High-grade primary market sees another frenzy of issuance; secondary volume high

By Cristal Cody and Aleesia Forni

Virginia Beach, March 5 - Issuers continued to flood the high-grade primary market on Wednesday, pricing more than $15 billion of supply during the session.

In other market action, HSBC Holdings plc sold an upsized $3.5 billion two-part issue of subordinated notes in 10- and 30-year tranches during the session.

The deal was upsized from $2 billion.

There was a $2 billion tranche of 4.25% 10-year notes priced at Treasuries plus 165 basis points and a $1.5 billion tranche of 5.25% 30-year bonds priced at 170 bps over Treasuries.

Ford Motor Credit Co. sold $1.75 billion of senior notes due 2019 in fixed- and floating-rate tranches during the session.

A $650 million tranche of floating-rate notes priced at par to yield Libor plus 83 bps, while a $1.1 billion tranche of 2.375% notes sold with a spread of Treasuries plus 93 bps.

Meanwhile, Oesterreichische Kontrollbank AG sold a $1.25 billion issue of 1.625% notes due 2019 at Treasuries plus 20.35 bps.

Xilinx Inc. priced $1 billion of senior notes in tranches due 2019 and 2021.

PPL Capital Funding Inc. sold a two-part $750 million issue of senior notes in tranches due 2024 and 2044 on Wednesday.

There was a $350 million tranche of 3.95% notes due 2024 priced at Treasuries plus 130 bps and a $400 million tranche of 5% 30-year bonds at 138 bps over Treasuries.

The company sold $500 million of 2.125% notes due 2019 at 70 bps over Treasuries and $500 million of 3% notes due 2021 at Treasuries plus 95 bps.

The session also saw a crossover deal from ADT Corp.

The company sold $500 million of five-year senior notes at par to yield 4.125%, or Treasuries plus 259 bps.

The yield printed at the tight end of yield talk in the 4.25% area.

Texas Instruments Inc. came to market with $500 million of senior notes in tranches due 2017 and 2021.

The company's sale included a $250 million tranche of 0.875% notes due 2017 priced with a spread of Treasuries plus 25 bps.

A $250 million tranche of 2.75% seven-year notes priced at 70 bps over Treasuries.

Both tranches priced at the tight end of talk.

Hospitality Properties Trust sold an upsized $350 million issue of 4.65% senior notes due 2024 at 200 bps over Treasuries.

Tucson Electric Power Co. also came to the primary market, pricing a $150 million issue of 5% 30-year bonds with a spread of Treasuries plus 140 bps.

Carlyle Group Holdings II Finance LLC tapped its existing 5.625% notes due 2043 to add $200 million.

The sale was done under Rule 144A and Regulation S.

The session also saw new issues from McKesson Corp. and AT&T Inc., though full details were not available at press time.

In forward calendar news, Fannie Mae announced plans to issue Benchmark Notes due 2017 on Thursday, according to an informed source and a company press release.

The notes are being talked in the area of Treasuries plus 14.5 bps.

The day's deals brought the week's total supply to roughly $36 billion, though sources predict the market is not yet shut down for the week.

"It's been crazy," one market source said late Wednesday.

Secondary market trading volume was a "whopping $11.4 billion" on Wednesday for investment-grade corporate bonds only, a trader said.

Investment-grade spreads headed out mostly unchanged but remain tight, according to market sources.

The Markit CDX North American Investment Grade series 21 index was flat at a spread of 63 bps.

Viacom Inc.'s three tranches of notes (Baa2/BBB/BBB+) rose in secondary trading, a source said.

HSBC upsizes

HSBC priced an upsized $3.5 billion two-part offering of subordinated tier 2 notes (A3/A-/) in tranches due 2024 and 2044 on Wednesday, according to a market source.

A $2 billion tranche of 4.25% 10-year subordinated notes priced with a spread of Treasuries plus 165 bps. The notes were talked in the 190 bps area over Treasuries.

There was also a $1.5 billion tranche of 5.25% 30-year bonds priced at 170 bps over Treasuries. The bonds were talked in the 200 bps area over Treasuries.

