SoCal Edison, Berkshire Hathaway, John Deere price; bank, financial paper mostly soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 13 – Southern California Edison Co., Berkshire Hathaway Finance Corp., John Deere Capital Corp. and Brixmor Operating Partnership LP brought new issues to the investment-grade bond market on Tuesday.

Southern California Edison sold $1.3 billion of notes in three parts during the session, attracting an orderbook that was nearly four times oversubscribed.

Also on Tuesday, Berkshire Hathaway Finance priced a $1 billion offering of senior notes in two tranches at the tight end of talk, while John Deere Capital priced $750 million of notes due 2018 in two parts.

Brixmor Operating Partnership and HCP Inc. were each in the market with new upsized bond offerings.

The session also saw KfW sell $3 billion of three-year notes and Toronto-Dominion Bank issue a $100 million add-on.

So far, this week has seen around $14.5 billion of new issuance, less than half of what was expected to be a $30 billion week.

High-grade bonds were mostly flat to weaker in secondary trading, according to market sources.

Morgan Stanley & Co. Inc.’s 3.875% notes due 2024 traded unchanged on the day.

Bank of America Corp.’s 4% notes due 2024 headed out more than 5 basis points weaker from Monday.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 eased 4 bps over the session.

JPMorgan Chase & Co.’s 3.625% senior notes due 2024 were quoted 10 bps wider.

Bonds in the telecommunications sector traded about 1 bp to 3 bps better over the day, a source said.

AT&T Inc.’s 3.9% notes due 2024 were quoted in 1 bp.

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 72 bps on Tuesday.

KfW sells $3 billion

KfW priced $3 billion of 1% three-year notes (Aaa/AAA/AAA) on Tuesday at mid-swaps minus 5 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Price talk was set in the area of mid-swaps minus 4 bps.

The notes priced at 99.828.

The bookrunners were HSBC Securities, Nomura and TD Securities.

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

SoCal Edison three-parter

Southern California Edison priced $1.3 billion of notes (Aa3/A/A+) in three tranches, according to a market source.

The sale included $550 million of 1.845% amortizing first and refunding mortgage bonds, series 2015A, due 2022 priced at par with a spread of Treasuries plus 97 bps.

A second tranche was $325 million of 2.4% first and refunding mortgage bonds, series 2015B, due 2022 priced at 99.993 to yield 2.401%. The notes sold with a spread of Treasuries plus 72 bps.

There was also a $425 million tranche of 3.6% first and refunding mortgage bonds, series 2015C, due 2045 sold with a spread of Treasuries plus 112 bps. Pricing was at 99.993 to yield 3.621%.

All three tranche sold at the tight end of talk.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays, UBS Securities LLC, MUFG, RBS Securities Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to finance fuel inventories.

The electric utility is based in Rosemead, Calif.

Berkshire prices tight

Berkshire Hathaway Finance sold a $1 billion offering of senior notes (A2/AA/) in two tranches on Tuesday, according to an informed source.

The company sold a $400 million tranche of two-year floaters at par to yield Libor plus 17 bps.

There was also a $600 million tranche of three-year floating-rate notes priced at par to yield Libor plus 30 bps.

Both tranches priced tighter than talk.

BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay the company’s $1 billion of 4.5% senior notes due January 2015. Any remaining proceeds will be used for general corporate purposes.

The notes will be guaranteed by Berkshire Hathaway Inc., the Omaha-based holding company for subsidiaries.

John Deere two-parter

John Deere Capital priced $750 million of medium-term notes, series F, (A2/A-/) due 2018 in two parts on Tuesday, according to a market source and two separate FWP filings with the SEC.

There was $250 million of floaters priced at par to yield Libor plus 29 bps.

A second tranche was $500 million of 1.35% notes due 2018 priced at 99.95 to yield 1.367%, or Treasuries plus 50 bps.

The bookrunners were Barclays, JPMorgan and MUFG.

Proceeds will be used for general corporate purposes.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

Brixmor upsizes

Brixmor Operating Partnership priced an upsized $700 million issue of 3.85% senior notes (Baa3/BBB-/BBB-) due 2025 on Tuesday with a spread of Treasuries plus 195 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.958 to yield 3.855%.

The issue was upsized from $500 million.

The bookrunners were Citigroup Global Markets, JPMorgan, Wells Fargo Securities, Barclays, BofA Merrill Lynch, Deutsche Bank Securities Inc. and RBC Capital Markets LLC.

Proceeds will be used to repay outstanding debt under the company’s $1.25 billion unsecured revolving credit facility.

Any remaining net proceeds will be used for general corporate purposes.

Brixmor Operating is a subsidiary of New York-based Brixmor Property Group Inc., an internally managed real estate investment trust that owns and operates a wholly owned portfolio of grocery-anchored community and neighborhood shopping centers.

HCP offering

HCP priced an upsized $600 million issue of 3.4% 10-year senior notes (Baa1/BBB+/BBB+) on Tuesday at Treasuries plus 160 bps, according to a market source and an FWP filed with the SEC.

The notes priced at 99.185 to yield 3.497%.

The issuer was originally expected to sell $500 million of notes.

Citigroup Global Markets, Credit Agricole CIB, Credit Suisse Securities (USA) LLC and RBS Securities were the joint bookrunners.

Proceeds will be used to repay the U.S. dollar portion outstanding under the company’s $2 billion revolving line of credit, to repay $200 million of 6% senior notes due March 2015, to repay $200 million of 7.072% senior notes due June 2015 and for general corporate purposes, including future acquisitions, investments or repayment of other debt.

The real estate investment trust for the health-care industry is based in Long Beach, Calif.

TD Bank add-on

Toronto-Dominion Bank priced a $100 million add-on to its existing floating-rate senior medium-term notes, series A, due Jan. 6, 2017 at par to yield Libor plus 26 bps on Tuesday, according to an FWP filed with the SEC.

The original $1.1 billion of floating-rate senior notes (Aa1/AA-/AA-) priced at par on Thursday.

TD Securities (USA) LLC and Citigroup Global Markets were the joint bookrunners.

Proceeds will be added to the company’s general funds and used for general corporate purposes.

The financial services and banking company is based in Toronto.

Bank of America softens

Bank of America’s 4% notes due 2024 (Baa2/A-/A) were quoted at 143 bps bid on Tuesday, wider than where the notes traded at 137 bps bid in the previous session, a source said.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at a spread of Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

Goldman eases

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded 4 bps weaker at 146 bps bid on Tuesday, a market source said.

Goldman Sachs brought a $2.25 billion offering of the notes on June 30, 2014 at Treasuries plus 135 bps.

The financial services company is based in New York City.

JPMorgan widens

JPMorgan’s 3.625% senior notes due 2024 (A3/A/A+) widened to 131 bps bid in Tuesday’s secondary market, a source said.

The notes were quoted at 121 bps bid on Monday.

JPMorgan sold $2 billion of the notes on May 6, 2014 at Treasuries plus 110 bps.

The financial services company is based in New York City.

Morgan Stanley flat

Morgan Stanley’s 3.875% notes due 2024 (Baa2/A-/A-) were seen unchanged at 148 bps bid in secondary trading, according to a market source.

Morgan Stanley sold $3 billion of the notes at a spread of Treasuries plus 130 bps on April 23, 2014.

The financial services company is based in New York City.

AT&T better

AT&T’s 3.9% notes due 2024 (A3/A-/A) firmed 1 bp to 139 bps bid, a market source said.

AT&T sold $1 billion of the notes on March 5, 2014 at 125 bps plus Treasuries.

The telecommunications company is based in Dallas.

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