Time Warner, Macy's sell as primary rush continues; SCE&G firms; Macy's, Time Warner, Aon ease

By Cristal Cody and Aleesia Forni

Virginia Beach, May 20 - The pace of issuance in the high-grade market continued on Tuesday, as Macy's Retail Holdings Inc., KfW, Aon plc and Time Warner Inc. brought new deals to the primary.

Time Warner sold a $2 billion offering of senior notes in three parts on Tuesday.

The media company sold a $650 million tranche of 2.1% five-year notes at Treasuries plus 60 basis points, a $750 million tranche of 3.55% notes due 2024 at Treasuries plus 105 bps and a $600 million tranche of 4.65% 30-year bonds with a spread of Treasuries plus 135 bps.

All three tranches priced at the tight end of talk.

Aon sold an upsized $800 million of senior notes in 10- and 30-year tranches.

The company priced $250 million of 3.5% notes due 2024 at Treasuries plus 100 bps and $550 million of 4.6% 30-year bonds at Treasuries plus 125 bps.

Both tranches priced at the tight end of talk.

Macy's Retail Holdings came to market with $500 million of 3.625% notes due 2024, which priced with a spread of Treasuries plus 112.5 bps.

Pricing was at the tight end of talk.

Also on Tuesday, South Carolina Electric & Gas Co. sold $300 million of 4.5% first mortgage bonds at Treasuries plus 120 bps.

KfW sold an upsized $6 billion offering of 0.5% two-year global notes with a spread of mid-swaps minus 3 bps on Tuesday.

The issue was talked in the mid-swaps minus 1 bp area.

Kommunalbanken priced $1 billion of 1.75% five-year notes at mid-swaps plus 12 bps, a market source said.

The notes sold at the tight end of the Treasuries plus 13 bps area talk.

In other market action, Comerica Inc. sold a $350 million issue of 2.125% five-year notes at the tight end of talk with a spread of Treasuries plus 62 bps.

The session also saw Freddie Mac announce that it would not issue Reference Notes in May, according to a company news release.

Japan Bank for International Cooperation joined the forward calendar on Tuesday, announcing plans to offer a benchmark issue of senior notes in five- and 10-year tranches.

Sweden is also planning to bring an offering of notes to the bond market, announcing price talk in the area of mid-swaps minus 4 bps.

The session's new deals were largely met with strong demand, as the market shrugged off some of the weakness seen on Monday.

Time Warner's new deal was nearly three times oversubscribed, a market source said, while the issue printed 10 bps to 15 bps tighter than initial guidance.

Meanwhile, the new $800 million issue from Aon, which was upsized from $600 million, was more than five times oversubscribed.

Investment-grade bonds traded mostly flat to weaker during the session, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 1 bp to a spread of 66 bps.

New issues were mixed in aftermarket trading.

South Carolina Electric's 4.5% bonds due 2064 tightened nearly 10 bps on the bid side in the secondary market, a trader said.

Macy's 3.625% notes due 2024 eased 2 bps in aftermarket trading.

Time Warner's three tranches of notes traded flat to 5 bps wider going out the door, according to a trader.

Aon's two tranches of notes eased 2 bps in the secondary market, a trader said.

Seagate HDD Cayman's new $1 billion split-rate issue, which priced at par to yield 4.75%, was seen trading above par late in the day, according to a trader.

Seagate's new notes traded at 100.375 offered in the secondary market, the trader said.

Time Warner brings $2 billion

Time Warner priced $2 billion of senior notes (Baa2/BBB/BBB+) in three tranches on Tuesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $650 million of 2.1% five-year notes priced at 99.948 to yield 2.111%, or Treasuries plus 60 bps.

A second tranche was $750 million of 3.55% notes due 2024 priced with a spread of Treasuries plus 105 bps. Pricing was at 99.908 to yield 3.561%.

Finally, $600 million of 4.65% 30-year bonds priced with a spread of Treasuries plus 135 bps, or 98.93 to yield 4.717%.

All three tranches sold at the tight end of talk.

Time Warner's 2.1% notes due 2019 traded wrapped around issuance at 60 bps bid, 57 bps offered, according to a trader.

The 3.55% notes due 2024 eased in secondary trading to 108 bps bid, 104 bps offered.

The 4.65% debentures due 2044 traded wider at 140 bps bid, 134 bps offered, according to the trader.

BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Credit Agricole Securities (USA) Inc., Goldman Sachs & Co., Mizuho Securities USA Inc., RBS Securities Inc., Santander Investment Securities Inc., SMBC Nikko Securities America, Inc. and Morgan Stanley & Co. LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes, including share repurchases.

The media company is based in New York.

Aon upsizes

Aon priced an upsized $800 million issue of senior notes (Baa2/A-/BBB+) in tranches due 2024 and 2044 on Tuesday, according to a market source and an FWP filed with the SEC.

A $250 million tranche of 3.5% senior notes due 2024 priced with a spread of Treasuries plus 100 bps.

