HSBC, Sanofi, Alexandria Real Estate, Kommuninvest price; AT&T firms on deal approval

By Cristal Cody

Tupelo, Miss., June 12 – Investment-grade supply on Tuesday included $3 billion of 11-year fixed-to-floating-rate senior notes from HSBC Holdings plc.

Sanofi SA also sold $2 billion of notes in two tranches.

Alexandria Real Estate Equities, Inc. priced a $900 million two-part offering of senior notes.

Also, Kommuninvest I Sverige AB placed $2.5 billion of long two-year notes on Tuesday.

In other market action, AT&T Inc. on Tuesday received the court go-ahead to complete its $85.4 billion cash and stock acquisition of Time Warner Inc. The Justice Department had filed suit to block the deal.

AT&T said in a statement it plans to close the merger by June 20.

AT&T’s bonds (Baa1/BBB+/A-) traded about 1 basis point to 3 bps tighter going out, a source said.

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) were mostly unchanged at the 143 bps area, the source said.

Time Warner sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

Coming up on Wednesday, market sources are paying close attention to the release of the Federal Reserve’s monetary policy announcement. A rate hike of 25 bps is widely expected.

Also on Wednesday, Bayer AG will start a round of fixed-income investor calls for a possible dollar-denominated Rule 144A and Regulation S deal.

Syndicate sources forecast about $15 billion to $20 billion of supply over the week.

On Monday, more than $6 billion of investment-grade bonds were priced.

The Markit CDX North American Investment Grade 30 index firmed about 1 bp to close at a spread of 64 bps.

HSBC prices $3 billion

HSBC Holdings sold $3 billion of 4.583% fixed-to-floating-rate senior notes due June 19, 2029 on Tuesday at par to yield a spread of Treasuries plus 163 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes (A2/A/AA-) were initially talked to price in the Treasuries plus 175 bps to 180 bps area and later guided to print in the Treasuries plus 165 bps spread area, plus or minus 2 bps.

The coupon will reset to a floating rate of Libor plus 153.455 bps after the initial fixed-rate period ends June 19, 2028.

HSBC Securities (USA) Inc. was the bookrunner.

The banking and financial services group is based in London.

Sanofi raises $2 billion

Sanofi priced a $2 billion two-part offering of notes (A1/AA/AA-), according to a market source.

The company sold $1 billion of 3.375% five-year notes with a spread of Treasuries plus 60 bps. Price guidance on the notes was in the Treasuries plus 60 bps area, plus or minus 5 bps. The notes were initially talked to price in the Treasuries plus 65 bps to 70 bps area.

The $1 billion tranche of 3.625% 10-year notes came at a spread of 75 bps over Treasuries. The notes were guided to price in the Treasuries plus 80 bps area, plus or minus 5 bps. Initial price talk on the notes was in the Treasuries plus 90 bps to 95 bps area.

Barclays, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and MUFG were the bookrunners.

Sanofi is a Paris-based pharmaceutical company.

Alexandria Real Estate prices

Alexandria Real Estate Equities (Baa2/BBB/) placed $900 million of senior guaranteed notes in two tranches on Tuesday, according to an FWP filing with the SEC.

The company priced $450 million of 4% notes due Jan. 15, 2024 at 99.933 to yield 4.013%, or a Treasuries plus 120 bps spread.

Alexandria Real Estate sold $450 million of 4.7% notes due July 1, 2030 at 99.916 to yield 4.709%. The notes priced with a spread of 175 bps over Treasuries.

J.P. Morgan Securities LLC, Citigroup Global Markets, Goldman Sachs & Co. LLC and BofA Merrill Lynch were the bookrunners.

Pasadena, Calif.-based Alexandria Real Estate Equities is a real estate investment trust focused on life science and technology campuses.

Kommuninvest prices notes

Kommuninvest (Aaa/AAA/) priced $2.5 billion of 2.75% notes due Oct. 22, 2020 on Tuesday at mid-swaps plus 2 bps, or a spread of Treasuries plus 31.7 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 2 bps area.

BofA Merrill Lynch, Citigroup Global Markets, SEB Securities, Inc. and TD Securities (USA) LLC were the bookrunners for the Rule 144A, Regulation S deal.

Kommuninvest is an Orebro-based company that offers funding to municipalities of Sweden.

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