Time Warner Cable, Allied World, AMB, Integrys among sellers; UPS, Sprint trade lower

By Andrea Heisinger and Cristal Cody

New York, Nov. 9 - Time Warner Cable Inc. brought the biggest deal of bonds to the high-grade market on Tuesday. The company was joined by Allied World Assurance Co. Holdings, Ltd., Integrys Energy Group, Inc., AvalonBay Communities Inc., AMB Property, LP, Entergy Arkansas, Inc. and Cleco Power LLC.

This full market followed Monday where more than $10 billion of bonds were priced and deals numbered more than 13.

A market source said early Tuesday that the amount of new high-grade paper can be pinned on not only low coupons but a good earnings season and "the fact that everyone's oversubscribed and pricing tight [spreads to guidance]."

Cable TV operator Time Warner sold $1.9 billion in two tranches. The notes are guaranteed by two of the company's subsidiaries.

Allied World Assurance priced $300 million of 10-year notes in a deal that was about six times oversubscribed, a source said.

One of the first sales to get done came from Integrys Energy. The holding company priced $250 million of 10-year notes by early afternoon.

Apartment community developer and operator AvalonBay sold $250 million of notes due 2021.

The smallest offering came from AMB Property. The industrial property owner and developer sold $175 million of notes due 2018.

Electric utility Cleco Power sold $250 million of 30-year bonds.

Another utility, Entergy Arkansas, priced $350 million of mortgage bonds due 2021.

Bermuda-based insurance and reinsurance company Allied World Assurance priced its $300 million of 10-year notes prior to the market close.

New deals firm in secondary

In the secondary market, new debt from Time Warner, AvalonBay, AMB Property and Entergy Arkansas all firmed in trading, sources said.

Overall investment-grade Trace volume climbed to more than $13 billion from $10 billion on Tuesday in the wake of all the new offerings, a market source said.

In debt priced on Monday, United Parcel Service, Inc.'s 10-year notes were weaker in secondary trading on Tuesday, while the new notes from Ventas Capital Corp. firmed 10 bps, sources said.

Also, PPG Industries, Inc.'s new 30-year bonds were stronger in trading on Tuesday, a trader said.

Financial paper was weaker on the day by 5 bps to 10 bps, one source said late in the afternoon.

"It wasn't all day that we saw this weakness - just in the last couple of hours," the source said.

The Markit CDX Series 14 North American investment-grade index eased 2 bps on Tuesday to a spread of 90 bps, according to Markit Group Ltd.

Time Warner's major deal sent other cable and media bonds 5 bps to 8 bps wider, a trader said.

Elsewhere, Sprint Nextel Corp.'s debt has moved out in trading since Friday on the company's announcement of substantial doubt over Clearwire's ability to continue operating. Sprint owns a 54% stake in the wireless communications company.

"Sprint's paper just has gotten destroyed over the last two trading sessions," a trader said. "It's down another 2 points today. The longer paper lost about 4 points between Friday afternoon and today."

Overland Park, Kan.-based Sprint's 8.75% bonds due 2032 were last quoted at 106.25, 107.

In government bonds, Treasuries fell, sending yields up, with the 30-year bond yield easing 13 bps after the government's auction of 10-year notes.

The yield on the 30-year bond rose to 4.25% from 4.12%. The yield on the benchmark 10-year note jumped 11 bps to 2.66%.

Time Warner leads supply

Time Warner Cable priced $1.9 billion of senior notes (Baa2/BBB/BBB) in two tranches in front of the market close, a source close to the offering said.

The $700 million tranche of 4.125% notes due 2021 priced at a spread of Treasuries plus 155 bps. The spread was in line with revised price talk in the 155 bps area, a source said. Whispered guidance had been in the mid-100 bps area.

A $1.2 billion tranche of 5.875% 30-year debentures sold at a spread of 180 bps over Treasuries. They priced in line with revised price guidance in the 180 bps area. Whispered talk was in the 180 bps to 185 bps range.

Books for the 10-year tranche were about $1.5 billion, the source said, and the 30-year bonds had about $2 billion.

