Shire prices $12.1 billion; Hess, American Airlines, S&P tap market; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., Sept. 19 – Shire Acquisitions Investments Ireland DAC tapped the high-grade market on Monday with a $12.1 billion four-part offering of senior notes, ending speculation about when the deal would price.

Shire dropped a planned tranche of floating-rate notes in the deal.

Also on Monday, Hess Corp. priced $1.5 billion of senior notes in two parts.

American Airlines, Inc. sold $813.8 million of class AA and class A pass-through enhanced equipment trust certificates.

S&P Global Inc. placed $500 million of long 10-year senior notes.

About $30 billion of high-grade volume is expected over the week as traders and investors focus on mid-week monetary policy meetings from the Federal Reserve and Bank of Japan.

The Markit CDX North American Investment Grade index closed 1 basis point tighter at a spread of 75 bps.

In the secondary market, Gilead Sciences Inc.’s 2.95% senior notes due 2027 traded about 1 bp better earlier in the day.

Ingredion Inc.’s 3.2% senior notes due 2026 traded 10 bps better than where the bonds priced on Thursday.

Shire prices $12.1 billion

Shire Acquisitions Investments Ireland sold $12.1 billion of senior notes in four tranches on Monday, according to a market source.

The company priced $3.3 billion of 1.9% three-year notes with a spread of 100 bps over Treasuries.

The $3.3 billion tranche of 2.4% five-year notes priced at Treasuries plus 120 bps.

Shire sold $2.5 billion of 2.875% seven-year notes at 135 bps over Treasuries.

The company also priced $3 billion of 3.2% 10-year notes at 150 bps plus Treasuries.

The notes priced on the tight side of guidance.

Bank of America Merrill Lynch, Barclays and Morgan Stanley were the lead managers.

The notes are fully and unconditionally guaranteed by parent company Shire plc.

Investor meetings were held in the U.S. and London markets over the previous week.

Shire plans to use the proceeds to repay borrowings due on Jan. 11, 2017 under its January 2016 bridge facilities agreement and any remaining proceeds for general corporate purposes, according to a 424B5 filing with the Securities and Exchange Commission.

Shire is a biotechnology company based in Dublin.

Hess raises $1.5 billion

Hess priced $1.5 billion of senior notes (Baa1/BBB-/BBB) in two parts on Monday, according to an FWP filing with the SEC.

The company sold $1 billion of 4.3% notes due April 1, 2027 at 99.79 to yield 4.325% and a spread of 262.5 bps over Treasuries.

Hess priced $500 million of 5.8% notes due April 1, 2047 at 99.715 to yield 5.82%, or Treasuries plus 337.5 bps.

Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Mizuho Securities USA Inc. and MUFG were the bookrunners.

Proceeds will be used to repurchase the company’s 8.125% notes due 2019, 7.875% notes due 2029, 7.3% notes due 2031 and 7.125% notes due 2033 in a tender offer, to redeem its 1.3% notes due 2017 and for working capital and other general corporate purposes.

The energy company is based in New York City.

American Airlines prices

American Airlines sold $813.8 million of class AA and class A pass-through enhanced equipment trust certificates, series 2016-3, at par on Monday, according to a market source.

The company priced $557.65 million of 3% class AA certificates and $256.14 million of 3.25% class A certificates.

Both tranches have a final expected distribution date of Oct. 15, 2028 and an average life of 8.8 years.

Goldman Sachs, Morgan Stanley, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. were active bookrunners.

Proceeds will be used to purchase new aircraft, according to an FWP filing and a 424B5 filing with the SEC.

The commercial airline, which is a subsidiary of AMR Corp., is based in Fort Worth, Texas.

S&P Global sells notes

S&P Global (Baa1//BBB+) sold $500 million of 2.95% senior notes due Jan. 22, 2027 at a spread of 135 bps over Treasuries on Monday in a Rule 144A/Regulation S private placement transaction, according to a market source and a company news release.

The notes priced on the tight side of guidance.

Citigroup, Goldman Sachs and JPMorgan were active bookrunners. Passive bookrunners were BofA Merrill Lynch and Deutsche Bank.

The notes are guaranteed by subsidiary Standard & Poor's Financial Services LLC.

S&P plans to use the proceeds to redeem all or some of its $400 million 5.9% senior notes due 2017 and for general corporate purposes.

Based in New York, S&P Global, formerly McGraw Hill Financial, Inc., provides ratings, benchmarks, analytics and data to capital and commodity markets.

Gilead Sciences firms

Gilead Sciences’ 2.95% notes due 2027 traded about 1 bp tighter early Monday at 123 bps bid, according to a market source.

The bonds (A3/A/) were quoted on Friday at 124 bps bid, 121 bps offered.

The company sold $1.25 billion of the 10-year notes on Thursday at 125 bps over Treasuries.

The biopharmaceutical company is based in Foster City, Calif.

Ingredion tightens

Ingredion’s 3.2% senior notes due 2026 were seen earlier in the day at 140 bps bid in the secondary market, a source said.

Ingredion priced $500 million of the notes (Baa2/BBB/BBB) on Thursday at a spread of 150 bps over Treasuries.

The maker of starches and sweeteners is based in Westchester, Ill.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.