Marathon Petroleum deal faces pushback; Marathon Oil, Southwestern Energy bonds widen

By Aleesia Forni and Cristal Cody

New York, Dec. 7 – New deals from Macy’s Retail Holdings Inc. and Ameren Illinois Co. kicked off the high-grade market’s week on Monday.

Financial issuers Toronto-Dominion Bank, Credit Suisse Group Funding (Guernsey) Ltd. and National Bank of Canada also tapped the primary.

Crude oil refiner Marathon Petroleum was unable to bring pricing in from guidance levels on two of three tranches of its new offering and was forced to widen the spread by around 20 basis points on the 30-year tranche.

The company priced $600 million of notes due 2018 at Treasuries plus 150 bps, $650 million of notes due 2020 at Treasuries plus 175 bps and $250 million of notes due 2045 at Treasuries plus 290 bps.

One source attributed at least part of the deal’s struggle to the 6% tumble in oil prices during the session that sent levels to their cheapest in nearly seven years.

Elsewhere in the primary, Credit Suisse garnered a final order book of $3.4 billion for its new $2 billion five-year offering, while Macy’s Retail and Ameren Illinois each sold their respective new deals at the tightest side of guidance.

In total, the primary hosted $7.6 billion of new issuance.

In the secondary market, Marathon Oil Corp.’s senior notes (Baa1/BBB) widened more than 20 bps on the long end on Monday.

Southwestern Energy Co.’s senior notes (Baa3/BBB-) traded 2 bps to 4 bps weaker.

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