Time Warner, Home Depot, ABN Amro price; Time Warner Cable continues to firm

By Aleesia Forni and Cristal Cody

Virginia Beach, May 28 – Time Warner Inc., Home Depot Inc., ABN Amro Bank NV, Norfolk Southern Corp. and Comerica Bank were among the names continuing the steady stream of issuance the primary market has seen this week, bringing more than $11.1 billion of supply to the market on Thursday.

The activity pushes the week’s total to $19 billion of new issuance for the holiday-shortened week.

Time Warner sold both tranches of a new $2.5 billion bond around 10 basis points tight of initial price thoughts.

Home Depot was also in the market with a $2.1 billion new issue, while ABN Amro Bank priced $1.5 billion of senior notes in two parts.

Norfolk Southern upsized its new issue to $500 million from initial size thoughts of $400 million. The deal garnered an order book that was more than two times oversubscribed.

Meanwhile, Comerica priced a new $500 million issue of five-year notes.

The primary market also hosted a new deal from Freddie Mac – a $4 billion Reference Note priced in line with guidance.

Investment-grade credit spreads leaked wider on Thursday, sources said.

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 64 bps.

Time Warner’s existing notes traded mostly unchanged over the day.

In other trading, Time Warner Cable Inc.’s bonds continued to tighten during the session. Charter Communications, Inc. announced on Tuesday it will acquire Time Warner Cable for $78.7 billion in cash and stock.

Time Warner two-parter

Time Warner priced a $2.5 billion bond offering (Baa2/BBB) in two tranches on Thursday, according to an informed source.

The sale included $1.5 billion of 3.6% 10-year senior notes priced at 99.76 to yield 3.628%, or Treasuries plus 150 bps.

Price guidance was set in the range of Treasuries plus 150 bps to 155 bps, tightened from initial talk set in the 160 bps area over Treasuries.

There was also $600 million of 4.85% 30-year debentures priced at 99.929 to yield 4.854%, or Treasuries plus 195 bps.

The issue sold at the tight end of guidance set in the range of Treasuries plus 195 bps to 200 bps. Initial talk was in the Treasuries plus 200 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunners.

The notes are guaranteed by Historic TW Inc., and Home Box Office, Inc. and Turner Broadcasting System, Inc. will guarantee Historic TW’s guarantee of the issue.

Proceeds will be used for general corporate purposes, including share repurchases and the retirement of the company’s outstanding 3.15% notes due 2015.

The media company is based in New York.

Home Depot two-parter

In other primary news on Thursday, Home Depot priced a $2.5 billion two-part offering of senior notes (A2/A/A), according to an informed source and an FWP filing with the Securities and Exchange Commission.

The issuer priced $1.25 billion of 2.625% notes due June 1, 2022 with a spread of Treasuries plus 80 bps.

Pricing was at 99.632 to yield 2.683%.

A second tranche was $1.25 billion of 4.25% notes due April 1, 2046 priced at 99.749 to yield 4.265%, or Treasuries plus 135 bps.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, including repurchasing shares of its common stock.

Home Depot is an Atlanta-based home improvement retailer.

ABN Amro offering

ABN Amro Bank sold $1.5 billion of senior notes (A3/A/A) in two tranches on Thursday, according to an informed source.

A $500 million 1.8% three-year note priced at 99.939 to yield 1.821%, or Treasuries plus 87.5 bps.

A $1 billion issue of 2.45% five-year notes priced at 99.78 to yield 2.497% with a spread of 100 bps over Treasuries.

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

BofA Merrill Lynch, Barclays, Citigroup Global Markets, JPMorgan and Morgan Stanley were the bookrunners.

The bank and financial services company is based in Amsterdam.

Norfolk Southern upsizes

Meanwhile, Norfolk Southern priced an upsized $500 million offering of 30-year senior notes (Baa1/BBB+/) on Thursday at Treasuries plus 155 bps, according to an FWP filing with the SEC.

The offering was upsized from $400 million.

Pricing was at 99.768 to yield 4.464%.

The notes priced at the tight end of guidance set in the Treasuries plus 160 bps area, which had firmed from initial talk set in the 165 bps area over Treasuries.

BofA Merrill Lynch, JPMorgan and Morgan Stanley are the joint bookrunners.

The company plans to use the proceeds for general corporate purposes.

Norfolk Southern is a railroad operator based in Norfolk, Va.

Comerica bank notes

Comerica priced $500 million of 2.5% senior bank notes (A3/A/A) due June 2, 2020 on Thursday with a spread of Treasuries plus 100 bps, according to a market source.

The notes sold at the tight end of price talk.

Deutsche Bank Securities Inc. and JPMorgan were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The financial services company is based in Dallas.

Freddie Mac Reference Notes

Also on Thursday, Freddie Mac priced $4 billion of 0.75% Reference Notes due July 14, 2017 at Treasuries plus 13.5 bps, according to a company news release.

Pricing was in line with talk.

The notes sold at 99.922 to yield 0.787%.

Barclays, TD Securities and Nomura are the lead managers.

The government-backed mortgage lender is based in McLean, Va.

Time Warner mostly flat

Time Warner’s existing 2.1% notes due 2019 were flat at 54 bps bid in the secondary market, a source said.

Time Warner sold $650 million of the five-year notes at Treasuries plus 60 bps on May 20, 2014.

The company’s existing 3.55% notes due 2024 eased 1 bp to 124 bps bid.

Time Warner sold $750 million of the notes at Treasuries plus 105 bps in the May 20, 2014 offering.

The media and entertainment company is based in New York.

Time Warner Cable tightens

Time Warner Cable’s 4.125% notes due 2021 headed out on Thursday better at 212 bps bid, a market source said.

The notes traded on Wednesday at 220 bps bid.

The bonds were quoted before the merger acquisition announcement 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.

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