Teva sells two maturities, joined by HSBC, Williams, NewMarket; secondary tone weaker

By Aleesia Forni and Andrea Heisinger

New York, Dec. 13 - Activity in the investment-grade bond market ramped up slightly on Thursday with sales from Teva Pharmaceutical Industries Ltd. units and HSBC USA Inc. leading the pack.

Williams Cos. Inc. and NewMarket Corp. did smaller offerings.

Teva priced $2 billion of notes due 2020 and 2022 for note repayment and redemption.

The U.S. unit of HSBC sold $1.5 billion of five-year notes.

Oklahoma-based Williams was in the market with an $850 million offering of 10-year notes.

NewMarket sold $350 million of 10-year notes in its first sale since being upgraded by ratings agencies from junk. The size of the deal was increased from $300 million.

The flow into the preferred stock primary market continued as SunTrust Banks Inc. sold $450 million of perpetual preferred stock.

A pricing of $287.04 million of secured notes due 2025 was announced by Excalibur One 77B LLC (International Lease Finance Corp.).

Equities ended the day down, and spreads on high-grade bonds were wider overall, a source said.

The source added that these moves were likely due to "nothing new on the fiscal cliff talks. It's getting ridiculous."

Thursday could be the last day of any meaningful issuance in 2012, a syndicate source said.

"We may see one or two things early next week, but after that it's going to be dead," he said.

Following a mostly unchanged morning in the secondary market, spreads were seen slightly weaker as the day wore on, a market sources said during the session.

The Markit CDX Series 18 North American Investment Grade index widened 1 bp to a spread of 94 bps on Thursday.

The high-grade secondary market also saw Mylan Inc.'s recent note issue weaken on Thursday, according to a trader.

Teva does two tranches

Teva Pharmaceutical Finance IV LLC and Teva Pharmaceutical Finance Co. BV sold $2 billion of senior notes (A3/A-/A-) in two maturities, a source close to the trade said.

There was a $700 million tranche of 2.25% notes due 2020 sold by Teva Pharmaceutical Finance IV. The notes were priced at a spread of Treasuries plus 110 bps.

A second part was $1.3 billion of 2.95% 10-year notes priced by Teva Pharmaceutical Finance Co. at Treasuries plus 125 bps.

Bookrunners were Barclays, Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The notes are guaranteed by Teva Pharmaceutical Industries Ltd.

Proceeds will be used to repay about $700 million under a term loan facility; to redeem $1 billion of 1.7% senior notes due Nov. 10, 2014 of Teva LLC and pay an associated make-whole premium of about $25 million; and to repay other debt and/or for general corporate purposes.

Teva was last in the bond market with a $5 billion sale of notes in six tranches priced on Nov. 7, 2011. That offering included two tranches of 10-year notes, each with a 3.65% coupon priced at 170 bps over Treasuries.

The global maker of generic and over-the-counter pharmaceuticals is based in Israel.

HSBC prices $1.5 billion

HSBC USA was in the market with a $1.5 billion sale of 1.625% five-year senior notes (A2/A+/AA-) priced at Treasuries plus 100 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes sold in line with guidance, a source said.

HSBC Securities (USA) Inc. was the bookrunner.

Proceeds will be used for general corporate purposes.

HSBC USA was last in the U.S. bond market with a $750 million reopening of 2.375% notes due Feb. 13, 2015 on March 2, 2012.

The U.S. subsidiary of England's HSBC Holdings plc is based in New York City.

Williams sells 10-year notes

Williams Cos. priced $850 million of 3.7% 10-year senior notes (Baa3/BBB-/BBB-) to yield Treasuries plus 200 bps, an informed source said.

Bookrunners were Barclays, Citigroup Global Markets Inc. and UBS Securities LLC.

Proceeds will be used, along with borrowings under a revolving credit facility and bridge facility if needed, to fund consideration for the investment in equity interest of Access Midstream Partners LP.

There is a mandatory call at 101 if the investment is not closed by May 15, 2013.

Williams last tapped the U.S. bond market in a $600 million split-rated sale of 8.75% 11-year notes priced at Treasuries plus 590.5 bps on Feb. 26, 2009.

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

NewMarket's private sale

NewMarket tapped the market for an upsized $350 million of 10-year notes (Baa3/BB+/BBB-) priced to yield 240 bps over Treasuries, a market source said.

The notes were initially talked in the mid-to-high 200 bps area.

Full terms of the sale were not available at press time.

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

JPMorgan and RBS Securities Inc. were the bookrunners.

Proceeds will be used to repay a portion of borrowings under a $650 million five-year unsecured revolver.

Richmond, Va.-based NewMarket, through subsidiaries Afton Chemical Corp. and Ethyl Corp., develops, manufactures, blends and delivers chemical additives for petroleum products.

SunTrust sells preferreds

SunTrust Banks sold an upsized $450 million of 5.875% series E noncumulative perpetual preferred stock, a market source said.

The size of the sale was increased from a minimum of $150 million.

Price talk was originally 6% to 6.125% but was revised to 5.875% to 6%, according to a trader.

"That kind of took the steam out of it a little bit," the trader said, seeing the preferreds at $24.70 in the midday gray market.

After pricing, the previous weakness seemed to drift away, as a trader saw the issue close at $24.80 bid, $24.90 offered.

The preferreds will be issued as depositary shares representing a 1/4,000th interest.

SunTrust intends to list the securities on the New York Stock Exchange.

Bookrunners are Morgan Stanley, Bank of America Merrill Lynch, Citigroup, Goldman Sachs, SunTrust Robinson Humphrey and UBS Securities LLC.

The Atlanta-based bank holding company will use proceeds for general corporate purposes.

ILFC's secured notes

Excalibur One 77B LLC (International Lease Finance Corp.) priced $287.04 million of 1.492% prefunded secured notes due 2025, according to a press release.

The notes are guaranteed by the Export-Import Bank of the United States.

JPMorgan was the bookrunner and structuring agent.

Proceeds will be used to finance the purchase of two new Boeing 777-300ER aircraft.

"This first-ever Ex-Im Bank financing for ILFC will further support our company's goals of diversifying capital sources and reducing average funding costs," said ILFC chief executive officer Henri Courpron in a news release.

The aircraft leasing division of American International Group Inc. is based in Los Angeles.

Mylan notes widen

Mylan's new notes were trading wider on Thursday, according to a trader.

The trader quoted the notes at 147 bps bid, 143 bps offered at midday.

Mylan priced an upsized $750 million of 3.125% 10-year notes to yield Treasuries plus 145 bps on Wednesday.

The generic and specialty pharmaceutical company is based in Canonsburg, Pa.

Stephanie N. Rotondo contributed to this review

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