MassMutual, Horace Mann price as market focuses on Fed minutes; Time Warner bonds mixed

By Aleesia Forni

New York, Nov. 18 – MassMutual Global Funding II and Horace Mann Educators Corp. were among the issuers during a slower session as the high-grade bond market calmed for the release of the Federal Reserve’s October meeting minutes.

A source noted that at its largest, the order book for MassMutual’s new $650 million offering was more than two times oversubscribed.

The primary also hosted a $250 million 10-year offering from Horace Mann that sold at the tight side of initial price thoughts.

Meanwhile, spreads in the secondary market were improved over the course of Wednesday’s trading.

The Markit CDX North American Investment Grade 25 index was 2 basis points tighter at a spread of 81 bps.

Time Warner Inc.’s bonds were mixed following its upsized $900 million sale that priced in new and reopened tranches on Tuesday.

And bank and financial names were around 1 bp to 2 bps tighter on the day overall, though Barclays plc’ 5.25% notes due 2045 were again weaker on Wednesday, trading around 8 bps wide of levels seen late Tuesday.

MassMutual new issue

MassMutual Global Funding priced $650 million of 2.45% five-year funding agreement-backed notes (Aa2/AA+/AA+) at Treasuries plus 80 bps, according to an informed source.

Pricing was at 99.888 to yield 2.474%.

The Rule 144A and Regulation S notes sold at the tight end of talk set in the Treasuries plus 83 bps area.

Bookrunners were Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

The issuing unit of Massachusetts Mutual Life Insurance Co. is based in Springfield, Mass.

Horace Mann 10-years

Horace Mann Educators sold $250 million of 4.5% 10-year senior notes (Baa3/BBB/BBB) at Treasuries plus 225 bps on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.735 to yield 4.533%.

Guidance was set in the mid-200 bps area over Treasuries.

Bookrunners are J.P. Morgan Securities LLC and Keefe, Bruyette & Woods.

The Springfield, Ill., insurance company said the proceeds will be used to redeem or repay outstanding debt, including its 6.85% senior notes due April 15, 2016 and borrowings under a bank credit facility, as well as for general corporate purposes.

LegacyTexas notes price

Also on Wednesday, LegacyTexas Financial Group Inc. sold $75 million of fixed-to-floating rate subordinated notes (Kroll: BBB) due Dec. 1, 2025 at par with a spread of Treasuries plus 322.9 bps, according to an FWP filed with the SEC.

The notes will bear interest at 5.5% until Dec. 1, 2020, after which the interest rate will be equal to Libor plus 389 bps.

Interest will be payable semiannually until Dec. 1, 2020, after which interest will be payable quarterly until maturity.

Sandler O’Neill + Partners LP and U.S. Bancorp Investments Inc. are the lead managers.

The Plano, Texas-based holding company for LegacyTexas Bank plans to use the proceeds from this offering for general corporate purposes, potential strategic acquisitions and investments in LegacyTexas Bank as regulatory capital.

Time Warner better

In the secondary market, Time Warner’s 4.85% debentures (Baa2/BBB/BBB+) due 2045 were 1 bp wider early Wednesday compared to Tuesday’s close at 200 bps bid, 197 bps offered, a market source said.

The company sold a $300 million tap of the issue on Tuesday at Treasuries plus 200 bps. The original $600 million of the debentures priced in a May 28 offering at Treasuries plus 195 bps.

Its $600 million tranche of 3.875% notes due Jan. 15, 2026, which sold at 162.5 bps over Treasuries on Tuesday, was quoted at 161 bps offered.

Time Warner is a media company based in New York.

Barclays wider

Barclays’ 5.25% notes due 2045 eased 8 bp to 207 bps bid in the secondary market on Wednesday, a source said.

Barclays sold $1.5 billion of the bonds (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

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