Morning Commentary: VMware, Bank of New York Mellon price; Edison International, Ipalco on tap

By Devika Patel

Knoxville, Tenn., Aug. 17 – Thursday brought news of two new issues and two announced offerings in the investment-grade bond primary market.

Palo Alto, Calif., virtualization solutions provider VMware, Inc. priced $4 billion of fixed-rate senior notes in three parts on Wednesday after the market close, and Bank of New York Mellon Corp., a New York financial products and services company, sold $750 million of 12-year senior subordinated notes (A2/A-/ A+) late Wednesday.

Still ahead, Rosemead, Calif., energy company Edison International Inc. announced an offering of five-year fixed-rate senior notes, and Indianapolis Power & Light Co. holding company Ipalco Enterprises Inc. announced a $405 million offering of senior secured notes.

VMware prices $4 billion

VMware priced $4 billion of senior notes in three tranches on Wednesday after the close.

The company priced $1.25 billion of 2.3% three-year notes at a spread of 85 basis points over Treasuries. These notes were priced at 99.87 to yield 2.345%.

A $1.5 billion tranche of 2.95% five-year notes priced with a Treasuries plus 120 bps spread. These notes were priced at 99.792 to yield 2.995%.

VMware sold $1.25 billion of 3.9% 10-year notes at 170 bps over Treasuries. These notes were priced at 99.664 to yield 3.941%.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the active bookrunners. Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., UBS Securities LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the passive bookrunners.

Proceeds will be used to fund a $1 billion share repurchase program through Aug. 31, 2018, to repay in full two promissory notes with a combined principal of $1.23 billion and for general corporate purposes.

BNY Mellon taps market

Bank of New York Mellon priced $750 million 3.3% senior subordinated notes (A2/A-/A+) due Aug. 23, 2029 on Wednesday after the close at par to yield 108 bps over Treasuries.

Credit Suisse Securities, Deutsche Bank Securities, RBC Capital Markets, UBS Securities and BNY Mellon Capital Markets LLC were the bookrunners.

Edison eyes five-year notes

Edison International plans to price fixed-rate senior notes due Sept. 15, 2022. The notes will have a make-whole call and are then callable at par.

The bookrunners are BNP Paribas Securities Corp., Citigroup Global Markets Inc. and MUFG.

Proceeds will be used to repay at maturity the company’s 3.75% senior notes due 2017.

Ipalco to price notes

Ipalco plans to conduct a $405 million Rule 144A offering of senior secured notes.

Proceeds will be used to repurchase or redeem the company’s $400 million outstanding 5% senior secured notes due 2018.

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