Schlumberger, Advance Auto Parts, Duke Realty tap market; new issues tighten in trade

By Cristal Cody

Tupelo, Miss., Nov. 25 - Investment-grade corporate issuers hit the market on Monday to price early in the shortened holiday week, market sources said.

"It was good today," one syndicate source said. "Everybody's getting in before Thanksgiving."

Primary activity on Tuesday is expected to be light with the pipeline dying down on Wednesday, sources said.

The bond markets will be closed on Thursday and will close early on Friday.

Schlumberger Investment SA on Monday brought a $1.5 billion private placement offering of 3.65% 10-year senior notes, which priced with a spread of 95 basis points plus Treasuries.

Schlumberger Investment's 3.65% notes due 2023 tightened about 7 bps in the secondary market late in the day, a trader said.

Advance Auto Parts, Inc. sold $450 million of 4.5% 10-year notes at 99.69 to yield 4.539%, according to a Securities and Exchange Commission filing.

Advance Auto's 4.5% notes due 2023 tightened 3 bps in aftermarket trading.

Duke Realty Ltd. Partnership tapped the market in a $250 million long seven-year offering of 3.875% senior notes on Monday. The notes priced with a spread of Treasuries plus 185 bps.

In secondary trading, Duke Realty's 3.875% senior notes due 2021 tightened 3 bps as the session headed toward the close, a trader said.

Schlumberger's $1.5 billion

Schlumberger Investment (A1//) priced $1.5 billion of 3.65% 10-year senior notes at 99.66 to yield 3.691% on Monday in a private placement offering, according to an informed source.

The notes, which are due Dec. 1, 2023, priced with a spread of 95 bps plus Treasuries.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the joint bookrunners.

The issue is fully and unconditionally guaranteed by parent company Schlumberger Ltd.

Proceeds will be used for general corporate purposes of the Schlumberger group.

Schlumberger Investment's 3.65% notes tightened in the secondary market to 88 bps bid, 85 bps offered, a trader said.

Houston-based Schlumberger Ltd. supplies technology, integrated project management and information solutions to customers in the oil and gas industries.

Advance Auto's $450 million

Advance Auto Parts (Baa3/BBB-/) sold $450 million of 4.5% 10-year notes at 99.69 to yield 4.539% on Monday, according to an FWP filing with the SEC.

The notes, due Dec. 1, 2023, priced with a spread of 180 bps plus Treasuries.

JPMorgan, BofA Merrill Lynch, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC were the joint bookrunners.

The notes initially will be guaranteed on a senior basis by certain domestic subsidiaries of the company.

The issue includes a 101% change-of-control put.

The issue has a make-whole call of Treasuries plus 30 bps if the notes are redeemed before Sept. 1, 2023.

Advance Auto Parts plans to use the proceeds to help finance its $2.1 billion cash and debt acquisition of General Parts International, Inc. The merger is scheduled to be completed in 2014.

In the secondary market, Advance Auto's notes traded tighter at 177 bps bid, 174 bps offered, a trader said.

Advance Auto Parts is an automotive aftermarket parts and accessories retailer based in Roanoke, Va.

Duke Realty sells $250 million

Duke Realty sold $250 million of 3.875% senior notes due Feb. 15, 2021 at 99.747 to yield 3.914% on Monday, according to an FWP filing with the SEC and an informed source.

The notes (Baa2/BBB-) priced with a spread of Treasuries plus 185 bps.

JPMorgan, RBC Capital Markets, LLC and Wells Fargo Securities were the joint bookrunners.

The issue includes a make-whole call at 30 bps plus Treasuries prior to Dec. 15, 2020. On or after Dec. 20, 2020, the notes will not include a make-whole amount.

Proceeds, together with cash on hand, will be used to redeem all $250 million outstanding of the company's 5.4% senior notes due Aug. 15, 2014.

In the secondary market, Duke Realty's notes tightened to 182 bps bid, a trader said.

The company is an affiliate of Indianapolis-based real estate investment trust Duke Realty Corp.

Bank/brokerage CDS costs down

Investment-grade bank and brokerage CDS prices declined on Monday, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 83 bps bid, 87 bps offered. Citigroup Inc.'s CDS costs tightened 3 bps to 78 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs declined 2 bps to 71 bps bid, 75 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 45 bps bid, 49 bps offered.

Merrill Lynch's CDS costs tightened 2 bps to 83 bps bid, 88 bps offered. Morgan Stanley's CDS costs declined 3 bps to 96 bps bid, 100 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 2 bps to 99 bps bid, 103 bps offered.

Paul Deckelman contributed to this review.

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