BHP sees surprising demand; BofA prices following strong earnings; Intel mixed; Apple soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 14 – BHP Billiton plc and Bank of America Corp. were among the issuers bringing $8.65 billion to the investment-grade primary market following an upswing in sentiment.

With most of the deals priced earlier during the week faring better in the secondary, one source noted that the market was primed and ready for Wednesday’s slew of new deals.

Natural resources company BHP Billiton’s long-awaited offering went over “surprisingly well” in the face of the current market backdrop and sliding commodity prices, one market source said, garnering an order book that was more than four times oversubscribed.

Bank of America sold a two-part offering on the heels of its better-than-expected earnings release earlier during the session. The bank posted $4.5 billion of revenues for the third quarter versus last year’s net loss of $232 million due to its $16.65 billion settlement with the Justice Department.

Other financial names pricing new deals on Wednesday included Oesterreichische Kontrollbank AG, Bank of Nova Scotia and Sumitomo Mitsui Banking Corp.

This week has seen $23 billion of new issuance enter the investment-grade primary market, with more than $16 billion of that total coming from the financial sector.

“I would say we’ll see more [FIG issuance] tomorrow,” a market source said.

Meantime, DDR Corp. and National Retail Properties, Inc. were each in the primary with upsized new deals.

Investment-grade bonds were mixed in secondary trading on Wednesday.

Intel Corp.’s senior notes (A1/A+/ A+) traded flat to softer after the company reported lower third-quarter earnings late the previous day.

Apple Inc.’s bonds (Aa1/AA+/) headed out 4 basis points wider in the secondary market.

The Markit CDX North American Investment Grade 25 index closed 1 bp wider at a spread of 85 bps.

BHP Billiton taps market

BHP Billiton sold $3.25 billion of subordinated notes (A3/A-) on Wednesday in two tranches in a deal that the market has been awaiting for nearly a month.

The sale included $1 billion of 60-year bonds, which will be non-callable for five years. The tranche priced at par to yield 6.25%, a market source said.

A $2.25 billion tranche of 60-year bonds, which are non-callable for 10 years, priced at par to yield 6.75%.

Both tranches sold at the tight end of guidance.

Proceeds will be used for general corporate purposes, including refinancing debt.

Barclays, Goldman Sachs & Co., BofA Merrill Lynch and BNP Paribas Securities Corp. are the bookrunners for the Rule 144A and Regulation S deal.

The diversified natural resources company is based in Melbourne, Australia.

Newell Rubbermaid two-parter

In another highly anticipated deal, Newell Rubbermaid Inc. came to market with a $600 million two-tranche offering of senior notes (Baa3/BBB-/BBB+) to help fund its acquisition of Elmer’s Products Inc., according to a market source and an FWP filed with the Securities and Exchange Commission.

The offering included $300 million of 2.15% three-year notes priced at 99.997 to yield 2.151%, or 130 bps over Treasuries.

The notes were sold at the tight end of the Treasuries plus 135 bps area guidance following talk set in the 160 bps area over Treasuries.

A $300 million 3.9% tranche of 10-year notes sold at 99.686 to yield 3.938%, or Treasuries plus 195 bps.

Guidance was in the 200 bps area over Treasuries, tightened from talk in the Treasuries plus 225 bps area.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the bookrunners.

The notes feature a change-of-control put at 101%.

The consumer and commercial products maker is based in Atlanta.

BofA prices $3.25 billion

Bank of America priced a $3.25 billion two-tranche issue of senior notes (Baa1/A-) on Wednesday, according to an informed source.

There was $2.25 billion of 2.625% notes due 2020 priced at 99.967 to yield 2.632%, or Treasuries plus 135 bps.

A $1 billion tap of the company’s existing 3.875% notes due Aug. 1, 2025 priced at 101.8 to yield 3.654%, or Treasuries plus 167 bps.

The original $2.5 billion issue of senior notes sold on July 27 at Treasuries plus 167 bps.

Both tranches sold at the tight end of price guidance.

BofA Merrill Lynch is the bookrunner.

Proceeds will be used for general corporate purposes.

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

21st Century two-parter

Also during the session, 21st Century Fox America Inc., a wholly owned subsidiary of Twenty-First Century Fox, Inc., sold a $1 billion offering of senior notes (BBB+) in tranches due 2025 and 2045, a market source said.

A $600 million tranche of 3.7% 10-year bonds sold at Treasuries plus 175 bps.

