Published on 5/1/2017 in the Prospect News Investment Grade Daily.
New Issue: United Technologies prices $4 billion fixed-rate senior notes in five tranches
By Cristal Cody
Tupelo, Miss., May 1 – United Technologies Corp. sold $4 billion of fixed-rate senior notes (A3/A-/A-) in five tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company dropped a tranche of floating-rate notes from the final deal.
In the first tranche, United Technologies priced $1 billion of 1.9% three-year notes at 99.951 to yield 1.917% and a spread of Treasuries plus 45 basis points.
The company sold $500 million of 2.3% five-year notes at 99.779 to yield 2.347%, or Treasuries plus 50 bps.
United Technologies placed $800 million of 2.8% seven-year notes at 99.792 to yield 2.833%. The notes priced with a spread of 70 bps over Treasuries.
The $1.1 billion tranche of 3.125% 10-year notes priced at par to yield a spread of Treasuries plus 80 bps.
In the final tranche, the company sold $600 million of 4.05% 30-year notes at 99.724 to yield 4.066%, or Treasuries plus 105 bps.
The tranches all priced on the tight side of guidance.
BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, RBC Capital Markets Corp. and Wells Fargo Securities LLC were the bookrunners.
Proceeds will be used to repay at maturity the company’s $1.5 billion 1.8% notes due June 1, 2017, to repay commercial paper and for general corporate purposes.
United Technologies is a Hartford, Conn.-based company that provides technology products and services to the building and aerospace industries.
| Issuer: | United Technologies Corp.
|
| Amount: | $4 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, RBC Capital Markets Corp. and Wells Fargo Securities LLC
|
| Lead managers: | Barclays, BNY Mellon Capital Markets, LLC, Commerz Markets LLC, MUFG, SMBC Nikko Securities America, Inc., Standard Chartered Bank and UniCredit Capital Markets LLC
|
| Senior co-managers: | Williams Capital Group LP, Santander Investment Securities Inc. and SG Americas Securities, LLC
|
| Co-managers: | BMO Capital Markets Corp., ICBC Standard Bank plc, Lebenthal & Co., LLC and Loop Capital Markets LLC
|
| Trade date: | May 1
|
| Settlement date: | May 4
|
| Ratings: | Moody’s: A3
|
| S&P: A-
|
| Fitch: A-
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $1 billion
|
| Maturity: | May 4, 2020
|
| Coupon: | 1.9%
|
| Price: | 99.951
|
| Yield: | 1.917%
|
| Spread: | Treasuries plus 45 bps
|
| Price guidance: | Treasuries plus 50 bps area, plus or minus 5 bps
|
| Call feature: | Make-whole call at Treasuries plus 7.5 bps
|
|
|
| Five-year notes
|
| Amount: | $500 million
|
| Maturity: | May 4, 2022
|
| Coupon: | 2.3%
|
| Price: | 99.779
|
| Yield: | 2.347%
|
| Spread: | Treasuries plus 50 bps
|
| Price guidance: | Treasuries plus 55 bps area, plus or minus 5 bps
|
| Call features: | Make-whole call before April 4, 2022 at Treasuries plus 10 bps; at par thereafter
|
|
|
| Seven-year notes
|
| Amount: | $800 million
|
| Maturity: | May 4, 2024
|
| Coupon: | 2.8%
|
| Price: | 99.792
|
| Yield: | 2.833%
|
| Spread: | Treasuries plus 70 bps
|
| Price guidance: | Treasuries plus 75 bps area, plus or minus 5 bps
|
| Call features: | Make-whole call before March 4, 2024 at Treasuries plus 12.5 bps; at par thereafter
|
|
|
| 10-year notes
|
| Amount: | $1.1 billion
|
| Maturity: | May 4, 2027
|
| Coupon: | 3.125%
|
| Price: | Par
|
| Yield: | 3.125%
|
| Spread: | Treasuries plus 80 bps
|
| Price guidance: | Treasuries plus 85 bps area, plus or minus 5 bps
|
| Call features: | Make-whole call before Feb. 4, 2027 at Treasuries plus 15 bps; at par thereafter
|
|
|
| 30-year notes
|
| Amount: | $600 million
|
| Maturity: | May 4, 2047
|
| Coupon: | 4.05%
|
| Price: | 99.724
|
| Yield: | 4.066%
|
| Spread: | Treasuries plus 105 bps
|
| Price guidance: | Treasuries plus 110 bps area, plus or minus 5 bps
|
| Call features: | Make-whole call before Nov. 4, 2046 at Treasuries plus 20 bps; at par thereafter
|
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