W.W. Grainger, Scotiabank, Wisconsin Energy price; AT&T, Verizon bonds tighten; Oracle firms

By Aleesia Forni and Cristal Cody

Virginia Beach, June 4 – Bank of Nova Scotia, Wisconsin Energy Corp. and W.W. Grainger Inc. kept the primary market alive on Thursday.

The session hosted $6.55 billion of new investment-grade issuance, bringing the week’s total to more than $23 billion of supply.

W.W. Grainger attracted an order book that was more than 3.5 times oversubscribed for its new $1 billion offering.

Meanwhile, Wisconsin Energy sold a $1.2 billion three-part offering between 20 basis points to 25 bps tight of initial price thoughts.

Bank of Nova Scotia priced both tranches of its $1.35 billion fixed- and floating-rate three-year note on top of guidance.

Also during the session, Fannie Mae issued $3 billion of Benchmark Notes in line with price talk.

Credit spreads continued to widen on Thursday after easing 1 bp in the previous session.

The Markit CDX North American Investment Grade series 23 index closed 1 bp wider at a spread of 66 bps.

In the secondary market, AT&T Inc.’s bonds (/BBB+/A-) tightened 1 bp to 9 bps over the day.

Bonds from Verizon Communications Inc., which announced in May it will acquire AOL Inc. for $4.4 billion, tightened about 1 bp to 8 bps on Thursday.

Oracle Corp.’s senior notes (A1/AA-/A+) traded 3 bps to 5 bps better.

Apple Inc.’s bonds were mostly better, while the company’s tranche of 2.5% notes due 2025 eased 3 bps.

Scotiabank two-parter

The Bank of Nova Scotia was also in Thursday’s market with a $1.35 billion offering of three-year fixed- and floating-rate notes (Aa2/A+/AA-), according to a market source and an FWP filed with the Securities and Exchange Commission.

There was $850 million of 1.7% notes due 2018 priced at 99.953 to yield 1.716%, or Treasuries plus 70 bps.

A $500 million floating-rate note due 2018 sold at par to yield Libor plus 47 bps.

Both tranches sold on top of guidance.

Scotia Capital (USA) Inc., Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc. and UBS Securities LLC are the underwriters.

Proceeds will be added to the bank’s funds and will be used for general business purposes.

The financial services company is based in Toronto.

Wisconsin Energy three-parter

Wisconsin Energy priced $1.2 billion of senior notes (A3/BBB+/BBB+) in three tranches on Thursday, a market source said.

The sale included $300 million of 1.65% three-year notes priced at 99.944 to yield 1.669% with a spread of Treasuries plus 65 bps.

Pricing was at the tight end of the Treasuries plus 70 bps area guidance, tightened from initial talk in the Treasuries plus 90 bps area.

A $400 million tranche of 2.45% five-year notes sold at Treasuries plus 85 bps.

Pricing was at 99.817 to yield 2.489%.

Guidance was set in the Treasuries plus 90 bps area, having firmed from the 110 bps area over Treasuries talk.

Finally, $500 million of 3.55% 10-year notes priced at 99.983 to yield 3.552%, or Treasuries plus 125 bps.

The issue sold at the tight end of the Treasuries plus 130 bps area guidance. Initial talk was set in the Treasuries plus 145 bps area.

BofA Merrill Lynch, J.P. Morgan Securities LLC, BNP Paribas Securities Corp., KeyBanc Capital Markets and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to fund the acquisition of Integrys Energy Group Inc.

Wisconsin Energy is a gas and electric company based in Milwaukee.

W.W. Grainger 30-year bonds

W.W. Grainger priced $1 billion of 4.6% 30-year senior notes (A2/AA) on Thursday at Treasuries plus 155 bps, according to an FWP filed with the SEC.

Pricing was at 99.919 to yield 4.605%.

The notes sold at the tight end of guidance.

The bookrunners were Morgan Stanley & Co. LLC and JPMorgan.

Proceeds will be used for general corporate purposes, including the repurchase of shares of the company’s common stock and the repayment of about $300 million of debt.

The industrial supply company is based in Lake Forest, Ill.

Fannie Mae Benchmark Notes

Fannie Mae priced $3 billion of 1.125% Benchmark Notes due July 20, 2018 on Thursday at Treasuries plus 15 bps, according to a company news release.

The notes priced at 99.817 to yield 1.185%.

Pricing was in line with talk.

Citigroup Global Markets, JPMorgan and Nomura Securities International, Inc. are the joint lead managers.

By investor type, fund managers picked up 51%, commercial banks 20%, central banks 12%, state and local governments 5%, corporate and pensions 5% and retail 1%.

By region, 82% of orders came from the U.S., 8% came from Asia and 3% came from Europe.

The government-backed mortgage lender is based in Washington, D.C.

AT&T tightens

In the secondary market, AT&T’s 3.4% notes due 2025 firmed 7 bps to 161 bps offered, a market source said.

The company sold $5 billion of the notes on April 23 at a spread of Treasuries plus 150 bps.

AT&T’s 4.75% bonds due 2046 firmed 5 bps to 213 bps bid in late afternoon trading.

AT&T sold $3.5 billion of the bonds in the April 23 deal at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Verizon firms

Verizon’s 3.5% notes due 2024 tightened 8 bps to 136 bps bid in secondary trading, a source said.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at Treasuries plus 135 bps.

The telecommunications company is based in New York City.

Oracle improves

Oracle’s 2.95% notes due 2025 firmed 3 bps to 103 bps bid, according to a market source.

Oracle sold $2.5 billion of the notes on April 28 at Treasuries plus 100 bps.

The company’s 4.125% bonds due 2045 tightened 5 bps to 140 bps bid during the session.

Oracle sold $2 billion of the bonds at 145 bps plus Treasuries in the April 28 deal.

The computer software and technology company is based in Redwood City, Calif.

Apple eases

Apple’s 2.5% notes due 2025 eased 3 bps to 96 bps bid on Thursday, a market source said.

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

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

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