Time Warner, BB&T, CenterPoint continue flow of deals; National Retail tightens in trading

By Aleesia Forni and Andrea Heisinger

New York, Aug. 7 - Issuance was toned down on Tuesday, but there were several deals in the bond market, including those from BB&T Corp., Time Warner Cable Inc. and CenterPoint Energy Houston Electric LLC.

Time Warner priced $1.25 billion of 30-year bonds for purposes that include debt repayment. The sale was sold tight to guidance and saw sizeable investor demand.

BB&T was in the market with a $750 million deal of five-year notes after the trade was upsized from $500 million.

The day's only multi-tranche sale came from CenterPoint, which priced $800 million of general mortgage bonds due 2022 and 2042.

Georgia Power Co. was the first of the day's deals to price. The utility sold $400 million of three-year notes after the deal was upsized from $350 million.

National Retail Properties, Inc. sold $325 million of 10-year senior notes. The deal size was increased from $250 million.

Global information technology company Ingram Micro Inc. sold $300 million of 10-year notes.

In the preferred stock market, there was a $200 million deal of cumulative redeemable shares from SL Green Realty. The size was doubled from $100 million.

Despite a healthy number of deals that have already priced in the high-grade market this week, more is expected on Wednesday due to a lack of adverse market conditions and the continuation of low borrowing rates.

"We could have a couple of big deals," said one source who worked on two of Tuesday's deals. "None of these $500 million utility deals."

The source later said that "everyone's dying to get in" and Wednesday's session "should be a good one."

A syndicate source who helped on the Time Warner sale was a little more cautious about the coming day's calendar and said: "There are a couple that will look." But he added that it does look busy.

In secondary trading, the new issue from National Retail Properties tightened 7 bps, while Time Warner's 30-years were seen 2 bps tighter.

The Markit CDX Series 18 North American Investment Grade index was unchanged at a spread of 103 bps.

Time Warner long bonds

Time Warner Cable sold $1.25 billion of 4.5% 30-year senior debentures (Baa2/BBB/BBB) to yield 183 bps over Treasuries, an informed source said.

The bonds were priced better than whispered talk in the 195 bps area and at the tight end of revised guidance in the 185 bps area, plus or minus 2 bps, the source said.

The new bonds were trading at 181 bps bid, 179 bps offered near the end of the session, a market source said.

There was substantial demand for the deal, with books totaling about $5.25 billion, the source added.

BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were active bookrunners.

Proceeds are being used for general corporate purposes, including debt repayment.

The deal is guaranteed by Time Warner Entertainment Co. LP and TW NY Cable Holding Inc.

Time Warner Cable was last in the market with a $2.25 billion offering in two maturities on Sept. 7, 2011. The 5.5% 30-year notes from that deal were sold at 232 bps over Treasuries.

The entertainment company is based in New York City.

CenterPoint sells two-parter

CenterPoint Energy Houston Electric sold $800 million of general mortgage bonds in two maturities, a source close to the trade said.

There was about $3.5 billion of demand on the books for the entire deal, with about $1.6 billion on the books for the 10-year notes and $1.9 billion for the 30-year bonds.

A $300 million tranche of 2.25% series V 10-year notes priced at a spread of Treasuries plus 65 bps. The tranche was priced at the low end of guidance in the range of 65 bps to 70 bps.

There was a $500 million tranche of 3.55% series W 30-year bonds sold at a spread of 85 bps over Treasuries. The bonds sold at the tight end of talk in the 85 bps to 90 bps range.

Bookrunners for the 10-year notes were RBS Securities Inc., Barclays, Deutsche Bank Securities Inc. and UBS Securities LLC. Those for the 30-year bonds were J.P. Morgan Securities LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC.

Proceeds are being used to fund a portion of the purchase price of bonds due 2014.

Centerpoint was last in the market with a $500 million deal of five-year notes on Jan. 6, 2009.

The electric utility is based in Houston.

BB&T's $750 million

BB&T priced $750 million of 1.6% five-year series C medium-term senior notes (A2/A-/A+) at a spread of Treasuries plus 93 bps, a market source said.

The deal size was increased from $500 million.

BB&T Capital Markets, Deutsche Bank Securities Inc. and UBS Securities LLC ran the books.

Proceeds are being used for general corporate purposes.

The bank and financial services company is based in Winston-Salem, N.C.

National Retail's 10-years

National Retail Properties sold $325 million of 3.8% 10-year senior notes (Baa2/BBB/BBB) to yield Treasuries plus 235 bps, a source who worked on the trade said.

The notes were quoted at 228 bps bid, 220 bps offered late in the session, after a trader saw them at 230 bps offered in the gray market.

