British American Tobacco sells $17.25 billion; Noble Energy, Oklahoma Gas, Eversource price

By Cristal Cody

Tupelo, Miss., Aug. 8 – BAT Capital Corp. priced $17.25 billion of dollar-denominated senior notes in eight tranches on Tuesday following parent company British American Tobacco plc’s roadshow on Monday.

The deal had a final book size of $34 billion.

Other issuers in the primary market on Tuesday included Noble Energy Inc., which priced $1.1 billion of notes in two parts.

Also, Vereit Operating Partnership LP upsized an offering of10-year guaranteed senior notes to $600 million.

In other energy deals during the session, Oklahoma Gas & Electric Co. priced $300 million of 30-year senior notes.

Connecticut Light and Power Co., doing business as Eversource Energy, reopened its 4.3% first and refunding mortgage due April 15, 2044 in a $225 million deal.

On Monday, high-grade companies priced nearly $15 billion of bonds.

Market sources expect issuance to be strong over the week with about $35 billion of total volume forecast.

The Markit CDX North American Investment Grade index eased about 1 basis point to end at a spread of 59 bps.

British Tobacco in primary

BAT Capital sold $17.25 billion of floating- and fixed-rate notes (Baa2/BBB+/) in the Rule 144A and Regulation S offering, according to a market source.

The company placed $1 billion of three-year floaters at Libor plus 59 bps.

The $2.25 billion tranche of 2.297% three-year fixed-rate notes priced with a Treasuries plus 80 bps spread.

BAT Capital priced $750 million of five-year floaters at Libor plus 88 bps.

The company sold $2.25 billion of 2.764% five-year fixed-rate notes at 95 bps over Treasuries.

BAT Capital placed $2.5 billion of 3.222% seven-year notes with a Treasuries plus 115 bps spread.

The $3.5 billion tranche of 3.557% 10-year notes priced with a Treasuries plus 130 bps spread.

BAT Capital also sold $2.5 billion of 4.39% 20-year notes with a 155 bps spread.

In the final tranche, the company priced $2.5 billion of 4.54% 30-year notes at 170 bps over Treasuries.

The fixed-rate notes all priced on the tight side of guidance.

BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. were the bookrunners.

British American Tobacco held roadshows on Monday and Tuesday. The company also is expected to price euro and/or sterling notes.

British American Tobacco in July announced the closing of its $49 billion acquisition of Reynolds American Inc.

The international tobacco company is based in London.

Noble sells $1.1 billion

Noble Energy priced $1.1 billion of notes (Baa3/BBB/BBB-) in two tranches on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

The company sold $600 million of 3.85% notes due Jan. 15, 2028 at 99.688 to yield 3.887% and a spread of Treasuries plus 160 bps.

Noble Energy priced $500 million of 4.95% notes due Aug. 15, 2047 at 99.643 to yield 4.973%. The bonds priced with a spread of 210 bps over Treasuries.

Citigroup Global Markets, J.P. Morgan Securities LLC, MUFG, DNB Markets Inc., BofA Merrill Lynch and Mizuho Securities USA Inc. were the bookrunners.

Proceeds will be used to purchase or redeem all of the company’s $1 billion of 8.25% senior notes due 2019 in a cash tender offer on Aug. 14.

The crude oil and natural gas exploration and production company is based in Houston.

Vereit upsizes

Vereit Operating Partnership sold an upsized $600 million of 3.95% 10-year guaranteed senior notes (Baa3/BBB-/BBB-) on Tuesday at 99.33 to yield 4.032%, according to an FWP filing with the SEC.

The notes priced with a spread of Treasuries plus 175 bps.

The deal was upsized from an initial $500 million offering.

J.P. Morgan Securities, BofA Merrill Lynch, Wells Fargo Securities LLC, Barclays, Capital One Securities, Inc., Citigroup Global Markets, Deutsche Bank Securities and U.S. Bancorp Investments, Inc. were the bookrunners.

The notes will be guaranteed by Vereit, Inc.

Proceeds will be used to repay borrowings, including swap termination costs and accrued and unpaid interest, under the company’s $500 million term loan facility due June 30, 2018.

Vereit is a Phoenix-based owner and manager of a portfolio of retail, restaurant, office and industrial real estate assets.

Oklahoma Gas & Electric prices

Oklahoma Gas & Electric priced $300 million of 3.85% senior notes due Aug. 15, 2047 (A1/A-/A+) on Tuesday at a spread of 100 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.682 to yield 3.868%.

Bookrunners were J.P. Morgan Securities, MUFG and U.S. Bancorp Investments.

Proceeds will be used for general corporate purposes, including the repayment of short-term debt and borrowings under the company’s revolving credit facility.

The electric utility is based in Oklahoma City.

Connecticut Light reopens

Connecticut Light and Power, doing business as Eversource Energy, priced a $225 million add-on to its 4.3% first and refunding mortgage bonds, 2014 series A, due April 15, 2044 on Tuesday, according to an FWP filing with the SEC.

The bonds (A2/A+/A+) priced at 109.749 to yield 3.714%, or a spread of 85 bps over Treasuries.

The company originally sold $250 million of the bonds on April 14, 2014 at par with a spread of 82 bps over Treasuries. The total outstanding now is $475 million.

Mizuho Securities and Wells Fargo Securities were the bookrunners.

Proceeds will be used to refinance short-term debt, for capital expenditures and for working capital needs.

The electric subsidiary of Northeast Utilities is based in Berlin, Conn.

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