GE sells $7 billion; NYSE Euronext, Darden price; CenturyLink postpones; GE notes firm

By Aleesia Forni and Andrea Heisinger

New York, Oct. 1 - The week of high-grade bond issuance started with a bang Monday as General Electric Co. sold a $7 billion multi-tranche deal - its first since 2007.

GE priced in tranches due 2015, 2022 and 2042. As of late morning, a syndicate source said there was about $19.5 billion on the books for the trade and by the time the deal priced there was about $25.5 billion in demand.

"A lot of guys appreciated the value of the name," the source said.

The sale from GE was the third largest of the year, following $9.8 billion sold by United Technologies Corp. on May 24 and a $7.5 billion deal from Anheuser Busch InBev Worldwide Inc. on July 11.

There also were a handful of smaller offerings in the market Monday.

NYSE Euronext sold $850 million of five-year notes.

Shopping center and commercial real estate developer Weingarten Realty Investors priced an upsized $300 million of 10-year notes.

Operator of restaurant chains Darden Restaurants, Inc. sold $450 million of 10-year paper and Western Massachusetts Electric Co. reopened an issue of 3.5% bonds due 2021 to add $150 million.

There was a crossover deal from CenturyLink, Inc. that was announced and then postponed. The deal is in two parts including a new 10-year note and reopening of bonds due in March of 2042.

A source away from the CenturyLink trade said market chatter was that the delay of the bond sale was less related to market conditions than to investor unease over recent headlines related to an acquisition.

Over the past weekend, news broke that CenturyLink was in talks to acquire TW Telecom.

"I think it was more credit related," the source said. "There was a lot of noise about the [possible] merger."

In the preferred stock market, Apollo Investment Corp. priced a $150 million deal of $25-par 30-year senior notes.

That company was joined by CoBank ACB, which sold $400 million of $100-par perpetual shares.

The week is expected to be more on the $20 billion end of the $15 billion to $20 billion of volume predicted for the week, a syndicate source said late in the day.

Tuesday's calendar is expected to be similar to Monday's in terms of the number of deals.

"It will be more junky names," a source said. "I know there are a few things floating around."

In secondary trading, the new notes from General Electric tightened 2 bps to 7 bps near the end of the session, while Weingarten's notes widened 2 bps.

Meanwhile, Darden's notes were seen at 170 bps offered.

Investment-grade bank and brokerage credit default swaps costs rose Thursday.

Bank of America's CDS costs widened 2 bps to 167 bps bid, 172 bps offered. Citi's CDS costs were 4 bps wider at 164 bps bid, 169 bps offered. J.P. Morgan's CDS costs widened 2 bps to 117 bps bid, 122 bps offered.

Merrill Lynch's CDS costs were 4 bps wider at 164 bps bid, 174 bps offered. Morgan Stanley's CDS costs rose 4 bps to 235 bps bid, 240 bps offered. Goldman Sachs' CDS costs widened 7 bps to 178 bps bid, 183 bps offered.

GE offers $7 billion

General Electric priced $7 billion of notes (Aa3/AA+/) in three tranches, a source close to the trade said.

The sale included $2 billion of 0.85% three-year notes priced a spread of Treasuries plus 55 bps. The notes were initially talked in the 67.5 bps over Treasuries area, with a margin of 2.5 bps, with revised guidance in the 55 bps to 65 bps range.

A $3 billion tranche of 2.7% 10-year notes sold at 110 bps over Treasuries. The notes were initially talked in the Treasuries plus 125 bps area, with revised guidance in the range of 110 bps to 120 bps.

And a $2 billion tranche of 4.125% 30-year bonds was priced at a spread of Treasuries plus 135 bps. The bonds were initially talked in the Treasuries plus 157.5 bps area and later revised to the 135 bps to 145 bps range.

The three-year tranche traded 2 bps better at 53 bps bid, while the 10-year notes were quoted 6 bps tighter at 104 bps bid.

The 30-year bonds were seen trading at 128 bps bid near the end of the session.

There was roughly $6.7 billion in demand for the three-year notes, $10.5 billion for the 10-year notes and $8.3 billion for the 30-year bonds, the source who worked on the trade said.

Active bookrunners were Barclays, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. The proceeds are being used to repay debt including all or a portion of $5 billion of 5% notes due in 2013 and for general corporate purposes.

GE was last in the market with a $4 billion trade of 5.25% 10-year notes priced on Nov. 29, 2007 at Treasuries plus 140 bps.