The size of the sale was increased from $250 million, the source added. The deal was sold at the tight end of talk in the 240 bps area, plus or minus 5 bps.

The trade saw about $1.7 billion in demand from investors.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay borrowings under a credit facility, fund future property acquisitions and for general corporate purposes.

National Retail was last in the market with a $300 million offering of 5.5% 10-year notes priced at 265 bps over Treasuries on June 28, 2011.

The real estate investment trust for retail tenants is based in Orlando.

Georgia Power upsizes

Georgia Power did a quick sale of $400 million of 0.75% three-year senior notes (A3/A/A+) to yield Treasuries plus 42 bps, according to an FWP with the Securities and Exchange Commission.

The deal size was increased from $350 million and was sold at the low end of guidance in the 45 bps area, a source said.

The notes traded at 35 bps offered late in the day, a trader said.

Bank of America Merrill Lynch and Goldman Sachs & Co. were bookrunners.

Proceeds are being used for the proposed redemption of all or a portion of $250 million in 6% senior insured monthly notes due Sept. 1, 2040 and for general corporate purposes including a continuous construction program.

The electric utility and subsidiary of Southern Co. is based in Atlanta.

Ingram sells $300 million

Ingram Micro sold $300 million of 5% 10-year notes (Baa3/BBB-/BBB-) to yield Treasuries plus 345 bps, a market source said.

Morgan Stanley & Co. LLC and RBS Securities Inc. were bookrunners.

Proceeds are being used for general corporate purposes, including funding a portion of the acquisition of BrightPoint Inc. worth $840 million.

There is a mandatory call at 101 if the merger is terminated or not completed on or prior to April 30, 2013.

Ingram was last in the market with a $300 million deal of 5.25% seven-year notes priced at 326.7 bps over Treasuries on Aug. 16, 2010.

The global information technology wholesale distributor is based in Santa Ana, Calif.

SL Green's preferreds

SL Green Realty priced an upsized $200 million offering of 6.5% series I cumulative redeemable perpetual preferred shares, a trader said.

The deal was expected to be $100 million. The preferreds (Ba2/B+/BB-) priced at the low end of talk.

A trader said the deal was "going to do quite well. Retail seems to be snapping it right up."

The trader saw the issue trading at $24.65 in the gray market ahead of pricing.

SL Green will apply to list the new series of preferreds on the New York Stock Exchange under the symbol "SLGPI."

Wells Fargo Securities LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc. and UBS Securities LLC were bookrunners.

Proceeds will be contributed to the operating partnership in exchange for an equal number of series I cumulative redeemable preferred units. The operating partnership will use all or a portion of the net proceeds received by it to pay the redemption price and other amounts due upon its expected redemption of all or a portion of outstanding series C preferred stock, although no action has been taken and the company is under no obligation to do so. Any remaining proceeds may be used to repay outstanding indebtedness and for general corporate purposes.

SL Green is a New York-based real estate investment trust.

Prudential a big hit

Prudential Financial Inc.'s newly priced $1 billion of 5.875% $1,000-par fixed-to-floating junior subordinated notes due Sept. 15, 2042 was trading north of par just one day after pricing.

A trader saw the issue at 102 offered at midday.

"That did well," the trader said. "Prudential's always a very good name."

"That thing took off this morning like crazy," another market source said. Right out of the gate, the notes were trading higher than they were Monday. The paper eventually hit highs around 104, before easing back to end in a 101-102 context.

The source said the volume-weighted average price was around 102.

"$1,000-pars are more likely to perform well as a general rule," the source said about the securities' performance. On top of that, there remains a "big search for yield from investors."

The notes have a fixed rate of 5.875% until Sept. 15, 2022, at which point the rate will reset to Libor plus 417.5 bps.

Proceeds will be used for general corporate purposes and to redeem outstanding retail medium-term notes, including those under the InterNotes program.

Prudential is a Newark, N.J.-based financial services company.

Bank of America widens

In the secondary market, Bank of America's 7.375% five-year notes firmed 15bps to 188 bps bid.

The bank priced $3 billion notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

Nova Scotia tightens

Also in the secondary, Bank of Nova Scotia's 1.85% notes due 2015 tightened 4 bps on Tuesday to 52 bps bid.

The bank priced the $1 billion issue at 147 bps over Treasuries in January.

Citi widens

In other trading, Citigroup's 8.5% 10-year notes widened 18 bps to 226 bps bid.

The bank priced $1 billion notes due 2019 at Treasuries plus 437.5 bps on June 11, 2009.

Stephanie N. Rotondo contributed to this review

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