Texas Instruments, Pearson, Corporate Office price; new deals firm in trading, Apple active

By Aleesia Forni and Andrea Heisinger

New York, May 1 - A small number of sales were done in the investment-grade bond market Wednesday including one from Texas Instruments Inc.

The Dallas-based semiconductor maker priced $1 billion of bonds split evenly between tranches due 2018 and 2023.

Pearson Funding Five plc and Corporate Office Properties LP each priced paper under Rule 144A and Regulation S.

London-based Pearson sold $500 million of 10-year notes. Corporate Office Properties priced $350 million of notes due 2023. The size was increased from $250 million.

The sales come a day after Apple Inc. brought the largest corporate bond offering ever, totaling $17 billion in six tranches. The much-anticipated sale saw about $50 billion in demand from investors.

Wednesday marked the end of a two-day meeting of the Federal Reserve's Federal Open Market Committee. An announcement at its conclusion said that the Fed would continue the same stimulus measures that had been in place since December.

The pace was "a little bit slower you might say," a syndicate source who worked on one of the day's trades said.

"No deals from Apple out there today."

A market source agreed that the market was quiet.

"Only three today," they said. "We should see a couple of small [trades] tomorrow."

The Markit CDX North American Investment Grade index was 3 basis points wider at a spread of 78 bps on Wednesday.

The new issues from Texas Instruments and Corporate Office Properties were trading tighter near the end of the session, according to one trader.

Corporate Office's 10-year notes were quoted 3 bps better, while the two-tranche deal from Texas Instruments traded 1 bp to 2 bps better.

In other secondary action, the fixed-rate tranches of Tuesday's mega-deal from Apple Inc. were among the day's most actively traded issues.

The notes were unchanged to wider compared to levels seen early during Wednesday's session.

T.I.'s $1 billion

Texas Instruments was in the market with a $1 billion sale of senior notes (A1/A+/A+) in two tranches, a market source said.

The company priced $500 million of 1% five-year notes at 99.07 to yield 1.193% with a spread of Treasuries plus 55 bps. The notes have a make-whole call at Treasuries plus 10 bps.

A trader quoted the notes 2 bps better at 53 bps bid, 51 bps offered near the end of the session.

The second part of the deal was $500 million of 2.25% 10-year notes sold at 98.073 to yield 2.469% with a spread of 85 bps over Treasuries. The tranche has a make-whole call at Treasuries plus 15 bps to Feb. 1, 2023, and a par call after that date.

The notes traded 1 bp tighter at 84 bps bid, 81 bps offered on Wednesday.

Active bookrunners were J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC. Passives were Citigroup Global Markets Inc. and Mizuho Securities USA Inc.

Proceeds will be used to repay outstanding debt including $500 million of 0.875% notes and $1 billion of floating-rate notes, both due on May 15.

The Dallas-based semiconductor designer and manufacturer was last in the U.S. bond market with a $1.5 billion offering in two parts on July 30, 2012.

Pearson sells privately

Pearson Funding Five priced $500 million of 3.25% 10-year notes (Baa1/BBB+/) to yield 165 bps over Treasuries, an informed source said.

Bookrunners were Barclays, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc.

The notes were sold under Rule 144A and Regulation S.

The multinational publishing and education company is based in London.

Corporate Office upsizes

Corporate Office Properties priced an upsized $350 million of 3.6% 10-year senior notes (Baa3/BBB-/BBB-) to yield Treasuries plus 200 bps, according to a market source and a press release.

The notes were quoted 3 bps better at 197 bps bid, 194 bps offered.

The size was increased from $250 million, the source said.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC were bookrunners for the Rule 144A and Regulation S sale.

Proceeds will be used to repay borrowings under an unsecured revolving credit facility, and for general corporate purposes, including the potential repayment of unsecured term loans.

The real estate investment trust for suburban office properties is based in Columbia, Md.

Apple notes flat to weaker

In other secondary action, Apple's fixed-rate notes, which priced on Tuesday, were quoted mostly wider on Wednesday compared to levels seen earlier during the session, a market source said.

The $2 billion of three-year notes, which sold at a spread of Treasuries plus 20 bps, traded 2 bps wider at 17 bps bid, 13 bps offered.

The $4 billion tranche of five-year bonds traded unchanged at 36 bps bid, 33 bps offered.

Apple sold the notes at a spread of 40 bps over Treasuries.

The $5.5 billion of 10-year notes were quoted 3 bps wider at 74 bps bid, 70 bps offered following Wednesday's sale at Treasuries plus 75 bps.

The $3 billion of 30-year bonds was quoted 2 bps wider at 94 bps bid, 91 bps offered.

The notes sold at Treasuries plus 100 bps.

The sale also included a $1 billion tranche of three-year floating-rate notes priced at par to yield Libor plus 5 bps and $1.5 billion of five-year floaters sold at par to yield Libor plus 25 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

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