WEA, John Deere, 21st Century enter primary; AngloGold Ashanti mostly better; spreads narrow

By Cristal Cody and Aleesia Forni

Virginia Beach, Sept. 10 – WEA Finance LLC, John Deere Capital Corp., 21st Century Fox America Inc. and European Bank for Reconstruction and Development issued new bonds on Wednesday, pushing the week’s total supply past the $20 billion mark.

The largest offering of the session was priced by WEA Finance and Westfield UK & Europe Finance plc, which priced $3.5 billion of senior notes.

All four tranches of the deal sold at the tight end of price talk, which had firmed around 10 basis points from initial guidance.

There was also a $1.25 billion three-part issue priced by John Deere Capital on Wednesday.

A source noted that the deal’s orderbook was nearly two times oversubscribed.

Meanwhile, 21st Century Fox priced a $1.2 billion offering of senior notes in two tranches during the session.

The European Bank for Reconstruction and Development (EBRD) came to market with a $225 million tap of its existing notes due 2019.

In forward calendar news, Federal Home Loan Banks announced plans to bring to market an add-on to its 0.5% global notes due 2016.

So far, this week has seen roughly $21.2 billion of new issuance.

Even with the onslaught of supply the market has seen this month and growing signs of investor fatigue, the pace of issuance in the primary market is expected to continue in the coming sessions.

One source quipped that the deluge of deals is “not over yet.”

In other pricing action, Telus Corp. brought C$1.2 billion of notes (Baa1/BBB+/DBRS: A) in a two-part offering in the Canadian and U.S. markets, according to an informed source.

The Vancouver, B.C. based telecommunications company sold C$800 million of 3.75% series CQ notes due Jan. 17, 2025 with a spread of 155 bps versus the interpolated Government of Canada bond curve.

In the second tranche, Telus priced C$400 million of 4.75% series CR notes due Jan. 17, 2045 at 207 bps over the government curve.

RBC Dominion Securities Inc., BMO Nesbitt Burns Inc. and CIBC World Markets Inc. were the lead managers.

In secondary activity over the session, AngloGold Ashanti Ltd.’s bonds priced through its financing arm, AngloGold Ashanti Holdings plc, traded mostly better, a trader said.

AngloGold Ashanti announced in a release that it plans to offer a $2.1 billion rights issue and spin off its international mining operations into a new company.

High-grade credit spreads improved over the day after softening in the first part of the week, market sources said.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 58 bps.

WEA four-parter

WEA Finance and Westfield UK & Europe Finance priced $3.5 billion of senior notes (A3/BBB+/) in tranches due 2017, 2019, 2024 and 2044, all at the tight end of talk, a market source said.

A $750 million tranche of 1.75% three-year notes priced at 99.971 to yield 1.76%, or Treasuries plus 70 bps.

There was also $1.25 billion of 2.7% five-year notes sold at 99.8 to yield 2.743%, or Treasuries plus 95 bps.

A third tranche was $1 billion of 3.75% 10-year notes priced with a spread of Treasuries plus 125 bps.

The notes sold at 99.628 to yield 3.764%.

The sale also included $500 million of 4.75% bonds due 2044 priced at 99.683 to yield 4.765%, or Treasuries plus 150 bps.

The notes were priced under Rule 144A and Regulation S.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the bookrunners.

The unit of retail property owner and operator Westfield Group is based in Sydney, Australia.

John Deere’s $1.25 billion

John Deere Capital priced $1.25 billion of senior notes (A2/A/) on Wednesday in three tranches, a market source said.

There was a $250 million tranche of floating-rate notes due 2017 priced at par to yield Libor plus 22 bps and a $500 million tranche of 1.55% notes due 2017 priced at 99.976 to yield 1.557%, or Treasuries plus 50 bps.

The company sold $500 million of 2.3% five-year notes at 99.944 to yield 2.312%.

The notes sold with a spread of Treasuries plus 53 bps.

The bookrunners were Citigroup Global Markets, Goldman Sachs & Co. and HSBC Securities (USA) Inc.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

21st Century new issue

21st Century Fox America, a wholly owned subsidiary of Twenty-First Century Fox, Inc., priced $1.2 billion of senior notes in two tranches on Wednesday, according to a company news release.

The sale included $600 million of 3.7% notes due 2024 and $600 million of 4.75% senior notes due 2044.

The sale was done via Rule 144A and Regulation S.

Full details of the offering were not available at press time.

The mass media company is based in New York.

ERBD adds on

The European Bank for Reconstruction and Development (EBRD) priced a $225 million add-on to its existing 1.75% notes (Aaa/AAA/AAA) due June 14, 2019 at 99.61 to yield mid-swaps minus 2 bps, according to a market source.

BNP Paribas Securities Corp., Credit Suisse Securities and HSBC Securities were the bookrunners.

Total issue size is now $1,475,000,000, including $1.25 billion priced in two previous tranches.

The lender to banks, businesses and industries is based in London.

FHLB on deck

Federal Home Loan Banks is planning to price a $1.5 billion tap of its existing 0.5% global notes due Sept. 28, 2016, according to a market source.

The original $3 billion of two-year bonds priced at Treasuries plus 15 bps on Aug. 6 at the tight end of price talk.

FHLBanks are 12 government-sponsored funding providers.

AngloGold Ashanti gains

AngloGold Ashanti’s bonds (Baa3/BB+/) were active in secondary trading over Wednesday’s session, a trader said.

The company’s 5.375% notes due 2020 climbed to 102.75 bid, 103.25 offered versus where the notes traded on Tuesday at 100.75 bid, 101.75 offered.

AngloGold Ashanti sold $700 million of the notes on April 21, 2010 at 99.85.

The company’s 6.5% notes due 2040 climbed to 99.50 bid, 100.5 offered from 94.5 bid, 96.5 offered in the previous session, the trader said.

The issue priced in a $300 million offering in the April 21, 2010 transaction at 98.435.

AngloGold Ashanti’s 5.125% notes due 2022 headed out better at 99 bid, par offered from 97.5 bid, 98.5 offered on Tuesday, the trader said.

The notes priced in a $750 million offering on July 25, 2012 at 99.398 to yield 5.203%.

The company’s tranche of 8.5% notes due 2020 was among the exception and traded lower over the session.

The 8.5% notes due 2020 headed out at 111.75 bid, 112.25 offered, down from 112.25 bid, 113 offered on Tuesday, the trader said.

AngloGold Ashanti sold $1.25 billion of the notes on July 25, 2013 at par.

The gold mining company is based in Johannesburg.

Bank/broker CDSs flat to lower

Investment-grade bank and brokerage CDS prices were flat to lower on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs were 1 bp lower at 67 bps bid, 70 bps offered. Citigroup Inc.’s CDS costs were flat at 66 bps bid, 69 bps offered. JPMorgan Chase & Co.’s CDS costs were 1 bp lower at 53 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs ended unchanged at 40 bps bid, 45 bps offered.

Merrill Lynch’s CDS costs decreased 1 bp to 69 bps bid, 73 bps offered. Morgan Stanley’s CDS costs ended 2 bps lower at 74 bps bid, 77 bps offered. Goldman Sachs Group, Inc.’s CDS costs were flat at 78 bps bid, 81 bps offered.

Paul Deckelman contributed to this review.

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