Shell, Philip Morris go coupon hunting; AmEx, Cenovus, Blackstone price; Baltimore G&E firms

By Aleesia Forni and Andrea Heisinger

New York, Aug. 14 - Several multi-tranche deals from high-profile companies were priced in the investment-grade bond market on Tuesday, including Shell International Finance BV, Philip Morris International Inc. and Liberty Mutual Group Inc.

American Express Credit Corp., Cenovus Energy Inc., Blackstone Holdings Finance Co. LLC and Baltimore Gas & Electric Co. also sold bonds.

Shell International sold $2.5 billion of paper in three maturities in its first offering since March of 2010, when the company sold $4.25 billion of bonds.

Philip Morris priced $2.25 billion of notes due 2017, 2022 and 2042.

Canada's Cenovus Energy sold $1.25 billion of 10-year notes and 30-year bonds.

There was a private sale of $650 million in two tranches from Blackstone Holdings. The notes are guaranteed by Blackstone Group LP and some subsidiaries.

Liberty Mutual reopened two notes originally priced in May in a $500 million deal.

American Express Credit reopened its issue of 1.75% notes due June 2015 to add $750 million. This brings the outstanding total to $2 billion.

Baltimore Gas & Electric was in the market with a $250 million deal of 10-year notes, which firmed in trading.

State Street Corp. was in the preferred stock market with an upsized $500 million deal of perpetual shares. The size was initially talked at $250 million, a source said.

Reinsurance Group of America Inc. announced and priced $400 million of 30-year fixed-to-floating-rate notes.

Meanwhile, Capital One Financial Corp. gave terms for its $875 million deal of 6% preferreds priced on Monday.

A syndicate source trumpeted that companies such as Shell and Philip Morris were coming into the market for general corporate purposes "to try to get low rates."

"They're just looking at the borrowing costs like everyone else," the source added.

While the floodgates on new issues have been wide open Monday and Tuesday, the flow could slow on Wednesday, sources said.

"I know we have one trade, but otherwise it should be quieter," a market source said.

The syndicate source noted: "We need to see how things perform" in trading.

The Markit CDX Series 18 North American Investment Grade index was unchanged at a spread of 103 bps on Monday.

Aside from some activity in the day's new deals, one source saw a muted secondary market on Tuesday.

"I guess people are getting stuff done on the new issues, but from where I sit, it was one of the deadest [days]," one trader said.

Shell prices $2.5 billion

Shell International Finance priced $2.5 billion of notes (Aa1/AA/AA+) in three maturities, a market source said.

A $1 billion tranche of 1.125% five-year notes priced at a spread of Treasuries plus 50 bps.

The $1 billion of 2.375% 10-year notes sold at a spread of 70 bps over Treasuries.

A third part was $500 million of 3.625% 30-year bonds priced at 82 bps over Treasuries.

All of the maturities were priced in line with guidance.

Goldman Sachs & Co. and Morgan Stanley & Co. LLC ran the books.

Proceeds are being used for general corporate purposes.

The deal is guaranteed by parent oil and gas company Royal Dutch Shell plc, based in The Hague, the Netherlands.

Shell International was last in the U.S. bond market with a $4.25 billion deal in three parts on March 18, 2010. A 1.875% three-year note from that offering sold at 42 bps over Treasuries, while a 4.375% 10-year note priced at 77 bps over Treasuries and a 5.5% 30-year bond priced at Treasuries plus 95 bps.

Philip Morris tranches

Philip Morris International priced $2.25 billion of senior notes (A2/A/A) in three tranches, an informed source said.

A $750 million tranche of 1.125% five-year notes priced at a spread of Treasuries plus 60 bps. The tranche priced in line with guidance in the 60 bps area.

The $750 million of 2.5% 10-year notes sold at 90 bps over Treasuries. The notes were priced tighter than guidance in the 95 bps area.

The third part was $750 million of 3.875% 30-year bonds priced at a spread of Treasuries plus 120 bps. The bonds priced in line with talk in the 120 bps area.

Bookrunners were Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc.

Proceeds are being added to the company's general funds.

The producer of cigarette and tobacco products is based in New York City.

Cenovus' $1.25 billion

Canada's Cenovus Energy priced $1.25 billion of notes (Baa2/BBB+/) in tranches due 2022 and 2042, an informed source said.

The deal had been talked between $1 billion and $1.25 billion, with demand spurring the larger size, a source said.

The $500 million of 3% 10-year notes sold at a spread of Treasuries plus 137.5 bps.

A $750 million tranche of 4.45% 30-year bonds priced at 165 bps over Treasuries.

The tranches were free to trade "at about 4:45 p.m.," a trader said, who quoted the 10-year tranche at 129 bps offered and the 30-year tranche at 163 bps offered prior to that.

