Cisco brings $4 billion; KfW sells $1.25 billion of floating-rate notes; Vodafone notes widen

By Sheri Kasprzak and Cristal Cody

New York, March 9 - It was another busy day for the primary market. Several significant deals pricing during the session.

Heading up the action was Cisco Systems, Inc., which came to market with $4 billion of senior notes in three tranches.

The notes (A1/A+/A+) were sold through joint bookrunners Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., Morgan Stanley & Co. Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

The deal includes $1.25 billion of three-year floating-rate notes, $2 billion of three-year notes and $750 million of six-year notes.

The floating-rate notes bear interest at Libor plus 25 basis points and are due March 14, 2014.

The $2 billion of notes are also due March 14, 2014. They have a 1.625% coupon and priced at 99.881 to yield 1.666%. The spread on those notes came in at Treasuries plus 50 bps, and the notes feature a make-whole call at Treasuries plus 10 bps.

The $750 million tranche is due March 14, 2017. It has a 3.15% coupon and priced at 99.767 to yield 3.193%. The spread came in at Treasuries plus 105 bps, and the bonds feature a make-whole call at Treasuries plus 15 bps.

Proceeds will be used for general corporate purposes.

Cisco's fixed-rate notes due 2014 traded at 50 bps offered, while the notes due 2017 were seen at 104 bps bid, 100 bps offered, a trader said.

The three-year floating-rate notes traded at 23 bps bid, 20 bps offered.

Based in San Jose, Calif., Cisco produces internet protocol-based networking and other communications and information technology products.

Other issuers tapping the market were KfW, Health Care REIT, Inc. and Vodafone Group plc.

Secondary slow

Secondary traders said the day was really slow.

Overall investment-grade Trace volume dropped 12% to less than $13 billion, a source said.

The Markit CDX Series 14 North American investment-grade index eased 1 bp to a spread of 85 bps, according to Markit Group Ltd.

Vodafone's 10-year notes widened in the secondary market, while the new bonds from Health Care REIT and Cisco firmed slightly, sources said.

Treasuries continued to rally on turmoil in Libya, and the government received good demand for the second auction of the week. The 10-year Treasury benchmark note dropped to 3.47% from 3.55%. The 30-year bond yield fell 6 bps to 4.6%.

The Treasury Department sold $21 billion in a reopening of 10-year notes at a yield of 3.499%.

KfW notes price

German development bank KfW priced $1.25 billion of three-year floating-rate global notes, said a term sheet.

The notes (Aaa/AAA/AAA) were priced through HSBC and JPMorgan.

The notes, which are due March 17, 2014, bear interest at Libor.

Proceeds will be used for general corporate purposes.

KfW is based in Frankfurt.

Health Care REIT sells notes

Also on Wednesday, Health Care REIT sold $1.4 billion of notes in three tranches, said a statement from the company.

The joint bookrunners for the offering are Bank of America Merrill Lynch, JPMorgan, UBS Investment Bank, Barclays Capital Inc., Deutsche Bank Securities and Wells Fargo.

The offering included $400 million of 3.625% notes due March 15, 2016, which were priced to yield 3.705%; $600 million of 5.25% notes due Jan. 15, 2022, which were priced to yield 5.332%; and $400 million of 6.5% notes due March 15, 2041, which were priced to yield 6.571%.

Proceeds from the notes (Baa2/BBB-/BBB) will be used to acquire and invest in health care and senior housing properties.

Health Care REIT's bonds were active in secondary trading, sources said.

The five-years notes were seen tighter at 150 bps offered.

The 10-year tranche also had no bids. They were quoted at 180 bps offered.

The 30-year bond firmed to 194 bps bid, 190 bps offered.

Based in Toledo, Ohio, Health Care REIT is a senior care and health care real estate investment trust.

Vodafone rings up deal

Elsewhere, British telecommunications company Vodafone Group priced $1.1 billion of notes on Wednesday, according to a pricing sheet.

The offering includes $600 million of notes due in March 16, 2016 and $500 million of notes due March 16, 2021.

The 2016 notes have a 2.875% coupon and priced at 99.506. The 2021 notes have a 4.375% coupon and priced at 99.288.

Barclays Capital, BNP Paribas Securities Corp., Mizuho Securities USA Inc. and Morgan Stanley were the underwriters for the sale.

In the secondary market, Vodafone's notes due 2016 traded at 86 bps bid, 83 bps offered and later at 85 bps bid, 82 bps offered, traders said.

The notes due 2021 were quoted wider at 105 bps bid, 103 bps offered soon after pricing and wider into the close at 106 bps bid, 103 bps offered.

Proceeds will be used for general corporate purposes.

Vodafone is based in London.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.