HSBC Securities (USA) Inc. is the bookrunner.

The bank plans to use the proceeds for general corporate purposes.

HSBC is a London-based banking and financial services group.

Ford Motor new issue

Ford Motor Credit priced $1.75 billion of five-year notes on Wednesday in fixed- and floating-rate tranches, according to a market source and two separate FWP filings with the Securities and Exchange Commission.

The sale included $650 million of floating-rate notes due 2019 priced at par to yield Libor plus 83 bps.

A $1.1 billion tranche of 2.375% five-year notes sold with a spread of Treasuries plus 93 bps. Pricing was at 99.621 to yield 2.456%.

Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC were the joint bookrunners.

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

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

OeKB prices via three bookrunners

Oesterreichische Kontrollbank priced $1.25 billion of 1.625% notes (Aaa/AA+/) due March 12, 2019 with a spread of Treasuries plus 20.35 bps, according to an FWP filing with the SEC.

Pricing was at 99.409.

Goldman Sachs International, HSBC Bank plc and J.P. Morgan Securities were the joint bookrunners.

The export and financial services company for Austrian businesses is based in Vienna.

Xilinx sells $1 billion

Xilinx came to Wednesday's market with a $1 billion sale of senior notes (A3/A-/) in two tranches, according to an FWP filing with the SEC.

The company priced $500 million of 2.125% five-year notes at 99.477 to yield 2.236%, or 70 bps over Treasuries.

Xilinx also sold $500 million of 3% notes due 2021 at Treasuries plus 95 bps, or 99.281, to yield 3.115%.

JPMorgan was the bookrunner, while J. Woods Capital Advisors was a financial adviser.

Proceeds will be used to pay a portion of the redemption and/or conversion price of the company's 3.125% junior subordinated convertible debentures due 2037.

Xilinx is a San Jose, Calif.-based maker of electronic equipment and systems.

PPL sells $750 million

PPL Capital Funding priced $750 million of senior notes (Baa2/BBB-/BBB) in tranches due 2024 and 2044 on Wednesday, according to a syndicate source.

A $350 million tranche of 3.95% notes due 2024 priced with a spread of Treasuries plus 130 bps, or 99.672, to yield 3.99%.

The company also priced $400 million of 5% 30-year bonds at 138 bps over Treasuries.

Pricing was at 99.876 to yield 5.008%.

Both tranches feature make-whole calls, according to an FWP filed with the SEC.

The notes will be guaranteed by PPL Corp.

The joint bookrunners were BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, JPMorgan, Morgan Stanley & Co. LLC, Barclays, BNP Paribas Securities Corp., Scotiabank, UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds from the sale will be loaned to PPL Corp. and/or its subsidiaries and used for general corporate purposes.

Additionally, the underwriters have agreed to purchase junior subordinated notes due 2017 and 2019 of PPL Capital Funding in connection with the remarketing of the junior notes.

The junior notes will be sold in exchange for the new notes and a cash payment.

The sum of the amount received by the underwriters for the new notes being offered and the amount of cash the underwriters receive from the exchange will equal the purchase price of the junior notes in the remarketing.

The energy and utility holding company is based in Allentown, Pa.

Texas Instruments two-parter

Texas Instruments sold $500 million of senior notes in tranches due 2017 and 2021 on Wednesday, according to an informed source and an FWP filing with the SEC.

A $250 million tranche of 0.875% notes due 2017 sold at 99.802 to yield 0.942%, or Treasuries plus 25 bps.

A second tranche was $250 million of 2.75% seven-year notes priced with a spread of 70 bps over Treasuries.

Pricing was at 99.294 to yield 2.862%.

Both tranches priced at the tight end of talk.

Citigroup Global Markets, BofA Merrill Lynch, Mizuho Securities USA Inc., JPMorgan, Mitsubishi UFJ Securities and Morgan Stanley were the joint bookrunners.

Proceeds will be used to repay a portion of the company's 1.375% notes due May 15, 2014.

Texas Instruments is a Dallas-based semiconductor designer and manufacturer.

