Primary rush continues with HSBC, Williams, Woodside; Morgan Stanley firms; Apple stable

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 26 – The investment-grade bond market’s momentum continued on Thursday, with $11.83 billion of new deals priced during the session.

The primary saw Williams Cos. Inc. issue a $3 billion three-tranche offering of senior notes.

All three tranches sold between 10 basis points to 15 bps tight of initial price talk.

Meanwhile, HSBC USA Inc. garnered an orderbook that was nearly two times oversubscribed for its $3.3 billion offering of senior notes priced in three parts.

Woodside Finance Ltd. was in the market with $1 billion of 3.65% 10-year notes priced at the tight end of guidance.

LyondellBasell Industries NV sold an offering of bonds during the session after dropping a previously announced 20-year tranche, choosing instead to price the entire $1 billion issue in a single tranche due 2055.

The new deal saw an orderbook that was around three times oversubscribed.

There was also a three-part new issue from Caterpillar Financial Services Corp. priced on Thursday. The company sold $875 million of notes in new and re-opened tranches.

The session also saw Xerox Corp. price $650 million of notes in two parts.

Thursday’s activity brings the week’s new issuance tally to a staggering $40,725, 000,000, making it the busiest week for investment-grade supply so far this year.

Bonds traded unchanged to modestly better in the secondary market, sources said.

Morgan Stanley’s 2.65% senior notes due 2020 firmed 2 bps during the session.

Bank of America Corp.’s 4% notes due 2025 and Wells Fargo & Co.’s 2.15% notes due 2020 traded flat on the day.

Apple Inc.’s 2.5% senior notes due 2025 were unchanged going out.

The Markit CDX North American Investment Grade index ended unchanged at a spread of 62 bps.

Williams prices tight

The Williams Cos. sold a $3 billion three-tranche offering of senior notes (Baa2/BBB/BBB) during the session on Thursday, according to a market source and an FWP filed with the Securities and Exchange Commission.

There was $1.25 billion of 3.6% notes due 2022 priced at 99.968 to yield 3.605%, or with a spread of Treasuries plus 175 bps.

The notes sold at the tight end of talk set in the 180 bps area. Guidance was set in the 190 bps area over Treasuries.

A $750 million tranche of 4% notes due 2025 sold at 99.675 to yield 4.038%, or at Treasuries plus 200 bps.

Pricing was at the tight end of the 205 bps area talk, which had firmed from guidance of 210 bps to 215 bps over Treasuries.

Finally, $1 billion of 5.1% notes due 2045 sold at 99.522 to yield 5.131%, or Treasuries plus 250 bps.

The notes sold at the tight end of the 255 bps area talk, which tightened from initial guidance set in the 260 bps area.

The bookrunners were Barclays, BofA Merrill Lynch, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and RBC Capital Markets, LLC.

Proceeds will be used to repay amounts outstanding under the company’s commercial paper program, to fund capital expenditures and for general partnership purposes.

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

HSBC three-parter

HSBC USA sold a $3.3 billion three-part offering of senior notes (A2/A/) on Thursday, according to an informed source.

There was $300 million of floating-rate notes due 2017 priced at par to yield Libor plus 45 bps.

A $1.25 billion tranche of 1.7% notes due 2018 sold at 70 bps over Treasuries.

Pricing was at 99.907 to yield 1.732%.

Price talk was set in the 72 bps area. The notes were guided in the high-70 bps area over Treasuries.

A $1.75 billion tranche of 2.35% notes due 2020 sold at 99.902 to yield 2.371%, or Treasuries plus 83 bps.

Pricing was at the tight end of the 85 bps area over Treasuries talk. Guidance was set at Treasuries plus the low-90 bps area.

HSBC Securities (USA) Inc. was the bookrunner.

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

HSBC USA is subsidiary of HSBC Holdings, a London-based banking and financial services group.

LyondellBasell’s $1 billion

LyondellBasell Industries priced $1 billion of senior notes (Baa1/BBB/) on Thursday with a spread of Treasuries plus 210 bps, according to a market source and an FWP filing with the SEC.

Pricing was at 98.353 to yield 4.717%.

