Western Gas, RPM bring deals; lower volume forecast; Time Warner Cable bonds tighten 60 bps

By Cristal Cody

Tupelo, Miss., May 26 – A small number of U.S. investment-grade corporate issuers took to the market on Tuesday following the long holiday weekend.

Western Gas Partners, LP priced $500 million of 3.95% 10-year senior notes at 98.789 to yield 4.099%.

RPM International Inc. brought a $250 million offering of 5.25% 30-year senior notes.

Issuance over the last week of May is expected to drop by more than half from the nearly $52 billion of investment-grade bonds priced in the previous week, according to market sources.

“We’re thinking about $15 billion,” one syndicate source said. “Last week was busy. This week should be active but not as busy.”

In the secondary market, Time Warner Cable Inc.’s bonds tightened as much as 60 basis points on the day. Charter Communications, Inc. announced before the market opened that it will acquire Time Warner Cable in a cash and stock deal valued at $78.7 billion.

The Markit CDX North American Investment Grade series 23 index was less than 1 bp softer at a spread of 64 bps on Tuesday.

Western Gas sells 10-year notes

Western Gas Partners (Baa3/BBB-BBB-) priced $500 million of 3.95% 10-year senior notes at 98.789 to yield 4.099% on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

The notes due June 1, 2025 priced with a spread of 195 bps plus Treasuries.

Morgan Stanley & Co. LLC, U.S. Bancorp Investments, Inc., Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., SG Americas Securities, LLC and UBS Securities LLC were the bookrunners.

Western Gas Partners plans to use the proceeds from the offering to repay a portion of debt outstanding under its revolving credit facility.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets in the United States.

RPM raises $250 million

RPM priced $250 million of 5.25% 30-year senior notes (Baa3//) on Tuesday, according to a company release.

The notes are due June 1, 2045.

BofA Merrill Lynch and Santander Investment Securities Inc. were the bookrunners.

Proceeds from the deal will be used to reduce debt under the company’s bank revolver.

RPM International is a Medina, Ohio-based company that manufactures and markets specialty chemical products for industrial and consumer markets.

Time Warner Cable tightens

Time Warner Cable’s 4.125% notes due 2021 tightened 60 bps to 220 bps by late afternoon trading following the acquisition announcement by Charter Communications, a market source said.

The bonds were quoted on Friday 13 bps wider at 280 bps bid.

Time Warner Cable (Baa2/BBB/BBB) sold $700 million of the 4.125% notes due 2021 in 2010 at a spread of 155 bps over Treasuries.

The broadband communications company is based in New York City.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices were mostly wider on Tuesday, according to a market source.

Bank of America Corp.’s CDS costs were 1 bp wider at 66 bps bid, 69 bps offered. Citigroup Inc.’s CDS costs eased 1 bp to 75 bps bid, 78 bps offered. JPMorgan Chase Bank, NA’s CDS costs were unchanged at 62 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs rose 2 bps to 45 bps bid, 49 bps offered.

Merrill Lynch’s CDS costs were 1 bp higher at 68 bps bid, 72 bps offered. Morgan Stanley’s CDS costs eased 2 bps to 78 bps bid, 82 bps offered. Goldman Sachs Group, Inc.’s CDS costs rose 1 bp to 84 bps bid, 88 bps offered.

Stephanie N. Rotondo contributed to this review.

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