Also priced was $400 million of 4.95% 30-year bonds at Treasuries plus 215 bps.

Both tranches were issued at the tight end of price guidance.

JPMorgan, BofA Merrill Lynch, Citigroup, Deutsche Bank Securities Inc., Goldman Sachs and Morgan Stanley & Co. LLC are the bookrunners for the Rule 144A and Regulation S deal.

The mass media company is based in New York.

OeKB global notes

Oesterreichische Kontrollbank priced a $1 billion issue of 1.5% five-year global notes on Wednesday in line with talk of mid-swaps plus 30 bps, according to a market source and an FWP filed with the SEC.

The issue (Aaa/AA+) sold at 99.431 with a spread of Treasuries plus 32.55 bps.

Barclays, Citigroup and JPMorgan are the bookrunners.

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

Bank of Nova Scotia prices

The primary also hosted Bank of Nova Scotia on Wednesday, which priced $1 billion of 2.35% five-year notes (Aa2/A+/AA+) at Treasuries plus 107 bps, a market source said.

The notes priced at the tight end of the 110 bps area over Treasuries guidance. Initial talk was in the Treasuries plus 115 bps area.

Pricing was at 99.967 to yield 2.357%.

Bookrunners are BofA Merrill Lynch, JPMorgan, Morgan Stanley, Scotia Capital and Wells Fargo Securities LLC.

The financial services company is based in Toronto.

SMBC green bond

Sumitomo Mitsui Banking, meanwhile, priced $500 million of 2.45% green bonds (A1/A) due 2020 at Treasuries plus 120 bps, an informed source said.

Pricing was at 99.874 to yield 2.477%.

Bookrunners were BofA Merrill Lynch and SMBC.

Sumitomo Mitsui is a Tokyo-based financial services company.

LeasePlan sells $500 million

And LeasePlan Corp. NV priced $500 million of 2.875% notes (A3/A-) due January 2019 with a 205 bps spread over Treasuries, a market source said.

The notes were talked in the 210 bps area over Treasuries, having tightened from the 212.5 bps area over Treasuries.

Bookrunners were Citigroup, Deutsche Bank, HSBC Securities and JPMorgan.

The financial institution specializing in car fleet management is based in Almere, the Netherlands.

National Retail offering

National Retail Properties sold an upsized $400 million of 4% 10-year senior notes (Baa1/BBB+/BBB+) on Wednesday at Treasuries plus 205 bps, according to an informed source and an FWP filed with the SEC.

Pricing was at 99.759 to yield 4.029%.

The issue was increased from a planned $350 million.

The offering came tighter than guidance, which was set in the 215 bps area over Treasuries. Initially, talk was in the Treasuries plus 230 bps to 235 bps range over Treasuries.

Citigroup, Wells Fargo, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. are the bookrunners.

Proceeds will be used to repay outstanding debt under the company’s credit facility, to fund future property acquisitions and for general corporate purposes.

The real estate investment trust for retail properties is based in Orlando.

DDR upsizes

In another upsized new deal, DDR priced $400 million of 4.25% senior notes on Wednesday with a spread of Treasuries plus 237.5 bps, according to an FWP filing with the SEC.

Pricing was at 99.094 to yield 4.361%.

The issue (Baa2/BBB-/BBB-) was upped from $300 million and came at the tight end of guidance.

Citigroup, JPMorgan, UBS Securities LLC, RBC Capital Markets LLC and Scotia Capital are the bookrunners.

Proceeds will be used to repay debt under a $750 million unsecured revolving credit facility and for general corporate purposes, which may include the repayment of secured and unsecured debt from time to time. Proceeds may also be used to satisfy cash obligations in connection with the repurchase, redemption or conversion of convertible notes.

The real estate investment trust is based in Beachwood, Ohio.

Intel mixed

Intel’s 3.7% notes due 2025 were unchanged in secondary trading on Wednesday at 119 bps bid, according to a market source.

Intel sold $2.25 billion of the notes on July 22 at a spread of Treasuries plus 140 bps.

The company’s 4.9% bonds due 2045 eased 2 bps to 171 bps bid.

The company priced $2 billion of the bonds at Treasuries plus 185 bps in the July 22 offering.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

Apple softens

Apple’s 3.2% notes due 2025 eased 4 bps to 99 bps bid during the session, a market source said.

The company sold $2 billion of the notes on May 6 at Treasuries plus 100 bps.

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

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