Citigroup, Fluor price; Ares Capital upsizes; AT&T, Verizon notes widen

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 18 – Issuance in the investment-grade bond market rolled on during Tuesday’s session.

Citigroup Inc., Fluor Corp. and Ares Capital Corp. were among the names bringing new deals to the day’s primary market.

Citigroup priced a $2 billion issue of three-year senior notes in fixed- and floating-rate tranches on top of price talk on Tuesday.

Ares Capital also sold its upsized $400 million offering in line with talk, which had firmed around 15 basis points compared to initial guidance.

Also on Tuesday, Fluor’s new $500 million of notes due 2024 sold at the tight end of price talk.

The primary also saw Oceaneering International Inc. issue $500 million of 10-year senior notes.

Retail Opportunity Investments Partnership LP and Entergy Louisiana LLC were each in the market with $250 million offerings, respectively.

Retail Opportunity sold its new 10-year senior notes around 10 bps tighter than the midpoint of guidance, while the new 30-year first mortgage bonds from Entergy Louisiana sold at the tight end of talk.

Johnson & Johnson and Parker-Hannifin Corp. were also in the market on Tuesday, though details of the sales were unavailable at press time.

The session saw $7.4 billion of new issuance pricing, pushing the week’s total to nearly $16 billion.

This figure is already more than halfway to what was predicted to be around a $30 billion week.

Investment-grade credit spreads and bonds headed out mostly weaker, according to market sources.

The Markit CDX North American Investment Grade series 23 index was less than 1 bp wider on the day at a spread of 67 bps.

In the secondary market, AT&T Inc.’s 3.9% notes due 2024 have widened 20 bps since Friday, a market source said.

Verizon Communications Inc.’s 4.15% senior notes due 2024 traded more than 10 bps weaker, the source said.

Apple Inc.’s 3.45% notes due 2024 remained mostly flat, according to a market source.

Bank and financial paper was mostly weaker in the secondary market, with Bank of America Corp.’s 4% notes due 2024 quoted 4 bps wider.

Citigroup brings $2 billion

Citigroup sold a combined $2 billion of three-year senior notes (Baa2/A-/A) in fixed- and floating-rate tranches on Tuesday, an informed source said.

The bank sold $400 million of three-year floaters at par to yield Libor plus 70 bps.

There was also a $1.6 billion tranche of 1.85% three-year notes sold at 99.98 to yield 1.857%, or Treasuries plus 90 bps.

Both tranches sold on top of price talk.

Citigroup Global Markets Inc. was the bookrunner.

The bank is based in New York.

Fluor new issue

The primary also saw Fluor price a $500 million issue of 3.5% senior notes (A3/A-/A-) due 2024 on Tuesday at Treasuries plus 130 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at the tight end of talk.

The notes sold at 98.919 to yield 3.629%.

A previously announced, the 30-year tranche of notes was dropped prior to the deal’s launch.

The bookrunners were BofA Merrill Lynch and BNP Paribas Securities Corp.

Fluor plans to use the net proceeds from the offering for general corporate purposes, including its stock repurchase program.

The holding company for engineering, construction and maintenance subsidiaries is based in Irving, Texas.

Oceaneering 10-years

Oceaneering International sold a $500 million issue of 4.65% 10-year senior notes (Baa2/BBB/) with a spread of Treasuries plus 237.5 bps, according to an FWP filed with the SEC.

Pricing was at 99.614 to yield 4.699%.

Price guidance was in the low- to mid-200 bps area over Treasuries.

The bookrunners were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, DnB NOR Markets Inc. and HSBC Securities (USA) Inc.

The company plans to use the proceeds from the offering for general corporate purposes, which may include funding acquisitions and other capital expenditures and repurchases of outstanding shares of common stock.

Oceaneering is a Houston-based provider of engineered services and products primarily to the offshore oil and gas industry with a focus on deepwater applications.

Ares upsizes

In other primary news, Ares Capital sold an upsized $400 million offering of 3.875% senior notes due Jan. 15, 2020 with a spread of 235 bps over Treasuries, according to an informed source and a 497AD filed with the SEC.

The notes (/BBB/BBB) sold in line with talk, which had firmed around 15 bps compared to initial guidance.

Pricing was at 99.6 to yield 3.96%.

The bookrunners were BofA Merrill Lynch, JPMorgan, Wells Fargo Securities, Barclays, Deutsche Bank Securities Inc., Mizuho Securities (USA) Inc., Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey Inc.

Proceeds will be used for general corporate purposes.

The alternative asset management firm is based in Los Angeles.

Retail Opportunity offering

Retail Opportunity Investments Partnership sold a $250 million offering of 4% 10-year senior notes (Baa2/BBB-/) at Treasuries plus 185 bps on Tuesday, according to a market source and an FWP filing with the SEC.

The notes sold around 10 bps tighter than the midpoint of guidance.

Pricing was at 98.6 to yield 4.172%.

The notes are guaranteed by Retail Opportunity Investments Corp.

U.S. Bancorp Investments Inc., Jefferies & Co., JPMorgan and RBC Capital Markets LLC 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.

Entergy prices tight

The session also saw Entergy Louisiana sell $250 million of 4.95% 30-year first mortgage bonds (A2/A-/) on Tuesday at Treasuries plus 192 bps, according to an informed source and an FWP filing with the SEC.

Pricing was at 99.616 to yield 4.974%.

The notes sold at the tight end of the Treasuries plus 195 bps area talk, which tightened from guidance set in the Treasuries plus low-200 bps area.

BNP Paribas Securities, MUFG, Mizuho Securities, RBS Securities Inc. and Scotia Capital (USA) Inc. were the joint bookrunners.

Proceeds will be used to repay the company’s outstanding $250 million 1.875% first mortgage bonds due Dec. 15, 2014.

Entergy Louisiana is a Jefferson, La.-based energy provider.

AT&T widens

AT&T’s 3.9% notes due 2024 traded more than 20 bps wider at 141 bps offered on Tuesday, according to a market source.

The notes were quoted on Friday at 120 bps offered.

AT&T sold $1 billion of the 10-year notes (A3/A-/A) on March 5, 2014 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Verizon softer

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) widened to 149 bps offered in the secondary market, a market source said.

The notes traded unchanged over Friday’s session at 132 bps offered.

Verizon sold $1.25 billion of the notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

Apple stable

Apple’s 3.45% notes due 2024 (Aa1/AA+/) traded flat to 1 bp softer at 81 bps offered, according to a market source.

Apple sold $2.5 billion of the notes at a spread of Treasuries plus 77 bps on April 29, 2014.

The computer and mobile communications device company is based in Cupertino, Calif.

Bank of America eases

Bank of America’s 4% notes due 2024 (Baa2/A-/A) eased 4 bps to 130 bps offered, a market source said.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

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