The notes sold at the tight end of the Treasuries plus 215 bps area talk.

A planned 40-year tranche of bonds was dropped prior to the deal’s launch.

The bookrunners were Credit Suisse Securities, Deutsche Bank Securities, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays, Citigroup Global Markets Inc., BofA Merrill Lynch and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, including the repurchase of LyondellBasell's ordinary shares.

The Houston-based chemical company has executive offices in London and is incorporated in the Netherlands.

Woodside offering

Woodside Finance sold $1 billion of 3.65% 10-year notes on Thursday to yield Treasuries plus 165 bps, a market source said.

The notes priced at the tight end of guidance in the 170 bps area.

The notes (Baa1/BBB+/) were priced at 99.924 to yield 3.657%. They priced under Rule 144A and Regulation S.

Bookrunners were Citigroup Global Markets, Credit Suisse Securities, Morgan Stanley and UBS Securities LLC.

Proceeds are being used for general corporate purposes.

The finance arm of the hydrocarbon exploration and production company is based in Perth, Australia.

Caterpillar new issue

Caterpillar Financial Services priced $875 million of notes (A2/A/A) on Thursday in new and re-opened tranches, according to a market source and three separate FWP filings with the SEC.

The company sold $250 million of two-year floating-rate notes at par to yield Libor plus 14 bps.

Pricing was at the tight end of talk set in the Libor plus 15 bps area. Guidance was set in the 18 bps area over Treasuries.

A $500 million tranche of 2% five-year notes priced at 99.782 to yield 2.046%, or Treasuries plus 53 bps.

The notes sold at the tight end of talk set in the 55 bps area, having tightened from the low 60 bps area over Treasuries.

A third tranche was a $125 million add-on to the company’s existing 3.25% notes due 2024 priced with a spread of Treasuries plus 80 bps.

Pricing was at 103.792 to yield 2.802%.

The notes sold at the tight end of guidance set in the 85 bps area over Treasuries.

Proceeds will be used for general corporate purposes.

The funding arm of heavy equipment maker Caterpillar is based in Nashville.

Xerox prices tight

Xerox priced $650 million of senior notes (Baa2/BBB/BBB) in tranches due 2020 and 2034, according to an informed source.

The company priced $400 million of 2.75% 5.5-year notes at 99.879 to yield 2.774%, or Treasuries plus 125 bps.

The notes sold at the tight end of the Treasuries plus 130 bps area talk.

A second tranche was $250 million of 4.8% 20-year bonds priced at 99.428 to yield 4.845%, or Treasuries plus 225 bps.

Pricing was at the tight end of the 230 bps area talk.

BofA Merrill Lynch, Goldman Sachs & Co., JPMorgan and Mizuho Securities were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The maker of office machines is based in Norwalk, Conn.

FHLB global bonds

In other primary market news on Thursday, Federal Home Loan Banks priced $3 billion of 1.125% three-year global bonds at Treasuries plus 14.5 bps, according to a company news release.

The bonds were talked in the area of 15 bps over Treasuries.

Pricing was at 99.954 to yield 1.14%.

Lead managers for the issue were Deutsche Bank Securities New York, HSBC Securities and Morgan Stanley.

FHLBanks are 12 government-sponsored funding providers.

Morgan Stanley firms

Morgan Stanley’s 2.65% notes due 2020 headed out 2 bps tighter at 93 bps bid, according to a market source.

Morgan Stanley sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 22 at Treasuries plus 130 bps.

The financial services company is based in New York City.

Bank of America flat

Bank of America’s 4% notes due 2025 were flat at 184 bps bid, a source said.

Bank of America sold $2.5 billion of the notes (Baa3/BBB+/) on Jan. 16 at Treasuries plus 225 bps.

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

Wells Fargo steady

Wells Fargo’s 2.15% notes due 2020 were flat at 69 bps bid, a market source said.

Wells Fargo priced $2 billion of the notes (A2/A+/AA-) on Jan. 26 at 85 bps over Treasuries.

The bank is based in San Francisco.

Apple unchanged

Apple’s 2.5% notes due 2025 were unchanged on the day at 68 bps bid, a market source said.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at a spread of Treasuries plus 85 bps.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.