Celgene, Ford, United Airlines sales bring primary back to life; financials, new issues firm

By Cristal Cody and Aleesia Forni

Tupelo, Miss., Aug. 1 - Celgene Corp., Ford Motor Credit Co. LLC and United Airlines, Inc. were included among the flow of deals in the primary market on Thursday, as market activity picked up following Wednesday's statement from the Federal Open Market Committee.

Celgene priced a total of $1.5 billion of new bonds in a three-part offering during Thursday's session, according to a syndicate source.

The book size for the biopharmaceutical company's new deal reached more than $8 billion, he added.

Split-rated issuer Ford Motor Credit priced $1 billion of 10-year senior notes at Treasuries plus 178 basis points.

Meanwhile, United Airlines sold $929,351,000 of class A and class B series 2013-1 pass-through certificates.

The session also saw a high-grade new issue in the emerging markets sector from Turkey's Mersin Uluslararasi Liman Isletmeciligi AS (Mersin International Port).

The company priced $450 million of 5.875% seven-year notes during the session.

New issues see demand

Secondary trading in investment-grade bonds saw more action on Thursday than earlier in the week, according to market sources.

New issues from Celgene and Ford ended the day tighter.

Celgene's notes due 2023 firmed 6 bps to 134 bps bid, 130 bps offered from where it priced at a spread of 140 bps plus Treasuries, a trader said.

The company's tranche of bonds due 2043 tightened 7 bps from issuance to 153 bps bid, 150 bps offered.

The five-year tranche was not seen in the secondary market late afternoon.

Ford's notes went out tighter at 172 bps bid, 169 bps offered, according to a trader.

Financial paper firmed 2 bps to 7 bps, while investment-grade bonds in general traded 2 bps to 5 bps better on the day.

"It's a mixed bag," one trader said of the day's gains in investment-grade paper.

The Markit CDX Series 20 North American Investment Grade index decreased 1 bps to a spread of 74 bps.

Celgene prices tight

Celgene sold $1.5 billion of senior unsecured notes in three tranches on Thursday, according to a syndicate source.

The company sold $400 million of 2.3% notes due 2018 at 85 bps over Treasuries, or 99.792, to yield 2.34%. The notes were talked in the area of Treasuries plus 90 bps.

A $700 million tranche of 4% 10-year notes priced at 135 bps over Treasuries.

Price talk was set in the area of Treasuries plus 140 bps.

The notes priced at 99.452 to yield 4.06%.

Finally, a $400 million issue of 5.25% notes due 2043 was sold at Treasuries plus 155 bps, or 99.147, to yield 5.03%.

The notes were talked in the area of Treasuries plus 160 bps.

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

The company plans to use the proceeds for general corporate purposes, which may include further development of its clinical and pre-clinical programs, capital expenditures, general corporate development activities, working capital needs, share repurchases of its common stock and repayment of some or all of its outstanding commercial paper.

Celgene is a Summit, N.J.-based biopharmaceutical company.

Ford sells senior notes

Ford Motor Credit also hit Thursday's primary with a $1 billion issue of 4.375% 10-year senior notes at a spread of 178 bps over Treasuries, according to a syndicate source and an FWP filing with the Securities and Exchange Commission.

The notes, which were talked in the area of Treasuries plus 180 bps, priced at 99.066 to yield 4.492%.

Barclays, Citigroup, HSBC and Morgan Stanley & Co. LLC were the joint bookrunners.

Proceeds from the sale will be added to the general funds of Ford Credit and will be available for loans, the purchase of receivables and connection with the retirement of debt.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

United Airline's pass-throughs

United Airlines priced $929,351,000 of two classes of series 2013-1 pass-through certificates, according to an FWP filing with the Securities and Exchange Commission.

The company priced $720,315,000 of 4.3% class A certificates due Aug. 15, 2025 at par and $209,036,000 of 5.375% class B certificates due Aug. 15, 2021 at par.

Credit Suisse Securities (USA) LLC and Morgan Stanley acted as the lead bookrunners.

Proceeds will be used to acquire equipment notes that will be issued to finance the purchase of 21 new Boeing aircraft scheduled for delivery from October 2013 to June 2014.

The airline is based in Chicago.

Mersin prices

Turkey's Mersin International Port priced $450 million of 5.875% seven-year notes at 99.576 to yield 5.95% on Thursday, a syndicate source said.

The notes were talked at a yield in the low-6% area.

Citigroup, DBS Bank and Unicredit Bank were the bookrunners for the Rule 144A and Regulation S deal.

The notes include a change-of-control put and are non-callable for five years.

The Mersin-based issuer runs Turkey's largest port, which is jointly owned by Akfen Holding and PSA International.

Time Warner weaker

Time Warner Cable Inc.'s bonds widened over the session, though telecom debt in general ended better.

The company's 4% notes due 2021 eased 10 bps on the day to 215 bps bid, 205 bps offered.

"They had rallied pretty hard the past few trading sessions," a trader said.

The New York City-based entertainment company sold $1 billion of the notes (Baa2/BBB/BBB) on Sept. 7, 2011 at a spread of 210 bps over Treasuries.

Recent IBM notes tighten

In other trading, International Business Machines Corp.'s 3.375% notes due 2023 (Aa3/AA-/A+) that were sold on Monday ended Thursday at 81 bps bid, 78 bps offered, according to a trader.

The Armonk, N.Y.-based information technology and computer company sold $1.5 billion of the notes at a spread of Treasuries plus 83 bps.

CDS costs decline

Investment-grade bank and brokerage credit default swap costs declined on the day, according to a market source.

Bank of America Corp.'s CDS costs eased 4 bps to 109 bps bid, 114 bps offered. Citigroup Inc.'s CDS costs decreased 3 bps to 104 bps bid, 109 bps offered. JPMorgan Chase & Co.'s CDS costs fell 2 bps to 78 bps bid, 82 bps offered. Wells Fargo & Co.'s CDS costs dropped 2 bps to 63 bps bid, 68 bps offered.

Merrill Lynch's CDS costs were lowered 3 bps to 95 bps bid, 105 bps offered. Morgan Stanley's CDS costs eased 2 bps to 138 bps bid, 143 bps offered. Goldman Sachs Group, Inc.'s CDS costs fell 2 bps to 130 bps bid, 135 bps offered.

Paul Deckleman and Christine Van Dusen contributed to this article.

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