Williams brings crossovers; Hess, Societe Generale price; Williams, Hess mixed in secondary

By Aleesia Forni and Cristal Cody

Virginia Beach, June 19 – The primary market saw new deals from Williams Cos. Inc., Hess Corp. and Societe Generale SA on Thursday during another solid session for investment-grade bonds.

Williams came to market with a $1.9 billion offering, while Hess sold $600 million of senior notes.

Both tranches of Williams Cos.’s crossover deal sold at the tight end of price talk, a market source said, which had firmed from original guidance.

The 10-year tranche priced 25 basis points tighter compared to original guidance, while the 30-year tranche printed around 35 bps tighter.

Hess’s two-parter sold around 15 bps to 20 bps tighter than initial price talk, a source said.

Details of the new issue from Societe Generale were unavailable at press time.

In forward calendar news, FS Investment Corp. announced plans to kick off a roadshow ahead of a possible bond offering.

Investment-grade bond spreads tightened about another basis point in Thursday’s session, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 56 bps.

New issues were mostly unchanged in aftermarket trading.

The two tranches that Williams priced traded wrapped around issuance to slightly weaker in the secondary market, according to a trader.

Hess’ two-part offering was mixed as the session closed, a trader said.

Williams two-parter

The session saw Williams Cos. sell a $1.9 billion split-rated issue of bonds.

The two-tranche sale included $1.25 billion of 4.55% 10-year notes priced at 99.738 to yield 4.583%, or Treasuries plus 195 bps.

A second tranche was $650 million of 5.75% 30-year bonds, which sold at 99.773 to yield 5.766%, or Treasuries plus 230 bps.

Both tranches sold at the tight end of talk, which had firmed 20 bps to 30 bps from original guidance.

Williams’ 4.55% notes due 2024 were quoted in the secondary market at 195 bps bid, 192 bps offered, according to a trader.

The company’s tranche of 5.75% bonds due 2044 traded 1 bp weaker on the bid side at 231 bps bid, 228 bps offered.

The bookrunners were Barclays, Citigroup Global Markets Inc. and UBS Securities LLC.

Proceeds will be used, along with borrowings under a revolving credit facility and bridge facility, if needed, to fund the investment in equity interest of Access Midstream Partners LP.

Tulsa, Okla.-based Williams finds, produces, gathers, processes and transports natural gas.

Hess prices tight

Hess Corp. sold a $600 million two-part issue of senior notes (Baa2/BBB/) on Thursday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $300 million of 1.3% three-year notes priced at 99.881 to yield 1.341%, or Treasuries plus 40 bps.

There was also a $300 million tranche of 3.5% 10-year notes sold at 99.327 to yield 3.58%, or Treasuries plus 95 bps.

In secondary trading, Hess’ 1.3% notes due 2017 firmed to 39 bps bid, 37 bps offered, a trader said.

The 3.5% notes due 2024 headed out at 96 bps bid, 92 bps offered.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBS Securities Inc., BNP Paribas Securities Corp. and Goldman Sachs & Co. were the bookrunners.

Proceeds will be used to refinance the repayment of the $250 million of the company’s 7% notes due Feb. 15, 2014 and to retire various lease obligations, as well as for working capital and other general corporate purposes.

The global energy company is based in New York City.

FS on deck

FS Investment (/BBB-/BBB-) has mandated Citigroup Global Markets, Wells Fargo Securities LLC and JPMorgan to arrange a series of investor meetings next week for a possible capital markets transaction, according to a filing with the SEC.

The meetings will take place in New York on Tuesday and Wednesday before heading to Boston on Thursday.

Telephonic meetings will be held June 24 through June 27.

FS Investment is a Philadelphia-based specialty finance company that invests primarily in the debt securities of private U.S. middle-market companies.

Bank/brokerage CDS costs decline

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

Bank of America Corp.’s CDS costs firmed 1 bp to 58 bps bid, 61 bps offered. Citigroup Inc.’s CDS costs fell 1 bp to 57 bps bid, 60 bps offered. JPMorgan Chase & Co.’s CDS costs were flat at 47 bps bid, 50 bps offered. Wells Fargo & Co.’s CDS costs eased 1 bp to 35 bps bid, 38 bps offered.

Merrill Lynch’s CDS costs tightened 1 bp to 61 bps bid, 64 bps offered. Morgan Stanley’s CDS costs declined 1 bp to 58 bps bid, 61 bps offered. Goldman Sachs Group, Inc.’s CDS costs firmed 2 bps to 61 bps bid, 64 bps offered.

Paul Deckelman contributed to this review.

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