Anthem brings $5.5 billion in five parts; Schlumberger, Southwest, Leggett & Platt price

By Cristal Cody

Tupelo, Miss., Nov. 14 – Anthem, Inc. led pricing action in the high-grade bond market on Tuesday with a $5.5 billion five-tranche offering of senior notes.

Also in the primary market, Schlumberger Finance Canada Ltd. priced $1.1 billion of dollar-denominated guaranteed senior notes in two parts.

Southwest Airlines Co. came with a $600 million two-tranche offering of notes.

Leggett & Platt, Inc. sold $500 million of 10-year senior notes.

Also, Entergy Texas Inc. priced $150 million of 10-year first mortgage bonds.

In other activity, Citadel LP held a two-day round of fixed-income investor calls that was set to end on Tuesday, a source said. J.P. Morgan Securities LLC and UBS Securities LLC are the arrangers.

S&P Global Ratings announced on Friday that it assigned a BBB issuer credit rating for Citadel, a Chicago-based hedge fund management firm.

The Markit CDX North American Investment Grade 29 index softened about 1 basis point on Tuesday to close at a spread of 57 bps.

Anthem prices $5.5 billion

In the Anthem offering, the company priced $5.5 billion of fixed-rate senior notes (Baa2/A/BBB) in five tranches on Tuesday, according to a market source.

The company sold $900 million of 2.55% three-year notes at a spread of Treasuries plus 75 bps.

Anthem priced $750 million of 2.95% five-year notes with a 90 bps over Treasuries spread.

The $850 million tranche of 3.355% seven-year notes were placed at a spread of 110 bps over Treasuries.

In the 10-year tranche, Anthem priced $1.6 billion of 3.65% notes with a spread of Treasuries plus 130 bps.

The final $1.4 billion tranche of 4.375% notes were sold with a spread of 155 bps over Treasuries.

The tranches all priced on the tight side of guidance.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Securities were the bookrunners.

Proceeds will be used to fund the planned acquisition of HealthSun Health Plans, Inc. and the acquisitions of Freedom Health, Inc., Optimum HealthCare, Inc. and America’s 1st Choice of South Carolina, Inc. Proceeds will also be used to fund the tender offers for any and all of the company’s 7% notes due 2019 and up to $600 million of its 5.95% notes due 2034, 5.85% notes due 2036, 6.375% notes due 2037, 5.8% notes due 2040 and 5.1% notes due 2044; to redeem any 7% notes due 2019 still remaining after the tender; for working capital; and for general corporate purposes.

Indianapolis-based Anthem is a health benefits company.

Schlumberger $1.1 billion deal

Schlumberger Finance Canada priced $1.1 billion of dollar-denominated guaranteed senior notes (A1/AA-/) in two tranches on Tuesday, according to a market source.

The company sold $500 million of 2.2% three-year notes at a spread of 43 bps over Treasuries, on the tight side of talk in the Treasuries plus 45 bps area.

Schlumberger priced $600 million of 2.65% five-year notes at a Treasuries plus 60 bps spread. Guidance on the notes was in the Treasuries plus 62 bps area.

BofA Merrill Lynch, HSBC Securities (USA) Inc. and J.P. Morgan Securities were the bookrunners.

The notes will be guaranteed by parent company Schlumberger Ltd.

Schlumberger is an oilfield services company with principal offices in Houston, Paris, London and The Hague.

Southwest Airlines sells notes

Southwest Airlines priced $600 million of notes (A3/BBB+/BBB+) in two tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $300 million of 2.75% five-year notes at 99.93 to yield 2.765%. The notes were sold with a spread of Treasuries plus 70 bps, tighter than initial price talk in the Treasuries plus 80 bps area.

Southwest Airlines priced $300 million of 3.45% 10-year notes at 99.732 to yield 3.482%, or in line with talk at a 110 bps spread over Treasuries.

Citigroup Global Markets Inc., Goldman Sachs & Co., Morgan Stanley & Co. LLC and Barclays were the bookrunners.

Proceeds will be used for general corporate purposes.

Dallas-based Southwest Airlines is a passenger airline company.

Leggett & Platt notes

Leggett & Platt priced $500 million of 3.5% 10-year senior notes at a spread of Treasuries plus 120 bps on Tuesday, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/) priced at 99.341 to yield 3.579%.

J.P. Morgan Securities, MUFG, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, including debt repayment or refinancing, which may include $150 million of 4.4% notes due July 1, 2018 at maturity.

Leggett & Platt is a Carthage, Mo.-based producer of residential furnishings, commercial components and industrial materials.

Entergy sells mortgage bonds

Entergy Texas priced $150 million of 3.45% 10-year first mortgage bonds (Baa1/A/) on Tuesday at a spread of 110 bps over Treasuries, according to an FWP filing with the SEC.

The bonds priced at 99.738 to yield 3.481%.

Barclays and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used for general corporate purposes.

Entergy Texas is a Beaumont, Texas-based energy provider.

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