BP, Citigroup, Deutsche, Lazard Group join primary; AT&T mixed; Verizon stable; Apple soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 10 – BP Capital Markets plc, Deutsche Bank AG, London Branch and Citigroup Inc. were among the issuers pricing more than $7 billion during a solid session for investment-grade bonds.

BP Capital Markets led the way on Tuesday, attracting an orderbook that was more than two times oversubscribed for its $2.75 billion new issue.

All four tranches of the deal sold around 20 basis points to 25 bps tight of initial guidance.

Also on Tuesday, Deutsche Bank priced $2.5 billion of three-year notes in fixed- and floating-rate tranches.

In another financial deal, Citigroup sold a $2 billion issue of five-year notes at the tight end of talk.

A source noted that the deal’s orderbook reached $4.7 billion prior to its launch.

The session also saw Ally Financial Inc. come to market with a $1.25 billion junk-rated issue sold off the investment-grade desk.

In other primary happenings, Lazard Group LLC priced $400 million of 10-year notes, Affiliated Managers Group Inc. sold an upsized $350 million 10-year offering, and Third Point Re (USA) Holdings Inc. issued $115 million of notes due 2025.

ERAC USA Finance LLC was also in the market on Tuesday with a $500 million offering of notes, though details of the sale were unavailable at press time.

In the secondary market, AT&T Inc.’s bonds (Baa1/BBB+/A) were mixed over the day.

Verizon Communications Inc.’s 4.15% notes due 2024 headed out unchanged.

Apple Inc.’s 3.45% notes due 2024 traded 5 bps softer.

The Markit CDX North American Investment Grade index edged less than 1 bp tighter to a spread of 66 bps.

BP four-parter

BP Capital Markets priced $2.75 billion of senior notes (A2/A/) on Tuesday in four tranches, a market source said.

The sale included $400 million of two-year floating-rate notes priced at par to yield Libor plus 35 bps.

Pricing was at the tight end of talk set in the Libor plus 40 bps area, which firmed from initial guidance set at Libor plus 50 bps to 55 bps.

A $250 million tranche of three-year floating-rate notes priced at par to yield Libor plus 42.5 bps.

The notes were talked at the Libor equivalent to the three-year notes.

The company also priced $850 million of 1.674% three-year notes at par with a spread of 65 bps over Treasuries.

The notes sold at the tight end of guidance set in the 70 bps area over Treasuries. Talk had tightened from guidance set in the 85 bps area over Treasuries.

A $1.25 billion tranche of 2.315% five-year notes sold at par, or 80 bps over Treasuries.

Pricing was at the tight end of the Treasuries plus 85 bps area talk. Guidance was set in the 100 bps area over Treasuries.

The bookrunners were Credit Agricole, Goldman Sachs & Co., Mizuho Securities and RBS Securities Inc.

Proceeds from the offering will be used for general corporate purposes.

The unit of oil company BP plc is based in London.

Deutsche Bank offering

Deutsche Bank AG, London Branch priced $2.5 billion of notes (A3/A/A+) due 2018 in fixed- and floating-rate tranches on Tuesday, according to a market source.

The sale included a $500 million tranche of floating-rate notes priced at par to yield Libor plus 68 bps. The notes sold on top of talk.

A second tranche was $2 billion of 1.875% three-year notes priced on top of talk at 90 bps over Treasuries.

The notes priced at 99.881 to yield 1.916%.

Deutsche Bank Securities Inc. was the lead manager.

The financial services company is based in Frankfurt.

Citi prices tight

Citigroup Inc. was in Tuesday’s market with a $2 billion sale of five-year senior notes sold with a spread of Treasuries plus 95 bps, an informed source said.

The notes (Baa2/A-/A) priced at the tight end of talk, which was set in the 98 bps area over Treasuries.

Pricing was at 99.78 to yield 2.447%.

Citigroup Global Markets Inc. was the bookrunner.

The bank is based in New York.

Ally new issue

Ally Financial sold $1.25 billion of senior notes (/BB+/) on Tuesday in tranches due 2018 and 2022, according to an informed source.

The offering included $600 million of 3.25% notes due 2018 priced at 99.294 to yield 3.5%, or Treasuries plus 246.7 bps.

The tranche came tighter than price talk, which had been set in the 3 5/8% area after tightening from earlier guidance of 3 5/8% to 3.75%.

The company also priced $650 million of 4.125% seven-year notes at 98.506 to yield 4.375%, or 255.6 bps over Treasuries.

The notes sold at the tight end of talk set in the 4.5% area having tightened from earlier guidance set at 4.625% to 4.75%.

BofA Merrill Lynch, Citigroup Global Markets, Goldman Sachs and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to fund tender offers for up to $750 million of the company’s 8% senior notes due 2020 and 7.5% senior notes due 2020 and $150 million of its 8% senior notes due 2031.

Ally is a Detroit-based auto financing company.

Lazard 10-years

Lazard Group sold $400 million of senior notes (BBB+/BBB) due 2025 on Tuesday at 180 bps over Treasuries, according to a market source.

The notes sold at the tight end of price talk set at 180 bps to 185 bps over Treasuries.

Citigroup Global Markets and Goldman Sachs were the joint bookrunners.

Proceeds will be used to help redeem $450 million of the company’s 6.85% senior notes due 2017.

New York-based Lazard Group provides financial advisory and asset management services.

Affiliated Managers upsizes

Affiliated Managers Group sold an upsized $350 million of 3.5% 10-year senior notes (A3/BBB+/) during Tuesday’s session with a spread of Treasuries plus 160 bps, according to an informed source.

Pricing was at 99.239 to yield 3.588%.

BofA Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., MUFG, RBC Capital Markets LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to repay borrowings on the company’s revolving credit facility, with any remaining proceeds to be used for general corporate purposes.

Affiliated Managers is a Prides Crossing, Mass.-based asset management company.

Third Point senior notes

Third Point Re (USA), a wholly owned subsidiary of Third Point Reinsurance Ltd., sold $115 million of 7% senior notes due 2025, according to a company press release.

Proceeds will be used to partially finance the capitalization of wholly owned subsidiary Third Point Reinsurance (USA) Ltd.

Deutsche Bank Securities and Credit Suisse Securities (USA) LLC were the bookrunners.

The notes will be fully and unconditionally guaranteed by Third Point Reinsurance Ltd.

Third Point is a Bermuda-based provider of specialty property and casualty reinsurance products.

AT&T mixed

AT&T’s 3.9% notes due 2024 firmed 2 bps to 140 bps bid in secondary trading, a source said.

The issue priced in a $1 billion offering on March 5 at a spread of Treasuries plus 125 bps.

AT&T’s 4.8% bonds due 2044 eased 6 bps to the 210 bps area, the source said.

AT&T sold $2 billion of the notes on June 3, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in Dallas.

Verizon unchanged

Elsewhere in the telecommunications sector, Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) were flat at 132 bps bid, a market source said.

The company 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 eases

Apple’s 3.45% notes due 2024 eased 5 bps in secondary trading to 75 bps bid, according to a market source.

Apple sold $2.5 billion of the notes (Aa1/AA+/) on April 29, 2014 at Treasuries plus 77 bps.

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

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