The technology and financial services company is based in Fairfield, Conn.

NYSE Euronext's five-year

NYSE Euronext sold $850 million of 2% five-year senior notes (A3/A+/) at Treasuries plus 145 bps, an informed source said.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and SG Americas Securities LLC were bookrunners.

The proceeds are being used to fund the purchase of $750 million of notes due 2013 in a tender offer and retire at maturity any 2013 notes not purchased in the tender offer. Any remainder will be used to fund the purchase of up to €250 notes due 2015 in a tender offer, for the payment of tender offer expenses and for general corporate purposes.

NYSE Euronext last priced a deal in the U.S. bond market on May 21, 2008 when it priced $750 million of 4.8% five-year notes at 178 bps over Treasuries.

The global markets operator and provider of trading technology to the financial services industry is based in New York City.

Darden sells $450 million

Darden Restaurants sold an upsized $450 million of 3.35% 10-year senior notes (Baa2/BBB/BBB) to yield 175 bps over Treasuries, a source away from the trade said.

The notes were sold tighter than guidance in the 200 bps area. The size of the offering was upsized from $300 million.

Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. were active bookrunners.

The proceeds are being used for general corporate purposes including repayment of 5.625% notes due in October and to repay short-term debt.

The full service restaurant owner and operator is based in Orlando.

Weingarten upsizes

Weingarten Realty Investors priced an upsized $300 million sale of 3.375%10-year notes (Baa2/BBB/) to yield Treasuries plus 180 bps, a market source said.

The notes traded at 177 bps bid, 175 bps offered late in the day.

Price talk was initially in the low 200 bps area and later revised to the 180 bps area, where the bonds were priced.

The deal size was increased from $250 million due to the roughly $2 billion in demand from investors, the market source said.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

The proceeds are being used to repay amounts under a $500 million revolving credit facility and to retire some or all 3.95% convertible senior notes and for general business purposes.

The real estate investment trust for shopping centers and commercial real estate is based in Houston.

Western reopens series F

Western Massachusetts Electric reopened its issue of 3.5% senior notes, series F, to add $150 million, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa2/A-/A-) were priced at a spread of Treasuries plus 105 bps.

Total issuance is $250 million including $100 million sold on Sept. 13, 2011 at Treasuries plus 162.5 bps.

Bookrunners were Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

Proceeds are being used to refinance short-term debt incurred in the ordinary course of business.

The utility is based in Springfield, Mass.

CenturyLink delays deal

CenturyLink announced and then postponed a benchmark deal of senior notes (Baa3/BB/BBB-) in two tranches, a market source said.

The deal included 10-year notes, series V, and a reopening of 7.65% bonds, series W, due March 15, 2042.

There is already $650 million outstanding of the bonds due 2042, which were priced March 5.

The source said they did not know the specific reason for the postponement but speculated that "it probably had to do with market conditions."

The 10-year notes had been talked in the 337 bps area while the reopened bonds due 2042 had guidance in the 450 bps area.

Active bookrunners are J.P. Morgan Securities LLC and RBC Capital Markets LLC.

The proceeds, along with available cash or borrowings under a revolving credit facility if necessary, are being used to redeem $550 million of Qwest Communications International Inc.'s notes due 2015 and to repurchase $800 million of Qwest's outstanding notes due 2018 pursuant to a tender offer.

The communications company is based in Monroe, La.

Apollo's preferreds

Apollo Investment priced $150 million of 6.625% $25-par 30-year senior notes, a market source told Prospect News.

The deal was upsized from $100 million. Pricing was initially talked between 6.625% and 6.75%. It was then revised to 6.5% to 6.625%.

Apollo will apply to list the notes on the New York Stock Exchange.

Bank of America Merrill Lynch and Morgan Stanley & Co. Inc. were bookrunners.

The proceeds will be used to repay indebtedness under the company's senior credit facility.

Apollo Investment is a closed-end, internally managed, non-diversified management investment company based in New York.

CoBank sells $100-par

CoBank ACB priced a $400 million offering of 6.25% $100-par perpetual preferreds, market sources reported.

The preferreds (/BBB/BBB-) will not be listed, a source said.

Bank of America Merrill Lynch and Morgan Stanley & Co. Inc. are bookrunners.

The proceeds will be used to fund a redemption of the company's series A and B $50-par preferreds. The Denver-based cooperative agriculture bank announced the call Aug. 24.

The call took place Monday.

Stephanie N. Rotondo contributed to this review

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