Verizon, McDonalds, Goldcorp keep primary pace active; Verizon, Goldcorp firm in trading

By Cristal Cody and Aleesia Forni

Virginia Beach, June 4 - Verizon Communications Inc., McDonalds Corp. and Goldcorp Inc. were among the names bringing new deals to Wednesday's primary.

The two-part $3.3 billion deal from Verizon Communications was the highlight of the session, with the fixed-rate portion of the deal pricing around 10 basis points tighter than original guidance.

The deals from McDonalds and Goldcorp both priced tighter than guidance as well.

A pair of automotive names, American Honda Finance Corp. and Toyota Motor Credit Corp., brought billion-dollar floating-rate offerings due 2015 to the primary market.

Nederlandse Waterschapsbank NV was in Wednesday's market with two deals, pricing an add-on to its existing floaters due 2018 and setting talk for a planned 18-month offering of notes.

The primary also saw Commonwealth Bank of Australia and Southeast Supply Header LLC bring new deals.

Details of Southeast Supply's $400 million sale were not available at press time.

The session saw $9.1 billion of supply, bringing the week's total to roughly $29.5 billion, blowing away earlier estimates of around a $20 billion week.

However, with the market focused on Thursday's European Central Bank decision and Friday's nonfarm payrolls report, activity in the high-grade market could slow to close out the first full week of June.

In the secondary, high-grade bonds traded mostly unchanged to moderately better on the day, according to market sources.

The Markit CDX North American Investment Grade series 22 index was flat at a spread of 62 basis points.

In the secondary market, Verizon's 1.35% notes due 2017 tightened about 7 bps on the offered side going out the door, a trader said.

Goldcorp's 3.625% notes due 2021 tightened 4 bps in aftermarket trading, a trader said.

McDonald's 3.25% notes due 2024 traded 1 bp wider on the offered side in the secondary market, according to a trader.

Verizon sells $3.3 billion

Verizon Communications priced the largest sale of the session, bringing to market $3.3 billion of senior notes in fixed- and floating-rate tranches due 2017.

The sale included $1.3 billion of floaters priced at to yield Libor plus 40 bps and $2 billion of 1.35% three-year notes at 99.95 to yield 1.356%, or Treasuries plus 53 bps.

The fixed-rate tranche sold about 10 bps tighter than initial guidance, which was set in the low-60 bps area before tightening to price talk in the area of 55 bps over Treasuries.

The floating-rate notes were talked in the area of 42 bps over Libor.

Verizon's 1.35% notes due 2017 tightened to 46 bps offered in the secondary market, a trader said.

The floating-rate notes were not seen in late day trading.

Barclays, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the joint bookrunners.

Proceeds will be used to repay borrowings under the company's three-year tranche of its term loan credit agreement and for general corporate purposes.

Verizon is a New York City-based telecommunications company.

CBA covered bond

Commonwealth Bank of Australia came to market with a $1.25 billion five-year covered bond on Wednesday.

The $2 billion of five-year bonds priced at 99.58 to yield 2.09% via Rule 144A and Regulation S.

Barclays, Citigroup Global Markets Inc., RBC Capital Markets LLC and Commonwealth Bank of Australia were the bookrunners.

Commonwealth Bank of Australia is a Sydney-based banking and financial services company.

Goldcorp's two-parter

Also on Wednesday, Goldcorp sold $1 billion of senior notes in seven- and 30-year tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $550 million tranche of 3.625% notes due 2021 sold with a spread of Treasuries plus 145 bps, or 99.871 to yield 3.625%.

Goldcorp also priced a $450 million tranche of 5.45% 30-year bonds at 99.517 to yield 4.483%, or Treasuries plus 205 bps.

In the secondary market, Goldcorp's 3.625% notes due 2021 firmed to 141 bps bid, 137 bps offered, according to a trader.

The 30-year bonds were not seen in aftermarket trading.

The bookrunners were CIBC World Markets Corp., Scotia Capital (USA) Inc., RBC Capital Markets, LLC, HSBC Securities and Morgan Stanley & Co. LLC.

Proceeds will be used to repay the company's $862.5 million of convertible notes maturing in August 2014, to reduce debt under its revolving credit facility and for capital expenditures, capital investment or working capital.

The gold producer is based in Vancouver, B.C.

McDonalds prices tight

McDonalds was in the market on Wednesday with a $500 million sale of 3.25% 10-year senior notes (A2/A/A) priced at Treasuries plus 67 bps, according to a syndicate source and an FWP filed with the Securities and Exchange Commission.

Pricing was at the tight end of talk, which had firmed 5 bps to 10 bps from earlier guidance.

The notes sold at 99.72 to yield 3.283%. There is a make-whole call at Treasuries plus 10 bps.

The new notes eased to 68 bps offered in secondary trading, a trader said.

Morgan Stanley & Co. LLC, RBS Securities Inc., Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the bookrunners.

The fast food chain is based in Oak Brook, Ill.

Toyota, Honda price floaters

American Honda Finance and Toyota Motor Credit sold floating-rate issues of one-year senior notes on Wednesday.

American Honda sold $1 billion of its floaters June 4, 2015 at par to yield Libor flat.

The notes sold at the tight end of talk, which was set in the area of 1 bp over Libor.

Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, RBS Securities Inc. and SMBC Nikko Securities America Inc. were the joint bookrunners.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Meanwhile, Toyota Motor also priced an issue of floating-rate notes at par to yield Libor flat.

The $1.25 billion of issue floating-rate notes (Aa3/AA-/) will mature on June 10, 2015.

BofA Merrill Lynch, Citigroup Global Markets Inc., CastleOak Securities LP and Toyota Financial Services Securities were the agents.

The U.S. funding arm of Toyota is based in Torrance, Calif.

Waterschapsbank launches two deals

Nederlandse Waterschapsbank was in the market with two separate deals on Wednesday.

The financial services company sold a $400 million tap of its existing floating-rate notes (Aaa/AA+/) due Feb. 14, 2018 in line with guidance, yielding Libor plus 13 bps.

The notes carry a coupon of Libor plus 23 bps, and the deal's total size now sits at $1.2 billion.

BofA Merrill Lynch, Daiwa Securities and Deutsche Bank Securities Inc. were the joint bookrunners for the Rule 144A and Regulation S deal.

Waterschapsbank also announced plans to price $1 billion of notes due 2015 (Aaa/AA+/), setting talk for the planned deal in the mid-swaps plus 2 bps area.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and TD Securities are the joint bookrunners for the Netherlands-based company's sale.

Bank/brokerage CDS costs flat to lower

Investment-grade bank and brokerage CDS prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs remained flat at 66 bps bid, 69 bps offered. Citigroup Inc.'s CDS costs declined 1 bp to 66 bps bid, 69 bps offered. JPMorgan Chase & Co.'s CDS costs closed flat at 54 bps bid, 57 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 34 bps bid, 37 bps offered.

Merrill Lynch's CDS costs were flat at 70 bps bid, 74 bps offered. Morgan Stanley's CDS costs ended flat at 69 bps bid, 72 bps offered. Goldman Sachs Group, Inc.'s CDS costs were declined 1 bp to 77 bps bid, 80 bps offered.

Stephanie Rotondo contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.