Thermo Fisher prices; Federal Realty, Retail Opportunity tap market, firm in trading

By Aleesia Forni

Virginia Beach, Dec. 4 - The high-grade bond market saw another solid session on Wednesday, with Thermo Fisher Scientific Inc., Federal Realty Investment Trust and Retail Opportunity Investments Partnership LP hitting the primary.

Thermo Fisher Scientific sold the day's largest deal, pricing $3.2 billion of senior notes in four parts on Wednesday.

The company priced $900 million of 1.3% notes due 2017 at Treasuries plus 75 basis points and $900 million of 2.4% notes due 2019 at 100 bps over Treasuries.

There was also a $1 billion tranche of 10-year notes sold at Treasuries plus 135 bps.

A $400 million tranche of 30-year bonds was priced at Treasuries plus 140 bps.

All four tranches were sold at the tight end of talk, which had tightened around 20 bps from initial guidance.

Meanwhile, Federal Realty Investment Trust came to market to price $300 million of 3.95% 10-year senior notes at Treasuries plus 123 bps.

In the secondary market, a trader saw the notes firm 3 bps near the end of the session.

Retail Opportunity Investments Partnership sold $250 million of 5% 10-year senior notes with a spread of Treasuries plus 237.5 bps on Wednesday.

A trader saw the notes around 4 bps tighter near the day's close.

In other market news, investment-grade bank and brokerage CDS costs rose on Wednesday.

With market conditions remaining strong, the pace of issuance is expected to continue in the session ahead.

Roughly $17.7 billion of supply has priced during the week. Sources had expected around $20 billion to $25 billion of new issuance.

A source predicted that Thursday's pace will "probably [be] a lot like today and yesterday" in terms of new deals.

"We're really seeing basically no signs of investor fatigue," another market source said late Wednesday.

Thermo Fisher's $3.2 billion

Thermo Fisher Scientific sold a $3.2 billion issue of senior notes (Baa3/BBB/BBB) in four parts on Wednesday, according to a market source.

The deal included $900 million of 1.3% notes due 2017 priced with a spread of Treasuries plus 75 bps, or 99.941, to yield 1.319%.

There was also $900 million of 2.4% notes due 2019 sold at 100 bps over Treasuries.

Pricing was at 99.796 to yield 2.442%.

A $1 billion tranche of 10-year notes was priced at 99.73 to yield 4.182%, or Treasuries plus 135 bps.

Finally, the company priced $400 million of 30-year bonds at Treasuries plus 140 bps.

The notes sold at 99.928 to yield 5.304%.

All four tranches sold at the tight end of talk.

Barclays, J.P. Morgan Securities LLC and RBS Securities Inc. were the joint bookrunners.

Proceeds will be used to fund and pay associated costs of the acquisition of Life Technologies Corp.

Thermo Fisher, a Waltham, Mass.-based science technology company, was last in the market with a $1.3 billion of 1.85% notes due 2018 priced at 105 bps over Treasuries and 3.15% notes due 2023 priced at Treasuries plus 140 bps.

Federal Realty prices tight

Federal Realty Investment Trust priced an upsized $300 million issue of 3.95% 10-year senior notes (A3/A-/A-) during Wednesday's session with a spread of Treasuries plus 123 bps, according to syndicate sources.

Pricing was at 99.018 to yield 4.069%

The notes priced at the tight end of talk.

In the secondary market, the notes were quoted by a trader at 120 bps bid.

Citigroup Global Markets Inc., JPMorgan and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to redeem outstanding 5.95% notes due 2014, to pay off an outstanding balance under a revolving credit facility and for general corporate purposes, including funding a potential acquisition or a redevelopment pipeline.

The real estate investment trust for retail and mixed-use buildings is based in Rockville, Md.

Retail Opportunity new issue

Retail Opportunity Investments Partnership sold a $250 million issue of 5% senior notes 2023 with a spread of Treasuries plus 237.5 bps on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa2/BBB-/) priced at 98.33 to yield 5.216%.

A trader quoted the notes at 233 bps bid, 230 bps offered.

The notes are fully and unconditionally guaranteed by Retail Opportunity Investments Corp.

JPMorgan, U.S. Bancorp Investments Inc. and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay and refinance debt, including borrowings under the company's $350 million unsecured revolving credit facility and its $200 million unsecured term loan, and for general corporate purposes.

San Diego-based Retail Opportunity is a self-managed real estate investment trust focusing on the acquisition, ownership and management of necessity-based community and neighborhood shopping centers that are anchored by national or regional supermarkets and drugstores.

Bank, broker CDS costs rise

Investment-grade bank and brokerage CDS prices rose on the day, according to a market source.

Bank of America Corp.'s CDS cpsts widened 1 bp to 83 bps bid, 87 bps offered. Citigroup Inc.'s CDS costs widened 1 bp to 80 bps bid, 84 bps offered. JPMorgan Chase & Co.'s CDS costs ended 2 bps wider at 73 bps bid, 77 bps offered. Wells Fargo & Co.'s CDS costs were 2 bps wider at 47 bps bid, 51 bps offered.

Merrill Lynch's CDS costs closed 1 bp wider at 85 bps bid, 89 bps offered. Morgan Stanley's CDS costs were 3 bps wider at 98 bps bid, 102 bps offered. Goldman Sachs Group Inc.'s CDS costs widened 1 bp to 101 bps bid, 105 bps offered.

Paul Deckelman contributed to this review.

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