Halliburton bond sees blowout demand; Halliburton tightens in aftermarket; Charter mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 5 – Halliburton Co.’s jumbo acquisition financing highlighted a Thursday primary that saw more than $13 billion of new investment-grade-rated paper price.

Proceeds from the new $7.5 billion offering will be used to fund the energy company’s $34 billion acquisition of Baker Hughes Inc.

In what one source noted was an extremely uncommon occurrence, all five tranches of the new bond sold 5 basis points tighter than price guidance.

Furthermore, the deal attracted an order book that was more than five times oversubscribed.

The market’s tone continues to hold up well, with deals seeing significant order books even in the face of the onslaught of supply the market has digested in recent weeks.

The week’s total supply now sits at more than $26 billion.

In other primary happenings on Thursday, the primary saw deals from Shell International Finance BV, Westar Energy, Inc., Stanley Black & Decker Inc. and Alexandria Real Estate Equities, Inc.

Halliburton’s new notes traded about 4 bps to 12 bps tighter in the secondary market.

Shell International Finance’s existing notes were mostly unchanged over the session.

Charter Communications Inc.’s existing senior secured notes (Ba1/BBB-) were mixed in secondary trading after tightening on Wednesday and early Thursday.

The Markit CDX North American Investment Grade 25 index eased about 1 bp to end the day at a spread of 78 bps.

Halliburton acquisition deal

Halliburton sold $7.5 billion of senior notes (A2/A) in five tranches on Thursday, according to an informed source.

The offering included $1.25 billion of 2.7% five-year notes priced at 110 bps over Treasuries.

Pricing came tighter than talk set in the Treasuries plus 120 bps area and inside initial price thoughts in the range of Treasuries plus 140 bps to 150 bps.

Also priced was $1.25 billion of 3.375% seven-year notes at 140 bps over Treasuries.

The notes sold tighter than the Treasuries plus 150 bps area guidance. Initially, talk was in the 170 bps to 180 bps range over Treasuries.

A $2 billion tranche of 3.8% 10-year bonds sold with a 160 bps spread over Treasuries.

Guidance was in the 170 bps area over Treasuries after having firmed from talk in the 195 bps area over Treasuries.

A $1 billion 4.85% 20-year tranche sold at 185 bps over Treasuries.

The 20-year tranche was guided in the 195 bps area over Treasuries and talked in the Treasuries plus 215 bps to 225 bps range.

Finally, $2 billion of 5% 30-year bonds priced at 200 bps over Treasuries.

The notes sold tighter than the Treasuries plus 210 bps area guidance and talk set in the range of Treasures plus 230 bps to 240 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Mizuho Securities are the bookrunners.

Proceeds will be used for the acquisition of Baker Hughes Inc.

Halliburton is a Houston-based diversified energy services company.

Halliburton’s 2.7% notes due 2020 tightened to 98 bps bid, 92 bps offered in the secondary market, a trader said.

The tranche of 3.375% notes due 2022 firmed to 133 bps bid, 130 bps offered in aftermarket trading.

Halliburton’s 3.8% notes due 2025 headed out at 155 bps bid, 152 bps offered.

The company’s 4.85% notes due 2035 traded better at 181 bps bid, 177 bps offered in the secondary market, the trader said.

The tranche of 5% bonds due 2045 tightened to 195 bps bid, 191 bps offered.

Shell five-parter

In another jumbo bond deal on Thursday, Shell International priced a $5 billion offering of guaranteed senior notes (Aa1/AA-) in five tranches, according to an FWP filing with the Securities and Exchange Commission.

There was $1 billion of floating-rate notes due May 10, 2017 priced at par to yield Libor plus 32 bps.

A $1 billion 1.25% two-year note sold at 99.831 to yield 1.336%. Pricing was with a spread of Treasuries plus 52 bps.

Also, $500 million of three-year floaters priced at par to yield Libor plus 58 bps.

And $1.25 billion of 1.625% three-year notes sold at 99.671 to yield 1.738%, or Treasuries plus 60 bps.

There was $1.25 billion of 2.25% five-year notes sold at 99.451 to yield 2.367% with a spread of Treasuries plus 73 bps.

All tranches came at the tight end of price guidance.

Citigroup, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint bookrunners.

The Hague, the Netherlands-based oil and gas company plans to use the proceeds for general corporate purposes.

The notes will be guaranteed by Royal Dutch Shell plc.

Westar Energy mortgage bonds

Westar Energy sold $550 million of first mortgage bonds (A2/A/A) in two tranches on Thursday, both tight of initial spread thoughts, according to a market source and an FWP filed with the SEC.

There was a $250 million 10-year tranche of 3.25% bonds sold at 99.999 to yield 3.25%, or Treasuries plus 100 bps.

Also, $300 million of 4.25% 30-year mortgage bonds priced with a 125 bps spread over Treasuries. The notes sold at 99.594 to yield 4.274%.

BofA Merrill Lynch, BNY Mellon Capital Markets LLC, Citigroup and Wells Fargo Securities LLC are the bookrunners.

Proceeds from the tranche due 2045 will be used to redeem $300 million of 8.625% mortgage bonds due 2018, while proceeds from the tranche of bonds due 2025 will be used to repay debt under a commercial paper program.

Westar Energy is a Topeka, Kan.-based electric utility.

Stanley remarketing

And Stanley Black & Decker priced a $632.5 million remarketing of its subordinated notes due Nov. 17, 2018 at Treasuries plus 130 bps, according to an FWP filing with the SEC.

The 2.451% notes (Baa2/A-/BBB+) were sold at par.

The notes were originally issued as junior subordinated notes included in the convertible preferred units issued in November 2010.

The remarketing agents are BofA Merrill Lynch, Citigroup, JPMorgan and Morgan Stanley.

Stanley Black & Decker is a New Britain, Conn.-based maker of hand tools, power tools and accessories.

Alexandria new issue

Pasadena, Calif.-based Alexandria Real Estate priced $300 million 4.3% senior notes (Baa2) due Jan. 15, 2026 at Treasuries plus 210 bps on Thursday, according to a market source and an FWP filed with the SEC.

Pricing was at 99.624 to yield 4.345%.

The offering, which is guaranteed by Alexandria Real Estate Equities LP, sold at the tight end of the Treasuries plus 215 bps area guidance, which had firmed from initial talk in the Treasuries plus 225 bps to 230 bps range.

Bookrunners are Goldman Sachs & Co., BofA Merrill Lynch, Citigroup and JPMorgan.

Proceeds will be used to pay the outstanding balance of an unsecured senior line of credit.

Charter mixed

Charter Communications’ 4.908% notes due 2025 traded late afternoon flat at 234 bps bid, a market source said.

The notes were quoted early in the day at 233 bps offered.

The company sold $4.5 billion of the notes on July 9 at a spread of Treasuries plus 260 bps.

Charter Communications’ 6.484% notes due 2045, seen earlier in the day at 314 bps offered, firmed about 4 bps to 318 bps bid in late afternoon trading.

Charter Communications sold $3.5 billion of the bonds in the July 9 offering at Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

Shell mostly flat

Shell International Finance’s 2.125% notes due 2020 traded flat to 1 bp softer at 60 bps bid on Thursday, according to a market source.

Shell sold $2 billion of the five-year notes on May 6 at a spread of Treasuries plus 60 bps.

The company’s 3.25% notes due 2025 were unchanged at 112 bps bid.

Shell International Finance sold $2.75 billion of the notes in the May 6 sale at Treasuries plus 105 bps.

The company is a subsidiary of the Hague, Netherlands-based Royal Dutch Shell plc.

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