Comcast prices to strong demand; Kinder Morgan, KfW enter primary; Time Warner Cable firms

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 19 - Kinder Morgan Energy Partners LP and Comcast Corp. hit Wednesday's primary market amidst the release of minutes from the Federal Reserve's recent policy meeting.

Comcast led the day's session, pricing a $2.2 billion two-part sale of senior notes.

There was $1.2 billion of 3.6% 10-year bonds sold with a spread of 93 basis points over Treasuries.

The sale came at the tight end of talk, which was set in the area of Treasuries plus 95 bps.

A $1 billion tranche of of 4.75% 30-year bonds priced on top of talk at Treasuries plus 110 bps.

The bond offering follows the company's announcement last week that it would acquire Time Warner Cable Inc. for $45.2 billion.

One market source noted that the sale was more than four times oversubscribed.

Kinder Morgan Energy Partners came to market with a $1.5 billion issue of senior notes in seven- and 30-year tranches.

A $750 million tranche of 3.5% notes due 2021 priced at Treasuries plus 143 bps, while $750 million of 5.5% 30-year bonds priced with a spread of Treasuries plus 185 bps.

KfW priced on Wednesday a $4 billion issue of 0.75% notes due 2017 at mid-swaps plus 1 bp, an informed source said.

The notes priced tight of the mid-swaps plus 3 bps talk.

In other market action on Wednesday, Canada announced plans to price a five-year offering of U.S. dollar-denominated notes.

Talk on the deal, which is expected to price Thursday, is set at 12 bps to 14 bps over Treasuries.

Germany's Erste Abwicklungsanstalt also announced price guidance on Wednesday for its planned benchmark offering of three-year notes.

Price guidance is set in the low 20 bps area over mid-swaps.

Nederlandse Waterschapsbank NV plans to sell a $150 million add-on to its floating-rate notes due 2018, according to a market source.

The notes have a coupon of Libor plus 23 bps, and yield is being talked at Libor plus 22 bps.

Wednesday's session also saw Autoliv Inc. join the forward calendar.

The Stockholm-based company announced plans to issue new senior debt during the first quarter of 2014, according to an EX-99.1 filed with the Securities and Exchange Commission.

Also on Wednesday, Fannie Mae announced that it will not use its Feb. 19 Benchmark Notes announcement date this month.

Primary action was somewhat light on Wednesday as the market focused on the release of the Fed minutes, though one source noted he "didn't see too much of an impact."

So far this week, nearly $11 billion of new paper has hit the high-grade primary market.

With a session "similar to today" expected for Thursday, supply could fall within earlier predictions of $15 billion to $20 billion for the holiday-shortened week.

Investment-grade credit spreads eased 1 bps to 2 bps in general over the session on Wednesday, sources said.

The Markit CDX North American Investment Grade series 21 index rose 2 bps to a spread of 66 bps.

In aftermarket trading, Kinder Morgan's two tranches of notes tightened 7 bps on the short end and 5 bps on the long end, a trader said.

Comcast's two-part offering of notes traded 1 bp to 2 bps tighter, according to a trader.

"Haven't seen any grey markets on the new deal," a trader at another desk said.

Comcast's existing bonds brought a year ago were active, sources said. The 2.85% notes due 2023, which were priced in a $750 million offering on Jan. 8, 2013 at 100 bps plus Treasures, traded in the mid to high 60 bps area, a trader said.

Comcast's outstanding 4.5% notes due 2043 headed out in the 103 bps to 107 bps area, according to a trader. Comcast sold $500 million of the notes in the January 2013 offering at 145 bps plus Treasuries.

In other trading, Time Warner Cable Inc.'s bonds (Baa2/BBB/BBB) tightened following the Comcast issuance, according to market sources.

Comcast sells $2.2 billion

Comcast priced $2.2 billion of senior notes (A3/A-/A-) in two tranches, according to a syndicate source.

The company sold $1.2 billion of 3.6% 10-year bonds at 93 bps over Treasuries, or 99.426, to yield 3.669%.

Pricing was at the tight end of talk, which was set in the Treasuries plus 95 bps area.

A second tranche was $1 billion of 4.75% bonds due 2044 priced on top of talk with a spread of Treasuries plus 110 bps.

The notes sold at 99.114 to yield 4.806%.

In the secondary market, Comcast's 3.6% notes due 2024 traded at 92 bps bid, according to a trader.

The 4.75% bonds due 2044 firmed to 108 bps bid.

Proceeds will be used for general corporate purposes and working capital.

BofA Merrill Lynch, BNP Paribas Securities Corp., RBC Capital Markets Inc. and Wells Fargo Securities LLC were the joint bookrunners.

Comcast is a Philadelphia-based provider of entertainment, information and communication products and services.

