EOG Resources, ACE, TTX, Entergy unit among high-grade players; Home Depot, Wal-Mart narrow

By Andrea Heisinger and Cristal Cody

New York, Nov. 18 - ACE INA Holdings Inc., EOG Resources, Inc., TTX Co. and Entergy Louisiana, LLC were the companies tapping the investment-grade debt market on Thursday.

The largest sale of the day came from EOG Resources. It took a while to price after a tranche of floating-rate notes was added on strong demand. The deal totaled $1.5 billion in three tranches, and the size was "able to grow slightly," a source close to the trade said late in the day.

ACE upsized its guaranteed five-year notes to $700 million from $500 million. The notes were priced at the tight end of guidance.

Another of the day's trades from Entergy Louisiana was upsized slightly after going overnight. The utility priced $150 million of retail mortgage bonds due 2041 after announcing the size the previous day at $100 million.

TTX sold $150 million of 30-year bonds under Rule 144A by mid-afternoon.

Friday's primary is expected to be mostly quiet although the market tone had improved by late Thursday.

"I wouldn't be surprised if we see something, but I think we're mostly done for the week," a source said.

Overall investment-grade Trace volume dropped 5% to about $11.5 billion, according to a source.

Secondary markets were mostly positive, according to sources.

"Homebuilders, building materials are up about a quarter," a trader said.

Home Depot, Inc.'s 5.4% notes due 2016 (Baa1/BBB/) traded 3 bps tighter at 112 bps on Thursday from the previous day, a source said.

The home improvement retailer is based in Atlanta.

Two tranches of notes that Wal-Mart Stores Inc. sold in October tightened in trading, a source said.

The Markit CDX Series 14 North American investment-grade index firmed 2 bps to a spread of 91 bps, according to Markit Group Ltd.

Government debt fell on Thursday on news that Ireland may receive a bailout bank package and on economic data.

"Treasury securities moved lower among mid-dated issues, but were mostly unchanged at the short- and long-term end of the spectrum," a source said.

The yield on the 10-year note rose 1 basis point to 2.89%. The 30-year bond yield fell 1 bp to 4.28%.

EOG's $1.5 billion sale

EOG Resources priced $1.5 billion of senior notes (A3/A-) in three parts late in the day, according to a source who worked on the trade.

The deal had been announced in tranches of five- and 10-year notes early in the day. A three-year maturity was added on reverse demand.

Those $350 million of three-year floating-rate notes priced at par to yield Libor plus 75 bps.

A $400 million tranche of 2.5% notes due 2016 was priced at a spread of Treasuries plus 105 bps. The notes priced in line with guidance in the 105 bps area, a source said.

The second tranche of fixed-rate notes was $750 million of 4.1% notes due 2021 priced at 125 bps over Treasuries. These notes also priced in line with guidance in the 125 bps area.

Bookrunners were Barclays Capital Inc., Bank of America Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

Proceeds are being used for general corporate purposes, including the repayment of commercial paper and the funding of future capital expenditures.

There was more than $2.3 billion on the books just for the maturities of 2016 and 2021, the source said. There were 124 players, with one account buying all of the floaters.

"There was a large reverse," the source said of the decision to add the three-year notes. "There was one guy that was interested and the issuer was open. It worked."

There was nearly twice as much interest in the 10-year tranche with $1.5 billion on the books, compared to $800 million for the notes due 2016.

The 10-year notes have regained some stability after a poor Treasury auction of that maturity in recent weeks.

"The 10-year is back up and that hits a lot of targets for guys," the source said.

The oil and natural gas company is based in Houston.

ACE INA upsizes deal

ACE INA Holdings priced an upsized $700 million of 5.875% five-year senior notes (A3/A-) to yield Treasuries plus 108 bps, a source who worked on the sale said.

The size was increased from the $500 million announced early in the day. The notes were sold at the tight end of guidance in the 110 bps area.

The securities are guaranteed by parent company ACE Ltd.

Bookrunners were Morgan Stanley & Co. Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay debt and for general corporate purposes.

The issuer is an indirect subsidiary of insurance and reinsurance company ACE, based in Zurich, Switzerland.

Entergy unit's mortgage bonds

Entergy Louisiana priced an upsized $150 million, or 6 million, of 5.875% first mortgage bonds (A3/A-) at par of $25, an informed source said.

A source said on Wednesday that the size was at $100 million but would likely grow.

Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are going to be used for general corporate purposes.

The utility is based in Baton Rouge, La.

TTX's $150 million

Chicago-based TTX priced $150 million of 5.875% 30-year bonds on Thursday at a spread of 162.5 basis points over Treasuries, a source close to the trade said.

The notes priced in line with guidance in the 162.5 bps area.

The bonds (Baa1/A+) were sold at 99.203 to yield 5.932%. They have a make-whole call at Treasuries plus 25 bps.

Citigroup Global Markets Inc. and Credit Suisse Securities USA LLC ran the books.

The bonds were sold under Rule 144A.

The issuer is a railcar and freight services provider.

Wal-Mart tighter

In the secondary market, Wal-Mart Stores' senior unsecured notes sold in October narrowed in trading, a source said.

The 3.25% notes due 2020 (Aa2/AA/) traded at 80 bps Thursday afternoon. The notes priced on Oct. 18 at a spread of 78 bps over Treasuries.

Wal-Mart's 5% bonds due 2040 (Aa2/AA/) were stronger at 95 bps. The bonds priced at 115 bps over Treasuries.

Wal-Mart sold the debt on Oct. 18.

The discount retailer is based in Bentonville, Ark.

© 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.