"There was much more interest in the 30-year," a source said. That would normally be surprising after the previous week's hammering of 30-year Treasury yields following the Federal Reserve meeting, but there was a poor 10-year Treasury note auction earlier on Tuesday.

"There was a sell-off in everything - Treasuries, equities," he said.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and RBS Securities Inc. were the bookrunners.

Proceeds are being used for general corporate purposes, including debt repayment and stock repurchase.

The paper is guaranteed by Time Warner Entertainment Co. LP and TW NY Holding, Inc.

Time Warner's new deal firmed in secondary trading, a source said.

"Both are about 2 basis points better right now," the source said.

Earlier in the gray market, the notes due 2021 were seen at 145 bps bid, a trader said. The tranche of bonds due 2040 traded at 181 bps bid, 176 bps offered.

The cable TV operator is based in New York City.

Allied World's $300 million

Allied World Assurance Co. Holdings sold $300 million of 5.5% 10-year senior notes (Baa1/BBB) to yield Treasuries plus 290 bps, a source who worked on the sale said.

Whispered price talk was in the low 300 bps, the source said. That was later revised to the 300 bps area, and the notes priced at the tight end of that talk.

Books were about six times oversubscribed.

Bank of America Merrill Lynch and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including the repurchase of common stock, to pay dividends to shareholders or for potential acquisitions.

The insurance and reinsurance company is based in Bermuda.

Small sales fill primary

There was no shortage of new investment-grade-rated paper for the second day in a row, but the deals were a little different Tuesday.

Those that priced on Monday were mostly upsized and of varied amounts, including a few that were at least $1 billion. Tuesday's sales were almost all under $500 million, and the amount didn't change from when the deals were announced.

"They're mostly lower-rated [names]," one market source said. "They needed to get a certain amount."

The tone was softer, a source said, which "stems from the [10-year Treasury] auction" early in the afternoon.

"People were trying to come out before any big movement in the market," he said in reference to why there were more high-grade bond sellers for the day.

Wednesday is looking "slower" the market source said, citing a dwindling supply on the calendar and companies pricing bonds early in the week ahead of Thursday's market close.

One source said his desk had one deal, but was unsure on which of the two remaining days of the week it would price.

AMB prices $175 million

San Francisco-based AMB Property sold $175 million of 4% notes due 2018 (Baa1/BBB/BBB) at a spread of Treasuries plus 225 bps, a source who worked on the sale said.

The deal size was originally at $150 million prior to the launch, the source said. The notes were whispered in the 240 bps to 245 bps range, and the notes priced in line with revised guidance in the 225 bps area.

The deal was "definitely oversubscribed," the source said, but was not sure by how much.

Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Morgan Stanley and Bank of America Merrill Lynch were the bookrunners.

Proceeds are being used to reduce borrowings under a $500 million unsecured revolving credit facility. The remainder will be used for general corporate purposes, including the acquisition of properties or portfolios, equity investments in co-investment funds, debt repayment, redemption or repurchase of securities, loans to affiliates, or capital expenditures or working capital.

The notes are guaranteed by AMB Property Corp.

In the secondary, a trader saw the notes firm to 218 bps bid, 213 bps offered.

Another source saw the notes 1 point tighter on the offer side at 212 bps.

The industrial property owner, developer and operator is based in San Francisco.

Integrys offers 10-year

Chicago-based Integrys Energy Group priced $250 million of 4.17% 10-year senior notes (Baa1/BBB) at 155 bps over Treasuries, an informed source said.

The notes were sold tighter than whispered guidance in the 162.5 bps area and at the tight end of revised talk in the 155 bps to 160 bps range.

There was about $1.1 billion in interest on the books.

Bookrunners were Citigroup, Mitsubishi UFJ Securities USA Inc. and Morgan Stanley.

Proceeds are being used to repay short-term debt, to fund a portion of the repayment by subsidiary People's Energy Corp. of 6.9% notes maturing in January 2011 and for general corporate purposes.

The energy holding company for electric and natural gas subsidiaries is based in Chicago.

AvalonBay's $250 million

AvalonBay Communities priced $250 million of 3.95% notes due 2021 (Baa1/BBB+) by mid-afternoon at a spread of Treasuries plus 137.5 bps, a market source away from the sale said.

