NAB, Williams, NRW.Bank join Entergy subsidiaries in primary; Entergy Gulf firms; Williams mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, June 24 – Activity in the high-grade primary remained measured on Tuesday, though the session did see new deals price from National Australia Bank and Williams Partners LP.

National Australia’s new deal was nearly two times oversubscribed, a source said, and the deal sold tight of price guidance.

A pair of subsidiaries of Entergy Corp. – Entergy Gulf States Louisiana LLC and Entergy Louisiana LLC – also headed to Tuesday’s primary market with offerings of first mortgage bonds.

There was also a new issue from NRW.Bank, which priced a $500 million offering of five-year notes.

With around $4 billion of new issuance, Tuesday’s activity brings the week’s total supply to $7.15 billion.

Sources have predicted around $15 billion to $20 billion of new high-grade issuance for the final full week of June.

“Very light calendar this week,” a source said.

Entergy Gulf States Louisiana’s 3.78% first mortgage bonds due 2025 tightened 2 basis points in aftermarket trading, a trader said.

No secondary trading was seen as the session closed in Entergy Louisiana’s mortgage bonds, a trader said.

Williams Partners’ two tranches of notes traded wrapped around issuance to 2 bps wider on the bid side in the secondary market, according to a trader.

After hitting a 52-week low on Monday, the Markit CDX North American Investment Grade series 22 index eased 1 bp to a spread of 57 bps on Tuesday, a source said.

NAB prices tight

The largest sale of Tuesday’s session was from National Australia Bank, which sold a $2.1 billion three-part offering of senior notes (Aa2/AA-/AA-), a market source said.

The sale included $850 million of floating-rate notes due 2017 priced at par to yield Libor plus 28 bps.

A $500 million tranche of 1.3% three-year notes sold at 99.918 to yield 1.328%, or Treasuries plus 40 bps.

There was also a $750 million tranche of 2.25% five-year notes sold at 99.911 to yield 2.269%, or Treasuries plus 60 bps.

The notes sold tight of guidance.

National Australia Bank, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and BofA Merrill Lynch were the joint bookrunners for the Rule 144A and Regulation S deal.

Melbourne, Australia-based National Australia Bank is the nation's largest lender.

Williams two-parter

Williams Partners sold $1.25 billion of senior notes (Baa2/BBB/BBB) in a two-tranche offering on Tuesday, according to a market source.

There was $750 million of 3.9% 10.5-year notes priced at 99.69 to yield 3.936%, or Treasuries plus 135 bps.

A second tranche was $500 million of 4.9% 30.5-year notes priced at 99.229 to yield 4.949%, or Treasuries plus 155 bps.

Williams Partners’ 3.9% notes due 2025 traded unchanged on the bid side at 135 bps bid, 133 bps offered, a trader said.

The 4.9% notes due 2045 eased in secondary trading to 157 bps bid, 153 bps offered.

The bookrunners were Credit Agricole Securities (USA) Inc., JPMorgan and RBS Securities Inc.

Proceeds will be used to repay amounts outstanding under the company’s commercial paper program, to fund capital expenditures and for general partnership purposes.

Tulsa, Okla.-based Williams finds, produces, gathers, processes and transports natural gas.

NRW.Bank five-years

NRW.Bank priced $500 million of 1.875% five-year notes (Aa1/AA-/) on Tuesday at 99.506 to yield 1.97%, or mid-swaps plus 17 bps, an informed source said.

The joint bookrunners were BofA Merrill Lynch, Credit Suisse Securities and Deutsche Bank Securities Inc.

The financial development products and services company is based in Dusseldorf, Germany.

Entergy Gulf mortgage bonds

Entergy Gulf States Louisiana priced $110 million of 3.78% first mortgage bonds (A2/A-/) due April 1, 2025 with a spread of Treasuries plus 120 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.917 to yield 3.79%.

Entergy Gulf States Louisiana’s 3.78% first mortgage bonds due 2025 firmed to 118 bps bid, a trader said.

Proceeds will be used to reestablish and replenish the company’s storm damage escrow reserves and for general corporate purposes.

Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Mizuho Securities USA Inc. and Scotia Capital (USA) Inc. were the joint bookrunners.

The electric power subsidiary of Entergy Corp. is based in Baton Rouge, La.

Entergy Louisiana’s $190 million

Also on Tuesday, Entergy Louisiana priced $190 million of 3.78% first mortgage bonds (A2/A-/) due April 1, 2025 on Tuesday with a spread of Treasuries plus 120 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.917 to yield 3.79%.

Proceeds will be used to re-establish and replenish the company’s storm damage escrow reserves and for general corporate purposes.

Barclays, BNP Paribas Securities, Citigroup, Mizuho Securities and Scotia Capital were the joint bookrunners.

Entergy Louisiana is a Jefferson, La.-based energy provider.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.’s CDS costs eased 1 bp to 61 bps bid, 64 bps offered. Citigroup Inc.’s CDS costs rose 1 bp to 60 bps bid, 63 bps offered. JPMorgan Chase & Co.’s CDS costs eased 1 bp to 50 bps bid, 53 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 37 bps bid, 40 bps offered.

Merrill Lynch’s CDS costs eased 1 bp to 64 bps bid, 67 bps offered. Morgan Stanley’s CDS costs widened 1 bp to 61 bps bid, 64 bps offered. Goldman Sachs Group, Inc.’s CDS costs rose 1 bp to 65 bps bid, 68 bps offered.

Paul Deckelman contributed to this review.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.