Reynolds American does $9 billion megadeal; Verizon, AT&T wider; Barclays soft

By Aleesia Forni and Cristal Cody

Virginia Beach, June 9 – Reynolds American Inc. priced a $9 billion bond offering to help finance a planned acquisition amidst a continued volatile market backdrop on Tuesday.

The new issue joins the flurry of acquisition financings the investment-grade primary has hosted so far this year and comes on the heels of Exelon Corp.’s $4.2 billion deal priced on Monday to fund its Pepco Holdings, Inc. merger.

Reynolds’ jumbo offering was joined on Tuesday by Dominion Resources Inc., Southern Co., DTE Energy Co. and Pacific Gas & Electric Co.

Also on Tuesday, KfW sold $4 billion of global notes, while Inter-American Development Bank sold a $2.25 billion five-year issue.

Germany’s Erste Abwicklungsanstalt joined the forward calendar on Tuesday, announcing price talk for a planned two-year notes offering.

Already the week has hosted roughly $22.7 billion of new high-grade paper, closing in on what was predicted to be around a $25 billion to $30 billion week.

Bonds from Verizon Communications Inc., which plans to acquire AOL Inc. for $4.4 billion, traded weaker over the day.

AT&T Inc.’s bonds (/BBB+/A-) headed out mostly softer.

Barclays plc’s 2.875% senior notes due 2020 eased 3 basis points in the secondary market.

Citigroup Inc.’s 3.3% senior notes due 2025 were unchanged on the bid side.

Goldman Sachs Group Inc.’s 3.5% notes due 2025 were flat.

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