The notes sold at 99.898 to yield 3.512%.

A second tranche was $550 million of 4.6% 30-year bonds priced at 99.739 to yield 4.616%, or Treasuries plus 125 bps.

Both tranches sold at the tight end of talk.

The notes are guaranteed by Aon Corp.

Aon's 3.5% notes due 2024 traded wider at 102 bps bid, 97 bps offered, according to a trader.

The 4.6% notes due 2044 eased to 127 bps bid, 123 bps offered.

Proceeds from the sale will be used for general corporate purposes.

BofA Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities LLC and Morgan were the joint bookrunners.

The provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services is based in London.

Macy's prices tight

Macy's Retail sold $500 million of 3.625% 10-year senior notes with a spread of Treasuries plus 112.5 bps on Tuesday, according to a market source and an FWP filed with the SEC.

The notes sold at the tight end of talk.

Pricing was at 99.899 to yield 3.637%.

The notes (Baa2/BBB+/BBB) will be guaranteed by Macy's, Inc.

Macy's 3.625% notes due 2024 eased to 114 bps offered in the secondary market, a trader said.

BofA Merrill Lynch, Credit Suisse Securities, Goldman Sachs, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC and JPMorgan were the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, retirement of debt and repurchasing outstanding common stock.

The department store chain is based in Cincinnati.

SCE&G new issue

South Carolina Electric & Gas was in Tuesday's market with a $300 million offering of 4.5% first mortgage bonds that priced with a spread of Treasuries plus 120 bps, according to an informed source and an FWP filed with the SEC.

The bonds (A3/A/A) mature on June 1, 2064 and priced at 98.938 to yield 4.554%.

South Carolina Electric's 4.5% bonds due 2064 tightened to 111 bps bid, 108 bps offered in aftermarket trading, according to a trader.

There is a make-whole call at 20 bps over Treasuries until Dec. 1, 2063. Thereafter, the bonds are callable at par until maturity.

Credit Suisse Securities, JPMorgan, TD Securities (USA) LLC and Wells Fargo Securities were the joint bookrunners.

The Columbia, S.C.-based company will use the proceeds to repay short-term debt, to finance capital expenditures and for general corporate purposes.

SCE&G is the principal subsidiary of Scana Corp., an energy-based holding company.

KfW prices $6 billion

KfW priced $6 billion of 0.5% two-year global notes (Aaa/AAA/AAA) at 99.97 with a spread of mid-swaps minus 3 bps on Tuesday, according to an informed source and an FWP filed with the SEC.

The deal was upsized from $5 billion.

The notes were talked in the mid-swaps minus 1 bp area.

BNP Paribas, Credit Suisse and RBC Capital Markets LLC were the joint bookrunners.

The German government-owned development bank is based in Frankfurt.

Kommunalbanken prices tight

Kommunalbanken sold $1 billion of 1.75% notes (Aaa/AAA/) due May 28, 2019 at mid-swaps plus 12 bps, a market source said.

Pricing was at the tight end of the Treasuries plus 13 bps area talk.

The sale was done under Rule 144A and Regulation S.

The bookrunners were RBC Capital Markets, Daiwa, Goldman Sachs and JPMorgan.

The Norwegian government-funded lender to municipalities is based in Oslo.

Comerica new issue

Comerica priced $350 million of 2.125% five-year senior notes (A3/A-/A) on Tuesday at par with a spread of Treasuries plus 62 bps, according to a market source and an FWP filed with the SEC.

The notes priced at the tight end of talk.

Barclays and JPMorgan were the joint bookrunners.

Comerica plans to use the proceeds for general corporate purposes.

The financial services company is based in Dallas.

Freddie Mac passes

Freddie Mac announced on Tuesday that it would not issue Reference Notes in May, according to a company news release.

The government-sponsored enterprise is based in McLean, Va.

JBIC on deck

Japan Bank for International Cooperation is planning to sell a benchmark offering of senior notes in five- and 10-year tranches, according to a market source and a 424B5 filed with the SEC.

The notes will be guaranteed by Japan.

Barclays, BofA Merrill Lynch, Goldman Sachs and JPMorgan are the joint bookrunners.

Proceeds will be used for the bank's financing operations.

The financial institution is based in Tokyo.

Sweden sets talk

Sweden announced price talk for a planned benchmark offering of three-year notes in the mid-swaps minus 4 bps area, a market source said.

The joint bookrunners are Citigroup Global Markets, Deutsche Bank Securities Inc. and JPMorgan.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 70 bps bid, 73 bps offered. Citigroup Inc.'s CDS costs rose 1 bp to 71 bps bid, 74 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 57 bps bid, 60 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 74 bps bid, 77 bps offered. Morgan Stanley's CDS costs rose 1 bp to 74 bps bid, 77 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 3 bps to 84 bps bid, 87 bps offered.

Paul Deckelman contributed to this review.

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