L3 Technologies, SoCal Edison, Dominion Energy price bonds; credit spreads tighten

By Cristal Cody

Tupelo, Miss., May 30 – The high-grade bond market rebounded on Wednesday with deals priced on the tight side of initial talk and improved credit spreads.

L3 Technologies, Inc. brought $1.8 billion of senior notes in two tranches.

Southern California Edison Co. priced $650 million of first and refunding mortgage bonds in new and reopened issues.

Dominion Energy, Inc. sold $300 million of 10-year senior notes.

MetLife Inc. also was selling an upsized $700 million of $25-par preferred shares that launched with a 5.625% dividend, a source said.

The Markit CDX North American Investment Grade 30 index tightened about 2.5 basis points to a spread of 65 bps after widening about 6 bps in the previous session.

The primary market was quiet on Tuesday in a risk-off trade after the markets were closed Monday for the Memorial Day holiday. Syndicate sources forecast about $20 billion of volume for the week.

In the secondary market, Barclays plc’s paper was mixed, but the company’s paper has widened since Friday, a source said.

Barclays’ 4.972% fixed-to-floating rate notes due May 16, 2029 firmed about 3 bps on the day to 225 bps bid.

The notes were quoted on Friday in the 207 bps area.

Barclays (A2/A/A) sold $1.75 billion of the 11-year notes on May 9 at par to yield a Treasuries plus 197 bps spread.

Reports emerged last week that the London-based banking and financial services company is considering a merger with Standard Chartered plc.

Other bank and financial paper was mixed and traded mostly flat on the day.

L3 sells $1.8 billion

L3 Technologies priced $1.8 billion of senior notes (Baa3/BBB-/BBB-) in two tranches on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The $800 million tranche of 3.85% five-year notes priced at 99.804 to yield 3.893%, or a Treasuries plus 122 bps spread. The notes were initially talked to price in the Treasuries plus 125 bps to 130 bps area.

LT Technologies placed the $1 billion of 4.4% 10-year notes at 99.902 to yield 4.412% and a spread of 157 bps over Treasuries. Initial price talk on the notes was in the Treasuries plus 160 bps to 165 bps area.

Barclays, BofA Merrill Lynch, SunTrust Robinson Humphrey Inc., Deutsche Bank Securities Inc., MUFG, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the bookrunners.

L3 Technologies, formerly known as L-3 Communications Holdings, Inc., is a New York-based aerospace systems contractor and a provider of communication and electronic systems and products used on military and commercial platforms.

SoCal Edison prices

Southern California Edison sold $650 million of first and refunding mortgage bonds (Aa3/A/A+) in two tranches on Wednesday, according to a market source and FWP filings with the SEC.

The company sold $300 million of new 3.4% five-year bonds at 99.896 to yield 3.423%, or a spread of Treasuries plus 75 bps. Initial price talk on the notes was in the Treasuries plus 85 bps to 90 bps area.

Southern California Edison priced a $350 million tap of its 4.125% series 2018C first and refunding mortgage bonds due March 1, 2048 at 96.829 to yield 4.315%, or a Treasuries plus 130 bps spread. The notes were initially talked to price in the Treasuries plus 140 bps to 145 bps area.

The company first sold $400 million of the 4.125% bonds on Feb. 28 at 99.812 to yield 4.136%, or a spread of Treasuries plus 100 bps. The total outstanding now is $750 million.

The bookrunners were Barclays, BNP Paribas Securities Corp., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and SunTrust Robinson Humphrey.

Southern California Edison is an electric utility company based in Rosemead, Calif.

Dominion Energy prints

Dominion Energy priced $300 million of 4.25% 10-year senior notes (Baa2/BBB/BBB+) on Wednesday at par to yield Treasuries plus 140 bps, according to an FWP filing with the SEC.

The notes were initially talked to price in the Treasuries plus 145 bps to 150 bps area, a source said.

BNP Paribas Securities and Scotia Capital were the bookrunners.

The producer and transporter of energy is based in Richmond, Va.

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