Time Warner, Rentenbank, Arch Capital, L-3, Avnet, Ameren Illinois price issues; AT&T softens

By Cristal Cody

Eureka Springs, Ark., Nov. 29 – Investment-grade issuers priced more than $5 billion of bonds during Tuesday’s session.

Time Warner Inc. came with $1.5 billion of long 10-year notes.

Landwirtschaftliche Rentenbank sold $1.5 billion of five-year senior notes.

Arch Capital Finance LLC raised $950 million in a two-tranche offering.

L-3 Communications Corp. priced $550 million of 10-year senior notes.

Avnet, Inc. raised $300 million in a five-year notes sale.

Ameren Illinois Co. brought a $240 million add-on to its 4.15% 30-year notes.

Also, Northwest Natural Gas Co. sold $150 million of notes in three tranches on Tuesday.

The Markit CDX North American Investment Grade index closed mostly unchanged at a spread of 74 basis points.

Time Warner’s existing 10-year notes were flat in secondary trading.

Bonds from AT&T Inc., which announced plans to acquire Time Warner in October, were weaker.

Xcel Energy Inc.’s new 3.35% senior notes due 2026 were seen about 6 bps better earlier in the day.

Bank of America Corp.’s 4.183% medium-term subordinated notes due 2027, which priced last week, traded wrapped around issuance.

Time Warner sells $1.5 billion

Time Warner sold $1.5 billion of 3.8% notes due Feb. 15, 2027 on Tuesday with a spread of 155 bps over Treasuries, according to a market source.

The notes priced on the tight side of guidance of 160 bps area plus Treasuries, plus or minus 5 bps.

Barclays, Citigroup Global Markets Inc., Mizuho Securities USA Inc. and Wells Fargo Securities LLC were the bookrunners.

The notes will have a make-whole call until three months prior to maturity and then a par call, according to a 424B3 filing with the Securities and Exchange Commission.

Proceeds will be used for general corporate purposes, including debt repayment.

The media company is based in New York.

Rentenbank sells $1.5 billion

Landwirtschaftliche Rentenbank priced $1.5 billion of 2% five-year senior notes on Tuesday at 99.547, according to a market source and an FWP filing with the SEC.

The notes due Dec. 6, 2021 priced at mid-swaps plus 28.45 bps.

The notes were talked to price at mid-swaps plus 32 bps, tighter than initial guidance in the mid-swaps plus 33 bps area.

Barclays, HSBC Securities (USA) Inc., RBC Capital Markets and Scotiabank Europe plc were the bookrunners.

Proceeds will be used to finance lending activities.

The German development agency for agribusiness is based in Frankfurt.

Arch brings $950 million

Arch Capital Finance priced $950 million of fixed-rate notes (A3/A-/A) in two tranches on Tuesday, according to a company news release.

The company sold $500 million of 4.011% 10-year notes with a spread of 170 bps over Treasuries.

Arch Capital priced $450 million of 5.031% 30-year notes at a 205 bps spread plus Treasuries.

The notes priced on the tight side of guidance.

Credit Suisse Securities (USA) LLC, Barclays, J.P. Morgan Securities LLC, Lloyds Securities Inc., BofA Merrill Lynch, U.S. Bancorp Investments Inc., Wells Fargo and BMO Capital Markets Corp. were the bookrunners.

The notes are guaranteed by parent company Arch Capital Group Ltd.

The bonds have a make-whole call feature until three months prior to maturity and then are callable at par, according to a 424B5 filed with the SEC.

The Hamilton, Bermuda-based reinsurance company will use the proceeds for the company’s planned acquisition of United Guaranty Corp. and AIG United Guaranty (Asia) Ltd. and for anticipated growth in its mortgage and other businesses.

L-3 prices $550 million

L-3 Communications sold $550 million of 3.85% 10-year senior notes due 2026 (Baa3/BBB-/BBB-) with a spread of 160 bps over Treasuries on Tuesday, according to a market source and a news release from parent company L-3 Communications Holdings, Inc.

The notes due Dec. 15, 2026 were talked to price at Treasuries plus 165 bps, plus or minus 2.5 bps, in from initial price thoughts of Treasuries plus 185 bps.