ADT crossovers

ADT priced a $500 million issue of non-callable five-year senior notes (Ba2/BB-/BBB-) at par to yield 4.125% on Wednesday, according to a syndicate source.

The yield printed at the tight end of yield talk in the 4.25% area.

BofA Merrill Lynch was the left bookrunner for the quick-to-market public offering. Citigroup Global Markets, JPMorgan, Morgan Stanley, Barclays, Credit Suisse Securities and Goldman Sachs & Co. were the joint bookrunners.

Proceeds will be used to repay debt and for general corporate purposes.

ADT is a Boca Raton, Fla.-based provider of security services for homes and businesses.

Hospitality Properties upsizes

Hospitality Properties was in Wednesday's market with an upsized $350 million issue of 4.65% senior notes due 2024, which sold with a spread of 200 bps over Treasuries, according to a market source and an FWP filed with the SEC.

The notes (Baa2/BBB-/) priced at 99.683 to yield 4.69%.

Citigroup Global Markets, RBC Capital Markets, UBS Securities and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay amounts outstanding under the company's revolving credit facility and for general business purposes.

The real estate investment trust is based in Newton, Mass.

Tucson Electric prices

Tucson Electric priced a $150 million issue of 5% notes (Baa1/BBB/BBB) due 2044 on Wednesday with a spread of Treasuries plus 140 bps, according to an FWP filing with the SEC.

Pricing was at 99.445 to yield 5.036%.

JPMorgan and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay amounts outstanding under the company's revolving credit facility, with any remaining balance to be applied to general corporate purposes, according to a 424B3 filing with the SEC.

The utility is based in Tucson.

Carlyle Group adds on

Carlyle Group Holdings II Finance priced a $200 million tap of its existing 5.625% senior notes (/A-/) due 2043, according to a company release.

The sale was done under Rule 144A and Regulation S.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by the Carlyle Group LP and indirect subsidiaries Carlyle Holdings I LP, Carlyle Holdings II LP and Carlyle Holdings III LP.

The original $400 million of 5.625% senior notes priced on March 25 to yield Treasuries plus 250 bps.

The joint bookrunners were Citigroup Global Markets and JPMorgan.

The global asset management firm is based in Washington, D.C.

Fannie Mae sets talk

Fannie Mae is planning to issue Benchmark Notes due March 10, 2017 on Thursday, according to an informed source and a company press release.

The notes are being talked in the area of Treasuries plus 14.5 bps.

The issue will settle on March 10.

Barclays, Citigroup Global Markets and Deutsche Bank Securities Inc. are the joint lead managers.

Co-managers are FTN Financial Capital Markets, Great Pacific Securities, Jefferies & Co., Ramirez & Co., Inc., TD Securities USA LLC and Williams Capital Group LP.

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

Viacom better

Viacom's 2.2% senior notes due 2019 edged up to 99.98 from where the issue priced at 99.947 to yield 2.211% in a $400 million offering on Tuesday, according to a market source.

The tranche of 3.875% senior notes due 2024 rose to 99.25 over the day. Viacom sold $550 million of the 10-year notes at 99.192 to yield 3.973% in the three-part note deal.

The company's 5.25% senior debentures due 2044 climbed to 100.22 in secondary trading, according to the market source.

Viacom sold $550 million of the 30-year debentures at 99.831 to yield 5.261%.

The entertainment content company is based in New York City.

Bank/brokerage CDS flat to lower

Investment-grade bank and brokerage CDS prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs ended flat at 65 bps bid, 68 bps offered. Citigroup Inc.'s CDS costs firmed 2 bps to 77 bps bid, 80 bps offered. JPMorgan Chase & Co.'s CDS costs were unchanged at 59 bps bid, 62 bps offered. Wells Fargo & Co.'s CDS costs firmed 2 bps to 37 bps bid, 42 bps offered.

Merrill Lynch's CDS costs closed flat at 68 bps bid, 71 bps offered. Morgan Stanley's CDS costs were unchanged at 87 bps bid, 90 bps offered. Goldman Sachs Group, Inc.'s CDS costs ended flat at 88 bps bid, 93 bps offered.

Paul Deckelman and Paul A. Harris contributed to this review.

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