MetLife, Discover, American Airlines price; Actavis jumbo bond on deck; Discover, MetLife firm

By Aleesia Forni and Cristal Cody

Virginia Beach, March 2 – MetLife Inc., Discover Financial Services and American Airlines, Inc. sold new bonds on Monday, while Actavis plc announced plans to price a megadeal later this week.

Actavis set price talk for what sources expect to be around a $20 billion offering in order to fund its acquisition of Allergan Inc.

The deal’s size would make it the second-largest bond deal ever, coming in behind Verizon Communications Inc.’s $49 billion offering, which priced in eight tranches on Sept. 11, 2013.

Orders poured into the pharmaceutical company’s planned new offering, which attracted a book that was more than $80 billion, according to a market source.

In new issue happenings on Monday, Discover Financial priced a $500 million offering of 10-year notes around 15 basis points tight of the mid-point of initial price talk.

American Airlines sold roughly $1.2 billion of pass-through certificates during the session, while MetLife Inc. issued $1.5 billion of senior notes in two tranches at the tight end of guidance.

Also on Monday, Germany’s KfW set talk for a planned 18-month offering of notes that is expected to price later during the week.

Investment-grade bonds were mixed in the secondary market, sources said.

Discover Financial’s 3.75% notes due 2025 tightened 3 bps in aftermarket trading.

MetLife’s two-part offering of senior notes traded about 2 bps better in the secondary market.

Apple Inc.’s 2.5% senior notes due 2025 eased 2 bps.

The Markit CDX North American Investment Grade index headed out less than 1 bp tighter at a spread of 61 bps.

Actavis eyes $20 billion deal

Actavis is in the market with a nine-part offering of senior notes (Baa3/BBB-/BBB-), according to market sources and a 424B5 filed with the Securities and Exchange Commission.

The deal’s size is expected to be around $20 billion.

The sale includes 18-month floating-rate notes talked in the 100 bps area over Treasuries and two-year notes talked at 135 bps to 140 bps over Treasuries.

A three-year tranche of notes is talked at 145 bps to 150 bps over Treasuries, and a three-year floater is talked at the Libor equivalent.

There is also a five-year note talked at Treasuries plus 160 bps to 165 bps, and a seven-year note talked at Treasuries plus 180 bps to 185 bps.

The company is talking a 10-year note in the 200 bps area over Treasuries, a 20-year note at the Treasuries plus 220 bps area and a 30-year note in the area of 240 bps over Treasuries.

The deal is expected to price on Tuesday.

The notes are guaranteed by Warner Chilcott Ltd., Actavis Capital Sarl and Actavis, Inc.

J.P. Morgan Securities LLC, Mizuho Securities (USA) Inc. and Wells Fargo Securities LLC are the bookrunners

Proceeds will be used to support its acquisition of Allergan.

Actavis is a pharmaceutical company with headquarters in Dublin. Irvine, Calif.-based Allergan is a multi-specialty health-care company.

MetLife new issue

MetLife Inc. priced $1.5 billion of senior notes (A3/A-/A-) in tranches due 2025 and 2045 on Monday, according to a market source.

There was $500 million of 3% 10-year notes priced at 99.428 to yield 3.067%, or Treasuries plus 98 bps.

The notes sold at the tight end of the 100 bps area price guidance, which firmed from initial price thoughts set in the low-100 bps area.

A second tranche was $1 billion of 4.05% 30-year bonds priced at 99.501 to yield 4.079%, or Treasuries plus 140 bps.

Pricing was at the tight end of the 140 bps to 145 bps guidance. Initial price talk was set at Treasuries plus 150 bps to 155 bps.

The bookrunners were Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Proceeds will be used for general corporate purposes, including the repayment of $1 billion of 5% senior notes due June 15, 2015.

MetLife’s 3% notes due 2025 firmed to 96 bps bid in the secondary market, a trader said.

The tranche of 4.05% bonds due 2045 tightened to 138 bps bid, 135 bps offered in afternoon trading.

The insurance and employee benefits company is based in New York City.

American pass-throughs

American Airlines priced a $1,213,824,000 issue of class A and class B pass-through certificates, series 2015-1, on Monday, a market source said.

The deal included $947,778,000 of 3.375% class A certificates (/A/A) with a final expected regular distribution date of May 1, 2027 priced at par.

There was also $266,046,000 of 3.7% class B certificates (/BBB/BBB) with a final expected regular distribution date of May 1, 2023 priced at par.

Credit Suisse Securities and Deutsche Bank Securities were the joint structuring agents and lead bookrunners.

Citigroup Global Markets Inc., Goldman Sachs & Co., Morgan Stanley & Co. LLC, BofA Merrill Lynch, Barclays, JPMorgan, BNP Paribas Securities Corp. and Credit Agricole Securities were the joint bookrunners.

Proceeds will be used to acquire equipment notes that will be issued to finance the purchase of eight Airbus A319-112 aircraft delivered new to American from July 2013 to February 2015, five Boeing 737-823 aircraft either delivered new to American from September 2009 to February 2015 or newly manufactured and scheduled for delivery to American in March 2015, one Boeing 787-8 aircraft either delivered new to American in January 2015 or newly manufactured and scheduled for delivery to American from March 2015 to May 2015, five Boeing 777-323ER aircraft delivered new to American from April 2014 to February 2015 and nine Embraer ERJ 175 LR aircraft newly manufactured and scheduled for delivery to American from July 2015 to September 2015.

The commercial airline, which is a subsidiary of AMR Corp., is based in Fort Worth.

Discover prices tight

Discover Financial priced $500 million of 3.75% senior notes (Ba1/BBB-/BBB+) due 2025 on Monday with a spread of Treasuries plus 170 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.884 to yield 3.764%.

The notes sold at the tight end of guidance set in the 175 bps area, which firmed from initial price talk in the 185 bps area over Treasuries.

The bookrunners were Barclays, Credit Suisse Securities and Deutsche Bank Securities.

Proceeds will be used for general corporate purposes.

Discover Financial’s 3.75% notes due 2025 tightened to 167 bps bid in aftermarket trading, a trader said.

Discover is a Riverwoods, Ill.-based direct banking and payment services company.

KfW talk

KfW (Aaa/AAA/) set price talk for a planned offering of 18-month notes on Monday in the area of mid-swaps minus 12 bps, according to a market source.

The bookrunners are Goldman Sachs and Morgan Stanley.

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

Apple eases

Apple’s 2.5% notes due 2025 traded 2 bps softer at 73 bps bid, a market source said.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at a spread of Treasuries plus 85 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

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