BofA Merrill Lynch, Barclays, Deutsche Bank Securities Inc., MUFG, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey Inc., U.S. Bancorp and Wells Fargo were the bookrunners.

The securities have a make-whole call until three months before maturity and then a par call, according to a 424B5 filing with the SEC.

Proceeds will be used to replenish the amount of cash used and the amount of revolving credit borrowings drawn to repay $200 million of 3.95% senior notes that matured on Nov. 15, 2016 and to redeem all of the company’s $350 million 1.5% senior notes due 2017.

L-3 Communications is a New York-based provider of communication and electronic systems and products used on military and commercial platforms, as well as a contractor in aerospace systems.

Avnet prints $300 million

Avnet priced $300 million of 3.75% five-year notes on Tuesday with a spread of 200 bps over Treasuries, according to an FWP filing with the SEC.

The notes due Dec. 1, 2021 (Baa3/BBB-/) priced at 99.779 to yield 3.799%.

BofA Merrill Lynch, JPMorgan and MUFG were the bookrunners.

Proceeds will be used to repay or redeem subsidiary Premier Farnell’s 5.24% guaranteed senior notes due July 2, 2017, 4.36% guaranteed senior notes due Nov. 15, 2018, 4.83% guaranteed senior notes due Nov. 15, 2021 and 4.01% guaranteed senior notes due Sept. 17, 2024. Avnet expects to use any remaining proceeds to repay debt under credit facilities.

Avnet is a Phoenix-based distributor of electronic components, enterprise computer and storage products and IT solutions and services.

Ameren Illinois reopens

Ameren Illinois priced a $240 million add-on to its 4.15% senior secured notes due March 15, 2046 at 102.753 to yield 3.988%, according to a market source and an FWP filing with the SEC on Tuesday.

The notes (A1/A/) priced with a spread of 100 bps over Treasuries.

The deal was upsized from $225 million.

BofA Merrill Lynch, Mizuho, Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey and TD Securities (USA) LLC were the bookrunners.

Proceeds will be used to repay short-term debt.

The company originally sold $250 million of the notes on Dec. 7, 2015 at 99.001 to yield 4.209% and a spread of 125 bps plus Treasuries.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

Northwest Natural Gas prices

Northwest Natural Gas sold $150 million of series B secured medium-term notes in three tranches on Tuesday, according to an FWP filing with the SEC.

The company priced $75 million of 1.545% secured notes due Dec. 5, 2018, $35 million of 3.211% notes due Dec. 5, 2026 and $40 million of 4.136% notes due Dec. 5, 2046. They all priced at par.

Wells Fargo, U.S. Bancorp, MUFG and CIBC Capital Markets were the bookrunners.

The utility company is based in Portland, Ore.

Time Warner flat

Time Warner’s existing 2.95% notes due 2026 were unchanged on Tuesday at 143 bps bid, a market source said.

Time Warner sold $800 million of the notes on May 5, 2016 at a spread of 135 bps over Treasuries.

The media and entertainment company is based in New York.

AT&T weakens

AT&T’s 4.125% notes due 2026 eased 4 bps on Tuesday to 165 bps bid, according to a market source.

AT&T priced a $900 million add-on to the bonds on May 3, 2016 at Treasuries plus 150 bps. The notes originally were sold on Jan. 29, 2016 in a $1.5 billion offering at 195 bps over Treasuries.

The telecommunications company is based in Dallas.

Xcel Energy stronger

Xcel Energy’s 3.35% notes due 2026 traded at 99 bps bid earlier in secondary trading, a market source said.

The company sold $500 million of the 10-year notes (A3/BBB+/BBB+) on Monday at a spread of 105 bps over Treasuries.

The public utility holding company is based in Minneapolis.

Bank of America eases

Bank of America’s 4.183% notes due 2027 were quoted early Tuesday about 3 bps softer at 185 bps bid, according to a market source.

The bank sold $2 billion of the notes (Baa3/BBB/A-) on Nov. 21 at a spread of 185 bps plus Treasuries.

The financial services company is based in Charlotte, N.C.

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