SES Global Americas, Rentenbank tap market as supply drops; GE, American Campus notes firm

By Aleesia Forni and Andrea Heisinger

New York, March 26 - Issuance dropped in the investment-grade bond market on Tuesday after an ambitious start to the week.

Monday saw $3.8 billion of bonds pricing, not including sales from emerging markets or preferred stock. Tuesday's market had trades from SES Global Americas Holdings GP and Germany's Landwirtschaftliche Rentenbank.

Canada's Telus Corp. sold C$1.7 of bonds in two tranches.

They were joined by SES Global Americas, which priced $1 billion of bonds due 2023 and 2043. The sale from the U.S.-based unit of Luxembourg's SES SA was done under Rule 144A and Regulation S.

Two new preferred stock offerings came to the market from Main Street Capital Corp. and Kayne Anderson MLP.

DDR Corp.'s new $150 million issue of 6.25% class K cumulative redeemable preferreds, which priced on Monday, freed in early Tuesday trading. A trader saw the issue at $24.70 bid, no offers.

Issuance is expected to stay stagnant for the remainder of the short week leading up to Friday's bond market closure before Easter.

"We haven't really even had any calls," a source said, referring to talks with prospective issuers. "It's really dead out there."

More companies based in other countries could price bonds on Wednesday, but anything more than one or two sales is "not likely at all," said one market source.

The Markit CDX Series 20 North American Investment Grade index tightened 1 basis point to a spread of 90 bps on Tuesday.

The secondary market saw General Electric Capital Corp.'s and American Campus Communities Operating Partnership LP's recent deals tighten in trading one trader said.

SES sells $1 billion

SES Global Americas Holdings tapped the market for $1 billion of notes (Baa2/BBB/BBB) in two maturities, an informed source said.

The sale included a $750 million tranche of 3.6% 10-year notes sold at a spread of Treasuries plus 175 bps.

A $250 million tranche of 5.3% 30-year bonds priced at Treasuries plus 220 bps.

Pricing was done under Rule 144A and Regulation S.

Active bookrunners were BofA Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities LLC. Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBS Securities Inc. and SG Americas Securities LLC were passives.

The Wilmington, Del.-based subsidiary of Luxembourg's SES SA provides satellite services.

Rentenbank's five-years

Landwirtschaftliche Rentenbank sold $1.75 billion of 1% five-year notes (Aaa/AAA/AAA) at 99.549, according to an FWP with the Securities and Exchange Commission.

The sale was announced on March 22.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and TD Securities (USA) LLC ran the books.

The sale is guaranteed by the Federal Republic of Germany.

Proceeds are being used to finance lending activities.

Telus' C$1.7 billion bonds

Telus sold an upsized C$1.7 billion of senior notes (Baa1/BBB+/DBRS: A) in two tranches in a deal that was opened to Canadian and U.S. buyers, a syndicate source said.

The company sold C$1.1 billion of 3.35% series CK notes due April 1, 2024 at a spread of 142 bps over the Canadian bond curve. The tranche was upsized from C$750 million.

Telus also sold C$600 million of 4.4% series CL notes due April 1, 2043 at 187 bps plus the bond curve in an offering upsized from C$500 million.

CIBC World Markets Inc., RBC Capital Markets and Scotia Capital Inc. were the lead managers.

The Vancouver, B.C. based telecommunications company plans to use the proceeds to repay the company's C$300 million of 5% series CB notes due June 3, 2013 at maturity, to fund the proposed early redemption of the outstanding C$700 million of 4.95% series CF notes due May 15, 2014, to repay outstanding commercial paper and for general corporate purposes.

Kayne plans preferreds

Kayne Anderson is planning an offering of at least $100 million series F mandatory redeemable preferred shares, the company said in a prospectus filed with the SEC.

Price talk is 3.5% to 3.625%, according to a trader.

While the trader said the company was "AA rated" and a "strong company," he added, "nobody is going to care with a yield that low."

BofA Merrill Lynch, Citigroup Global Markets Inc. and UBS Securities LLC are the joint bookrunners.

Kayne Anderson has applied to list the new series of preferreds on the New York Stock Exchange under the ticker symbol "KYNPF."

Proceeds will be used for investments, to repay indebtedness, to redeem the series D mandatory redeemable preferreds and for general corporate purposes.

Kayne Anderson is a Houston-based non-diversified, closed-end management investment company.

Main Street's $25-pars

Main Street Capital will price a sale of $25-par senior notes due April 1, 2023, according to a prospectus.

Price talk is around 6.25%, a trader said.

Keefe, Bruyette & Woods, Raymond James & Associates Inc. and RBC Capital Markets LLC are the joint bookrunning managers.

The company intends to list the notes on the New York Stock Exchange under the ticker symbol "MSCA."

Proceeds will be used to pay down a credit facility.

Main Street is a Houston-based internally managed, closed-end, non-diversified management investment company

GE Capital notes firm

In secondary market action, General Electric Capital's recent notes were trading better on Tuesday, according to a trader.

The notes were quoted 18 basis points better at 72 bps bid, 69 bps offered following Monday's pricing with a spread of 90 bps over Treasuries.

The $1 billion tranche of 1.625% five-year notes sold at 99.719 to yield 1.686%.

The sale also included $400 million of five-year floating-rate notes priced at par to yield Libor plus 71 basis points.

The funding arm of General Electric Co. is based in Norwalk, Conn.

American Campus tightens

In other trading, American Campus Communities' $400 million 3.75% 10-year notes were quoted 10 bps better at 177 bps bid, 173 bps offered during the session.

The notes sold at a spread of Treasuries plus 187.5 bps on Monday.

The real estate investment trust for student housing is based in Austin, Texas.

Stephanie N. Rotondo contributed to this review

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