Deutsche Bank Securities Inc. and JPMorgan were the bookrunners.

The proceeds are being used for working capital, capital expenditures and other general corporate purposes. Those include development and redevelopment of apartment communities and repayment and refinancing of other debt.

In the secondary market, the notes firmed to 136 bps bid, 132 bps offered, according to sources.

The manager and developer of apartment communities is based in Arlington, Va.

Cleco sells 30-year bonds

Cleco Power issued $250 million of 6% 30-year bonds (Baa2/BBB) by mid-afternoon at a spread of Treasuries plus 187.5 bps, a source away from the deal said.

Credit Agricole CIB, JPMorgan and KeyBanc Capital Markets Inc. were bookrunners.

Proceeds are being used for general corporate purposes, including financing a portion of costs related to the Acadiana Load Pocket transmission project and advanced metering infrastructure project.

The electric company is based in Pineville, La.

Entergy Arkansas' bonds

Entergy Arkansas priced $350 million of 3.75% first mortgage bonds due 2021 (A3/A-) at a spread of Treasuries plus 110 bps, according to an FWP filing with the Securities and Exchange Commission.

Goldman Sachs, RBS, Scotia Capital (USA) Inc. and Stephens Inc. were the bookrunners.

Proceeds are being used to repay $150 million of 5.4% mortgage bonds due in 2018, to repay $120 million of Pope County Arkansas 6.3% pollution control revenue refunding bonds due Nov. 1, 2020 and $19.5 million of 6.3% pollution control bonds due Dec. 1, 2016 and for general corporate purposes.

The bonds tightened in secondary trading to 104 bps bid, 101 bps offered, a source said.

The utility company is based in Little Rock, Ark.

PPG 30-year bonds firm

PPG Industries' 30-year bonds were stronger in secondary trading on Tuesday, while the other two tranches were mostly unchanged, a trader said.

The company sold $1 billion of senior notes (Baa1/BBB+/A-) in three parts on Monday.

The tranche of 1.9% notes due 2016 priced at a spread of Treasuries plus 95 bps. In secondary trading, the notes were seen at 94 bps on the offer side, with no bids, the trader said.

The second tranche of 3.6% notes due 2020 traded unchanged from the issue spread of 120 bps over Treasuries.

The third tranche of 5.5% bonds due 2040 sold at Treasuries plus 145 bps. The bonds firmed in the secondary to 140 bps bid, 138 bps offered.

The diversified coatings and chemical manufacturing company is based in Pittsburgh.

UPS 10-years widen

United Parcel Service's shorter-dated debt continued to widen after pricing on Monday, a trader said.

"The 10s are a bit wider. Last I saw it was 72, 69," the trader said. The 3.125% notes due 2021 priced at 65 bps over Treasuries.

UPS' second tranche of 4.875% bonds due 2040 were slightly stronger in the secondary market.

The bonds priced at 85 bps over Treasuries. Late Tuesday, the bonds had firmed to 84 bps bid, 81 bps offered.

"The original price talk on the 10-year tightened by 5 basis points, so it's basically just giving that back," the trader said.

UPS priced a benchmark $2 billion of senior notes (Aa3/AA-) in two tranches on Monday.

The package delivery company is based in Atlanta.

Ventas Capital narrows

Also, the new debt from Ventas Capital firmed 10 bps in secondary trading, a source said.

Ventas Realty and Ventas Capital priced $400 million of 3.125% senior notes due 2015 (Baa3/BBB-/BBB) on Monday to yield Treasuries plus 210 bps.

The notes traded late Tuesday at 200 bps bid, 195 bps offered, the source said.

The real estate investment trust of senior housing and health care properties is based in Chicago.

Boston Properties tightens

Boston Properties, LP's new debt firmed on Tuesday. The company priced $850 million of 4.125% senior notes due 2021 (Baa2/A-/BBB) at a spread of Treasuries plus 165 bps.

"They're trading around 157, 152," a trader said.

The business arm of real estate investment trust Boston Properties, Inc. is based in Boston.

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