NBCUniversal prices $2 billion issue to close out record month; Watson bonds trade tighter

By Andrea Heisinger

New York, Sept. 28 - New deals weren't done for the week. NBCUniversal Media LLC priced notes on Friday, adding to the already sizeable issuance for the month of September.

The media and entertainment company sold $2 billion of notes due 2023 and 2043.

There was also a $150 million sale of cumulative redeemable preferred stock from CBL & Associates Properties Inc.

The NBCUniversal deal comes on the heels of two large offerings priced on Thursday by Watson Pharmaceuticals, Inc. and MetLife, Inc.

Those deals, along with NBC's, have pushed the month of September well over the predicted $100 billion mark, a source said.

"I think we hit that before Thursday," the source added.

The month will also top the record for monthly issuance in 2012 that had been set in March when about $108 billion of new paper was sold, the source said.

On the secondary side of the market, spreads were seen tighter at the open but were wider by late morning in the New York session, a trader said.

"Spreads are pretty good today," she said. "The index is a little wider."

Trading volume for high-grade bonds was seen at about $2.8 million as of midday and had risen to about $8.9 billion by day's end.

"It seems like a lot of people are gone for the day," a trader said.

Bank and brokerage credit default swap costs were mostly wider on the day, a market source said.

Banks were seen 2 basis points to 6 bps wider, and brokerages were unchanged to 2 bps wider.

Some volatility was seen later on Friday as the markets awaited the results of stress tests on Spanish banks, the trader said.

"We also heard rumors that Spain could ask for a bailout after the close today," the trader added. "What a great way to end the week."

By mid-afternoon, there had been an announcement that stress tests showed a need for about €60 billion of capital for banks in Spain, a market source said.

That may not affect issuance much in the week ahead, a syndicate source said after the close.

"Maybe one or two [deals] will be affected, but nothing too much for what we're seeing," she said.

Issuance is set to start with a bang on Monday, the source said, with about $15 billion to $20 billion expected to price for the week.

NBC sells $2 billion

NBCUniversal Media priced a $2 billion sale of senior bonds (Baa2/BBB+/BBB) in two tranches, a market source said.

A $1 billion tranche of 2.875% notes due 2023 was priced at a spread of Treasuries plus 125 bps. The bonds were sold tighter than guidance in the 140 bps area.

The second part was $1 billion of 4.45% bonds due 2043 sold at 165 bps over Treasuries. The tranche priced tighter than talk in the 175 bps area.

In the secondary market, the notes due 2023 were seen offered at 119 bps over Treasuries, a trader said. The bonds due 2043 were not immediately seen trading.

The bookrunners were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

Proceeds are being used for the redemption on Nov. 15 of Universal City Development Partners, Ltd. and UCDP Finance, Inc.'s $260 million of 8.875% senior notes due November 2015 and $146.25 million of 10.875% senior subordinated notes due November 2016. Any remainder will be used for working capital and general corporate purposes, which may include funding a portion of the anticipated future redemptions of General Electric's interest in NBCUniversal, LLC.

The media and entertainment company is based in New York.

CBL's preferreds

CBL & Associates brought a new deal to close out the moderately active new issue calendar of preferreds for the week.

The $150 million deal priced at 6.625%.

Price talk was initially 6.625% to 6.75%, according to a trader.

The trader said he had not seen any markets in the new deal.

"It's just dead," he said.

Bank of America Merrill Lynch, JPMorgan and Wells Fargo Securities LLC were the bookrunners.

Chattanooga, Tenn.-based CBL will apply to list the preferred stock on the New York Stock Exchange under the ticker symbol "CBLPE."

Proceeds will be used to redeem the company's series C preferreds and for general corporate purposes.

Watson notes tighten

The three new tranches of Watson bonds were tighter on Friday than quoted in the gray market at the end of Thursday, a trader said.

As of late morning in the New York session, the 1.875% notes due 2017 were seen about 30 bps tighter at a bid of 104 bps over Treasuries and offer of 101 bps. The notes priced at 135 bps over Treasuries.

A 3.25% note due 2022 from Watson was seen 24 bps better at 146 bps bid, 144 bps offered, the trader said. The tranche was priced at 170 bps over Treasuries.

The tranche of 4.625% bonds due 2042 moved tighter by 22 bps. The trader quoted them at 168 bps bid, 165 bps offered. The bonds sold at 190 bps over Treasuries.

Stephanie N. Rotondo contributed to this report

© 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.