American Tower, JPMorgan, McCormick sell amidst 'cautious' tone; new deals trading better

By Cristal Cody and Aleesia Forni

Virginia Beach, Aug. 14 - A hodgepodge of corporate issuers brought new deals to Wednesday's primary, despite what one source called a "cautious tone" to the market due in part to volatility in Treasuries.

American Tower Corp., McCormick & Co. Inc. and Broadridge Financial Solutions, Inc. were among the names pricing new issues during the session.

The day's largest deal came from American Tower, pricing a two-part $1.25 billion offering of senior notes.

The company sold $750 million of 3.4% notes due 2019 with a spread of Treasuries plus 195 basis points and $500 million of 5% notes due 2024 priced with a spread of Treasuries plus 230 bps.

Meanwhile, McCormick priced a $250 million offering of 3.5% notes due 2023 with a spread of Treasuries plus 90 bps, according to a syndicate source.

The source noted that the notes priced at the tight end of final talk, which saw "significant" tightening from initial guidance.

The notes were initially talked at Treasuries plus 120 bps before firming to the 95 bps over Treasuries area.

Also during the session, Broadridge sold $400 million of 3.95% senior notes due Sept. 1, 2020 with a spread of Treasuries plus 185 bps, according to an informed source.

The notes priced at the tight end of the Treasuries plus 190 bps area talk.

Wednesday's lone financial deal came from JPMorgan Chase & Co.

The bank priced $750 million of 5.625% subordinated bonds at a spread of Treasuries plus 190 bps, an informed source said.

In other primary action, Jersey Central Power & Light Co. priced $500 million of 4.7% notes to yield Treasuries plus 205 bps, a market source said.

Northwest Natural Gas Co. hit the market with $50 million of 3.542% first mortgage bonds due 2023 at par, according to a 424B5 filing with the Securities and Exchange Commission.

Early during Wednesday's session, a source said that Freddie Mac priced a $3 billion 0.875% three-year Reference Note to yield Treasuries plus 20.5 bps.

The sale was done wider than talk, which had been set in the Treasuries plus 19.5 bps area on Tuesday after widening from the original 18.5 bps spread talk.

A source noted that talk was revised due to several factors, including sector widening and a steeper yield curve.

In the secondary market, investment-grade bonds ended the day slightly better after trading weaker earlier in the session with credit spreads holding flat, market sources said.

Broadridge Financial's new 3.95% notes tightened 5 bps in trading, a source said.

McCormick's 3.5% notes firmed about 4 bps in the secondary market.

American Tower's 3.4% notes traded wrapped around issuance going out, a trader said.

The Markit CDX Series 20 North American Investment Grade index ended unchanged at a spread of 75 bps.

American Tower's two-parter

Wednesday's primary saw American Tower price a two-part $1.25 billion offering of senior notes, according to a syndicate source and an FWP filing with the SEC.

The company sold $750 million of 3.4% notes due 2019 with a spread of Treasuries plus 195 bps, or 99.911, to yield 3.418%.

There was also $500 million of 5% notes due 2024 priced with a spread of Treasuries plus 230 bps. The notes priced at 99.888 to yield 5.014%.

The company plans to use proceeds to repay existing debt under its credit facilities, to finance recently announced acquisitions and for general corporate purposes.

BofA Merrill Lynch, Citigroup Global Markets Inc., Mizuho Securities, Morgan Stanley & Co. LLC and TD Securities are the joint bookrunners.

The owner and operator of communications towers is based in Boston.

JPMorgan sells $750 million

Also on Wednesday, JPMorgan priced $750 million of 5.625% subordinated bonds at a spread of Treasuries plus 190 bps, an informed source said.

The notes sold at 99.242 to yield 5.678%.

J.P. Morgan Securities LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in New York City.

Jersey Central Power new issue

In other primary action, Jersey Central Power & Light priced $500 million of 4.7% notes to yield Treasuries plus 205 bps, a market source said. The notes priced at 99.481 to yield 4.762%.

Bookrunners were Barclays, BNP Paribas Securities Corp. and BofA Merrill Lynch.

The subsidiary of electric company FirstEnergy Corp. is based in Akron, Ohio.

Broadridge sells senior notes

Meanwhile, Broadridge Financial Solutions sold $400 million of 3.95% senior notes due Sept. 1, 2020 with a spread of Treasuries plus 185 bps, according to an informed source.

The notes priced at the tight end of the Treasuries plus 190 bps area talk.

Broadridge sold the notes at 99.871 to yield 3.971%.

In the secondary market, Broadridge's 3.95% notes firmed to 180 bps bid, 176 bps offered, a trader said.

JPMorgan, Mitsubishi UFJ Securities, Morgan Stanley, Wells Fargo Securities LLC, BofA Merrill Lynch and U.S. Bancorp Investments Inc. are the joint bookrunners.

The company plans to use proceeds to repay the outstanding debt under its senior credit facility.

Broadridge Financial is a Lake Success, N.Y.-based producer of goods and services for securities processing, clearing and outsourcing, and investor communication.

McCormick prices tight

The session also saw McCormick price a $250 million offering of 3.5% notes due 2023 with a spread of Treasuries plus 90 bps, according to a syndicate source and an FWP filing with the SEC.

The notes priced at the tight end of Treasuries plus 95 bps talk.

In afternoon trading, McCormick's 3.5% notes firmed to 86 bps bid, 84 bps offered, a trader said.

McCormick sold the notes at 99.138 to yield 3.603%.

BofA Merrill Lynch, SunTrust Robison Humphrey Inc., Wells Fargo Securities and BNP Paribas Securities were the joint bookrunners.

JPMorgan and U.S. Bancorp are the co-managers.

The company plans to use proceeds from the offering to repay the $250 million outstanding of its 5.25% notes due September 2013.

McCormick is a spice company based in Sparks, Md.

Freddie Mac sells $3 billion

The primary market saw Freddie Mac price a $3 billion 0.875% three-year Reference Note to yield Treasuries plus 20.5 bps on Wednesday, according to a market source.

Pricing was at 99.985 to yield 0.88%.

Bookrunners were Barclays, JPMorgan and Nomura Securities Co. Ltd.

The government-backed mortgage lender is based in McLean, Va.

Northwest sells mortgage bonds

Northwest Natural Gas priced $50 million of 3.542% first mortgage bonds due 2023 at par, according to a 424B5 filing with the SEC.

The notes feature a make-whole call at Treasuries plus 15 bps.

JPMorgan and U.S. Bancorp Investments were the selling agents.

The utility is based in Portland, Ore.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS costs rose on Wednesday, a market source said.

Bank of America Corp.'s CDS costs widened 2 bps to 107 bps bid, 111 bps offered. Citigroup Inc.'s CDS costs increased 1 bp to 99 bps bid, 103 bps offered. JPMorgan Chase & Co.'s CDS costs eased 2 bps to 82 bps bid, 86 bps offered. Wells Fargo & Co.'s CDS costs ended 2 bps higher at 64 bps bid, 67 bps offered.

Merrill Lynch's CDS costs closed unchanged at 102 bps bid, 108 bps offered. Morgan Stanley's CDS costs eased 2 bps to 137 bps bid, 141 bps offered. Goldman Sachs Group, Inc.'s CDS costs rose 2 bps to 127 bps bid, 131 bps offered.

Paul Deckelman contributed to this review.

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