Mylan, Agilent, Boston Properties among deals ahead of Fed; Agilent notes trade weaker

By Aleesia Forni and Andrea Heisinger

New York, June 18 - Several issuers tapped Tuesday's high-grade primary market with mostly smaller sales, in sharp contrast to the previous day's trades.

Companies in the day's session included Agilent Technologies, Inc., Mylan Inc., Boston Properties LP, Georgia-Pacific LLC and Entergy New Orleans Inc.

There was also a $350 million sale of three-year floating-rate notes from Norway's Kommunalbanken AS.

Agilent priced $600 million of 10-year senior notes.

Real estate investment trust Boston Properties sold $700 million of 10-year senior notes, while Georgia-Pacific eyed the market to sell 10-year notes.

Pharmaceutical company Mylan priced $1.15 billion of bonds in two parts. The sale included $500 million of three-year notes and $600 million of five-year notes.

Entergy New Orleans brought a $100 million sale of 10-year mortgage bonds.

The day's haul could not compare with Monday's $6 billion offering in four tranches from Chevron Corp. That sale marked a return of the large opportunistic trades that were common in the high-grade market in recent months.

"I think they just snuck in before the Fed while they could," a source said Tuesday. "Same with today's deals."

The source was referring to the two-day Federal Reserve Federal Open Market Committee meeting that began Tuesday and ends Wednesday. All ears will be tuned to comments from Fed chairman Ben Bernanke to be made after the meeting's conclusion and an announcement of any changes to key interest rates or quantitative easing measures.

A market source said that some smaller issuers "similar to today" might try to price bonds Wednesday.

The Markit CDX North American Investment Grade index was unchanged at a spread of 82 basis points on Tuesday.

In secondary market action, the new issue from Agilent traded 3 bps wider near the end of the session.

"Haven't seen anything on [Mylan's new issue] yet," the trader added.

Investment-grade bank and brokerage credit default swap costs rose on Tuesday, according to a market source.

Bank of America Corp.'s CDS costs were 1 bp tighter at 109 bps bid, 113 bps offered. Citigroup Inc.'s CDS costs were 1 bp wider at 101 bps bid, 105 bps offered. JPMorgan Chase & Co.'s CDS costs rose 1 bp to 81 bps bid, 84 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 64 bid, 68 bps offered.

Merrill Lynch's CDS costs rose 4 bps to 99 bps bid, 107 bps offered. Morgan Stanley's CDS costs widened 2 bps to 142 bps bid, 147 bps offered. Goldman Sachs Group, Inc.'s CDS costs were 3 bps wider at 132 bps bid, 136 bps offered.

Agilent prices tight

Agilent Technologies was in the market with a $600 million sale of 3.875% 10-year senior notes (Baa2/BBB+/BBB+) sold at a spread of Treasuries plus 175 bps, an informed source said.

Talk at midday was in the Treasuries plus 187.5 bps to 200 bps range, the source said. There is a do-not-grow provision on the size of the sale.

A trader quoted the notes at 179 bps bid, 175 bps offered.

Bookrunners were BofA Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.

Proceeds are being used to repay outstanding senior notes due July 15 and for general corporate purposes, including payment of costs associated with a previously announced targeted restructuring program and the repurchase of shares of common stock.

Agilent was last in the U.S. bond market with a $400 million trade of 3.2% 10-year notes priced at 155 bps over Treasuries on Sept. 10, 2012.

The bioanalytic and electronic measurement technology company is based in Santa Clara, Calif.

Boston Properties upsizes

Boston Properties sold an upsized $700 million of 3.8% senior notes due 2024 (Baa2/A-/BBB) at a spread of Treasuries plus 165 bps, a market source said.

Active bookrunners were BofA Merrill Lynch, Deutsche Bank Securities, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC. Passives were BNY Mellon Capital Markets LLC and Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes, including investment opportunities and debt reduction.

The Boston-based real estate investment trust for office properties was last in the bond market with a $500 million sale of 3.125% long 10-year notes priced at 133 bps over Treasuries on April 2.

Mylan sells $1.15 billion

Mylan priced $1.15 billion of notes (Baa3/BBB-/) in two maturities, according to a press release.

A $500 million tranche of 1.8% three-year notes sold at 99.925.

The second part was $650 million of 2.6% five-year bonds priced at 99.791.

Pricing was done under Rule 144A and Regulation S.

Full terms of the trade were not available at press time.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley were bookrunners.

Proceeds are being used to repay an existing term loan.

Mylan was last in the U.S. bond market with a $750 million sale of 10-year notes on Dec. 12, 2012.

The generic and specialty pharmaceutical company is based in Canonsburg, Pa.

Entergy's quick sale

Entergy New Orleans brought a $100 million sale of 3.9% 10-year first mortgage bonds (Baa3/A-/) at a spread of Treasuries plus 175 bps, a market source said.

BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities were bookrunners.

Proceeds are being used to repay $70 million of 5.25% mortgage bonds due in August and for general corporate purposes.

The electric and gas utility and unit of Entergy Corp. is based in New Orleans.

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