BB&T, National Fuel, Corporate Office price; Marathon Oil, ConocoPhillips flat to tighter

By Aleesia Forni and Cristal Cody

Virginia Beach, June 22 – BB&T Corp., National Fuel Gas Co., Corporate Office Properties LP and Northern States Power Co. priced bonds on Monday, bringing roughly $1.76 billion of investment-grade paper to market.

“It was fairly quiet today,” one market source said, though he added that the market’s tone remained positive.

Sources are calling for around $25 billion of new issuance this week.

BB&T priced the day’s largest high-grade offering, issuing $1 billion of five-year notes at the tight end of price guidance.

A source noted that the deal’s order book reached $2 billion before closing at around $1.75 billion.

National Fuel Gas and Corporate Office Properties each sold upsized new bond offerings in line with price talk.

Meantime, Northern States Power was in the market with a $100 million add-on to its existing first mortgage bonds due June 15, 2024. The issue sold 20 basis points tight of initial price thoughts.

CoBiz Financial Inc. also sold a new offering on Monday, pricing $60 million of fixed-to-floating-rate subordinated notes due 2030.

Bonds traded mostly flat to modestly better over the day, while credit spreads tightened.

The Markit CDX North American Investment Grade series 23 index firmed 3 bps to a spread of 65 bps.

In the secondary market, Shell International Finance BV’s 2.125% notes due 2020 tightened 3 bps.

Marathon Oil Corp.’s senior notes (Baa1/BBB/) traded flat to about 1 bp tighter.

ConocoPhillips Co.’s senior notes (A1/A/) were seen unchanged to 2 bps better.

Southwestern Energy Co.’s 4.95% senior notes due 2025 headed out 4 bps softer in secondary trading but remain nearly 70 bps better than issuance.

BB&T sells $1 billion

BB&T sold $1 billion of 2.625% five-year medium-term senior notes, series E, on Monday at Treasuries plus 98 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes (A2/A-/A+) sold at 99.944 to yield 2.637%.

Pricing was at the tight end of the Treasuries plus 100 bps area, having tightened from initial talk set in the Treasuries plus 110 bps area.

Plans for a floating-rate tranche of five-year notes were dropped prior to the deal’s launch.

The joint bookrunners are BB&T Capital Markets LLC, Deutsche Bank Securities Inc. and Goldman Sachs & Co.

Proceeds will be used for general corporate purposes, including the acquisition of companies, the repurchase of outstanding common stock, the repayment of maturing obligations and the refinancing of outstanding debt as well as extending credit to, or funding investments in, subsidiaries.

The bank and financial services company is based in Winston-Salem, N.C.

National Fuel upsizes

Also on Monday, National Fuel Gas sold an upsized $450 million sale of 5.2% 10-year notes on Monday at 287.5 bps over Treasuries, according to an informed source and an FWP filing with the SEC.

The notes (Baa2/BBB/BBB+) were upsized from a planned $350 million.

Pricing was at 99.686 to yield 5.24%.

The deal sold on top of guidance, which was adjusted from initial talk set in the high-200 bps area over Treasuries.

BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the active bookrunners. HSBC Securities (USA) Inc. is a passive bookrunner.

Proceeds will be used for general corporate purposes, including to reduce short-term debt.

The diversified energy company is based in Williamsville, N.Y.

Corporate Office new issue

Corporate Office Properties sold an upsized $300 million offering of 5% 10-year senior notes (Baa3/BBB-/BBB) during Monday’s session at Treasuries plus 270 bps, according to a market source and an FWP filing with the SEC.

Pricing was at 99.51 to yield 5.063%.

The notes priced in line with price talk.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities are the bookrunners.

The bonds are guaranteed by Corporate Office Properties Trust.

Proceeds are being used to repay borrowings under the company's unsecured revolving credit facility and for general corporate purposes.

The real estate investment trust for suburban office properties is based in Columbia, Md.

Northern States add-on

Northern States Power priced a $100 million add-on to its existing 3.3% first mortgage bonds due June 15, 2024 at Treasuries plus 105 bps on Monday, according to a market source and an FWP filed with the SEC.

The notes (Aa3/A/A+) priced at 99.171 to yield 3.408%.

Pricing was at the tight end of guidance set in the 110 bps area over Treasuries. Initial talk was in the Treasuries plus 125 bps area.

The bookrunners are BofA Merrill Lynch and JPMorgan.

Proceeds from the offering will be used to repay short-term debt and for general corporate purposes.

The original $100 million issue of bonds sold with a spread of Treasuries plus 75 bps on June 16, 2014.

The electric and natural gas utility is based in Minneapolis.

CoBiz subordinated notes

CoBiz Financial priced $60 million of fixed-to-floating rate subordinated notes due 2030, according to a company release.

The notes will bear a fixed interest rate of 5.625% until June 25, 2025, and will then bear interest at a floating rate equal to three-month Libor plus 317 bps.

The notes priced at par.

The company plans to use the proceeds of the offering to redeem $57.4 million of its senior non-cumulative perpetual preferred stock, series C, currently held by the Department of Treasury as part of the company's participation in the Small Business Lending Fund program, and any remaining proceeds for general corporate purposes.

JPMorgan and Keefe, Bruyette & Woods are the underwriters.

Based in Denver, Cobiz Financial is a diversified financial holding company.

Pershing Square launches

In other primary happenings, Pershing Square Holdings, Ltd. announced the launch of its senior notes offering due 2022 in a company press release.

Deutsche Bank Securities and UBS Securities LLC are managing the sale, which will be done via Rule 144A and Regulation S.

Further details were unavailable at press time.

The net proceeds from the offering will be used to make investments or hold assets in accordance with the company’s investment policy, including by way of rebalancing transactions with other funds managed by Pershing Square Capital Management LP, as well as to fund operating expenses.

The investment company is based in New York.

Shell firms

Shell International Finance’s 2.125% notes due 2020 firmed 3 bps to 58 bps bid, a source said.

Shell sold $2 billion of the five-year notes (A1/AA/) on May 6 at a spread of Treasuries plus 60 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

Marathon Oil steady

Marathon Oil’s 3.85% notes due 2025 firmed about 1 bp to 178 bps bid in secondary trading over the day, a source said.

The company sold $900 million of the notes on June 1 at Treasuries plus 170 bps.

Marathon Oil’s 5.2% bonds due 2045 were unchanged at 225 bps bid.

Marathon Oil sold $500 million of the bonds on June 1 at a spread of Treasuries plus 225 bps.

The energy company is based in Houston.

ConocoPhillips mostly better

ConocoPhillips’ 2.2% notes due 2020 were flat in trading at 69 bps bid, according to a market source.

ConocoPhillips sold $500 million of the notes on May 13 at 65 bps plus Treasuries.

The company’s 3.35% notes due 2025 firmed 2 bps to 114 bps bid.

The notes were priced in a $500 million offering on May 13 at Treasuries plus 110 bps.

The energy company is based in Houston.

Southwestern Energy eases

Southwestern Energy’s 4.95% notes due 2025 eased 4 bps to 249 bps bid on Monday, according to a market source.

Southwestern Energy sold $1 billion of the notes (Baa3/BBB-/) on Jan. 20 at Treasuries plus 318 bps.

The independent natural gas and oil company is based in Houston.

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