Kinder Morgan two-parter

Kinder Morgan Energy priced $1.5 billion of senior notes (Baa2/BBB/BBB) in two tranches on Wednesday, according to a syndicate source and an FWP filed with the Securities and Exchange Commission.

A $750 million tranche of 3.5% notes due 2021 priced at 99.494 to yield 3.582% or Treasuries plus 143 bps, while a $750 million tranche of 5.5% 30-year bonds priced at 99.214, yielding 5.554%.

The notes priced with a spread of Treasuries plus 185 bps.

Kinder Morgan's 3.5% notes due 2021 tightened to 135 bps bid, 132 bps offered in the secondary market, a trader said.

The 5.5% bonds due 2044 firmed to 180 bps bid, 178 bps offered.

Deutsche Bank Securities Inc., RBS Securities Inc., UBS Securities LLC, Barclays, DnB NOR Markets Inc., Mitsubishi UFJ Securities (USA) Inc., Scotia Capital (USA) Inc. and Wells Fargo Securities were the joint bookrunners.

The Houston-based pipeline operator plans to use the proceeds to repay commercial paper debt and for general partnership purposes.

KfW sells $4 billion

KfW priced a $4 billion issue of 0.75% three-year notes (Aaa/AAA/AAA) at 99.837, or mid-swaps plus 1 bp, according to an informed source and an FWP filed with the SEC.

The notes priced tighter than the mid-swaps plus 3 bps talk.

Deutsche Bank Securities, Nomura Securities Co. Ltd. and TD Securities were the joint bookrunners.

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

Canada sets talk

Canada set guidance on Wednesday for a planned offering of five-year U.S. dollar-denominated notes, according to informed sources.

Talk is set at 12 bps to 14 bps over Treasuries. The deal is expected to price on Thursday.

J.P. Morgan Securities LLC, RBC Capital Markets, Scotia Capital and HSBC Securities are the bookrunners.

Canada was last in the U.S. high-grade market selling $3 billion of 0.875% global notes due 2017 to yield Treasuries plus 8 bps on Feb. 7, 2012.

EAA plans three-years

Germany's Erste Abwicklungsanstalt announced guidance on Wednesday for its planned benchmark offering of three-year notes, according to a syndicate source.

The notes are being guided in the low 20 bps area over mid-swaps.

Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and Daiwa Securities are the joint bookrunners.

The public law agency is charged with winding up portfolios transferred to it and is based in Dusseldorf.

Nederlandse Waterschapsbank talk

Nederlandse Waterschapsbank is planning to price a $150 million tap of its existing floating-rate notes (Aaa/AA+/) with a coupon of Libor plus 23 bps due 2018, according to a market source.

Yield is talked at Libor plus 22 bps.

HSBC Securities and RBS Securities are managing the sale.

The original $350 million issue priced at par in a Rule 144A and Regulation S sale on Feb. 7.

The issuer provides loans to municipalities and other public programs and is based in the Hague.

Autoliv eyes sale

Autoliv announced plans on Wednesday to issue new senior long-term debt during the first quarter of 2014, according to an EX-99.1 filed with the SEC.

The debt will be issued in anticipation of the scheduled maturity of debt obligations.

The issuance amounts will be subject to market conditions and investor interest.

Autoliv is an automotive safety systems supplier based in Stockholm.

Fannie Mae passes

Fannie Mae announced that it will not use its Feb. 19 Benchmark Notes announcement date this month, according to an informed source.

The government-backed mortgage lender is based in Washington, D.C.

Time Warner Cable tightens

Time Warner Cable's 4.125% notes due 2021 traded better in the "low-mid 60s" bps area, a trader said on Wednesday.

The notes were quoted on Friday at 70 bps bid, in from the 215 bps area a week ago. The company's bonds tightened more than 100 bps on the announcement it will merge with Comcast in a $45.2 billion all-stock deal.

Time Warner Cable sold $700 million of the 4.125% notes due 2021 at 155 bps over Treasuries in 2010.

The broadband communications company is based in New York City.

Bank/brokerage CDS rise

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

Bank of America Corp.'s CDS costs eased 2 bps to 73 bps bid, 76 bps offered. Citigroup Inc.'s CDS costs eased 2 bps to 79 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs rose 2 bps to 64 bps bid, 67 bps offered. Wells Fargo & Co.'s CDS costs eased 1 bp to 39 bps bid, 42 bps offered.

Merrill Lynch's CDS costs rose 2 bps to 76 bps bid, 79 bps offered. Morgan Stanley's CDS costs eased 2 bps to 89 bps bid, 93 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 2 bps to 92 bps bid, 97 bps offered.

Paul Deckelman contributed to this review.

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