Barclays Capital Inc., Deutsche Bank Securities Inc. and RBS Securities Inc. were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of commercial paper.

The oil company is based in Calgary, Alta.

Liberty Mutual reopens notes

Liberty Mutual Group priced $500 million in a double reopening of notes (Baa2/BBB-/) via Rule 144A and Regulation S, an informed source said.

A 4.95% note due in May of 2022 was reopened to add $250 million, pricing at a spread of Treasuries plus 290 bps.

Total issuance for the note is $750 million, including $500 million priced at 305 bps over Treasuries on May 1.

There was also a reopening of 6.5% bonds due in May of 2042 to add $250 million. These bonds were priced at a spread of Treasuries plus 325 bps.

Total issuance is $750 million, including $500 million priced at 337.5 bps over Treasuries on May 1.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were bookrunners.

Liberty Mutual is a Boston-based property and casualty insurance company.

Baltimore G&E's 10-years

Baltimore Gas & Electric sold $250 million of 2.8% 10-year notes (Baa1/BBB+/BBB+) to yield Treasuries plus 112 bps, a source away from the trade said.

The notes closed the session at 110 bps bid, 107 bps offered.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC were bookrunners.

Proceeds are being used to repay total outstanding commercial paper obligations and for general corporate purposes.

The Baltimore-based electric and natural gas utility was last in the market with a $300 million sale of 3.5% 10-year notes priced at 150 bps over Treasuries on Nov. 10, 2011.

AmEx reopens three-years

American Express Credit reopened its issue of 1.75% medium-term senior notes due in June 2015 to add $750 million, according to a market source and FWP with the Securities and Exchange Commission.

The notes were seen at 55 bps offered near the end of the day.

There was about $1.5 billion on the books for the trade, a source said.

The size of the reopening was increased from $500 million.

The notes (A2/A-/A+) were sold at a spread of Treasuries plus 60 bps.

Total issuance is $2 billion, including $1.25 billion priced on June 7 at 140 bps over Treasuries.

Bookrunners were Barclays Capital Inc., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.

The financial services company is based in New York City.

Blackstone's $650 million

Blackstone Holdings Finance was in the market with a $650 million deal of notes (/A/A+) that was reallocated in two tranches, a source close to the trade said.

A $400 million tranche of 4.75% notes due 2023 priced at a spread of Treasuries plus 325 bps.

The added second part was $250 million of 6.25% 30-year bonds sold at Treasuries plus 375 bps.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were bookrunners.

The deal was done under Rule 144A and Regulation S. The notes are guaranteed by Blackstone Group LP, Blackstone Holdings I LP, Blackstone Holdings II LP, Blackstone Holdings III LP and Blackstone Holdings IV LP.

Proceeds are being used for general corporate purposes.

The investment and advisory firm is based in New York City.

State Street's perpetuals

State Street priced $500 million of 5.25% series C noncumulative perpetual preferred stock, a market source said.

The preferreds will be issued as depositary shares representing a 1/4,000th of an interest in each share.

State Street will apply to list the new preferreds on the New York Stock Exchange under the ticker symbol "STTPC."

Morgan Stanley & Co. Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used to redeem all outstanding series A preferred stock linked to State Street Capital Trust III. The trust will then redeem all outstanding 8.250% fixed-to-floating rate normal automatic preferred enhanced capital securities and all of the outstanding common securities issued by Capital Trust III.

The redemptions require approval from the Federal Reserve. If approval is not secured, the company will use proceeds for general corporate purposes.

State Street is a Boston-based financial holding company.

Reinsurance sells hybrids

Reinsurance Group priced a $400 million offering of 6.2% 30-year fixed-to-floating rate subordinated debentures, a trader told Prospect News.

The interest rate will be fixed through Sept. 15, 2022. After that date, the interest rate will convert to floating based on Libor plus 447 bps. The rate will be reset quarterly.

The company will apply to list the notes on the New York Stock Exchange.

Barclays Capital Inc., UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used for general corporate purposes.

Reinsurance Group is a Chesterfield, Mo.-based reinsurance company.

Capital One gives terms

Capital One Financial priced an $875 million sale of 6% series B fixed rate noncumulative perpetual preferred stock, according to an FWP filed with the SEC.

The deal came in line with talk. There is a $125 million overallotment option.

The preferreds (Ba1/BB+/BB) will be issued as depositary shares representing a 1/40th of an interest in each preferred security.

Capital One will apply to list the new series of preferreds on the New York Stock Exchange under the ticker symbol "COFPP."

Bank of America Merrill Lynch, JPMorgan Securities LLC, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used for general corporate purposes, including a possible redemption of certain trust preferreds.

Capital One is a McLean, Va.-based financial institution.

Stephanie N. Rotondo contributed to this review

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