BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., Credit Agricole Corporate & Investment Bank, HSBC Securities (USA) Inc. and Mitsubishi UFJ Securities (USA), Inc. were the bookrunners.

ICICI Bank is a Mumbai, India-based banking and financial services company.

Fifth Third firms

Fifth Third Bank’s 2.3% notes due 2019 were seen tighter at 91 bps offered in secondary trading early Monday, a market source said.

The bank sold $750 million of the notes (A3/A-A) on Thursday at a spread of Treasuries plus 120 bps.

Fifth Third Bank’s tranche of 3.85% subordinated notes due 2026 (Baa1/BBB+/A-) traded better at 181 bps offered at the start of the session.

The notes priced in a $750 million tranche on Thursday at 193 bps over Treasuries.

Fifth Third is a Cincinnati-based financial services company.

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