Exxon Mobil megadeal, SES, DirecTV price; Exxon, DirecTV flat to softer in secondary

By Cristal Cody and Aleesia Forni

Virginia Beach, March 17 - Exxon Mobil Corp., SES Global Americas Holdings GP and DirecTV priced new deals on Monday during a mostly quiet session for the investment-grade bond market.

Exxon Mobil sold $5.5 billion of notes in fixed- and floating-rate tranches due 2017 and 2019, as well as fixed-rate notes due 2024 on Monday.

There was $750 million of three-year floaters priced at par to yield Libor plus 4 basis points, and $1.5 billion of 0.921% three-year notes priced at 15 bps over Treasuries.

A $500 million tranche of five-year floaters priced at par to yield Libor plus 15 bps, while a $1.75 billion tranche of 1.819% five-year notes priced with a spread of Treasuries plus 25 bps.

There was also a $1 billion tranche of 3.176% 10-year notes sold at Treasuries plus 48 bps.

All fixed-rate tranches sold at the tight end of talk, and the deal was nearly two times oversubscribed, according to a market source.

Also on Monday, DirecTV Holdings LLC and DirecTV Financing Co. priced $1.25 billion of 4.45% 10-year notes with a spread of Treasuries plus 180 bps.

SES Global sold $1 billion of notes in five- and 30-year tranches during the session.

A $500 million tranche of 2.5% notes due 2019 priced at Treasuries plus 105 bps, and $500 million of 5.3% 30-year bonds sold at 185 bps over Treasuries.

Following last week's more than $30 billion of new issuance, Exxon Mobil's megadeal helped push supply for the slower primary session to $7.75 billion.

"It's been pretty quiet today," one market source noted.

This week, the market will be focused on the two-day Federal Open Market Committee meeting commencing on Tuesday.

The pace of supply is not expected to reach levels seen in recent weeks, with sources expecting the week to see around $20 billion to $25 billion of supply.

Investment-grade bond spreads ended the day stronger, while new bonds from Exxon and DirecTV traded mostly wrapped around issuance in aftermarket trading, according to informed sources.

The Markit CDX North American Investment Grade series 21 index firmed 2 bps to a spread of 65 bps on Monday.

Exxon's notes traded flat to 1 bp weaker, according to a trader.

DirecTV's 4.45% notes due 2024 eased 1 bp in the secondary market as the session closed, a trader said.

Exxon Mobil prices tight

Exxon Mobil priced $5.5 billion of senior notes (Aaa/AAA/) in tranches due 2017, 2019 and 2024 on Monday, according to a market source.

The sale included $750 million of three-year floaters priced at par to yield Libor plus 4 bps.

A $1.5 billion tranche of 0.921% three-year notes priced at par with a spread of 15 bps over Treasuries.

There was also a $500 million tranche of five-year floaters priced at par to yield Libor plus 15 bps.

The $1.75 billion tranche of 1.819% five-year notes priced at Treasuries plus 25 bps.

Finally, $1 billion of 3.176% 10-year notes priced to yield Treasuries plus 48 bps.

Pricing was at par for all of the tranches.

All fixed-rate tranches sold at the tight end of talk.

Exxon's 0.921% notes due 2016 eased in secondary trading to 16 bps bid, 15 bps offered, according to a trader.

The 1.819% notes due 2019 traded flat at 25 bps bid, 22 bps offered.

The 3.176% securities due 2024 headed out wrapped around issuance at 48 bps bid, 46 bps offered, the trader said.

HSBC Securities Inc., J.P. Morgan Securities LLC, Barclays, BofA Merrill Lynch, Morgan Stanley & Co. LLC and Citigroup Global Markets were the joint bookrunners.

Proceeds will be used for general corporate purposes, including funding for working capital, acquisitions, capital expenditures, refinancing existing commercial paper borrowings and other business opportunities.

The oil and gas company is based in Irving, Texas.

DirecTV new issue

DirecTV priced $1.25 billion of 4.45% senior notes (Baa2/BBB/) due 2024 with a spread of Treasuries plus 180 bps, according to a market source.

The notes priced at 99.63 to yield 4.496%.

Pricing was at the tight end of talk.

DirecTV's 4.45% notes due 2024 traded slightly weaker in aftermarket trading at 181 bps bid, 179 bps offered, a trader said.

The bookrunners were Barclays, Citigroup Global Markets Inc., UBS Securities LLC and Goldman Sachs & Co.

The net proceeds from the offering will be used for general corporate purposes, which may include the repayment of debt, including the company's 4.75% notes due Oct. 1, 2014, or a distribution to DirecTV to fund repurchases under its share repurchase program and other corporate purposes.

The notes are guaranteed by DirecTV, DirecTV LLC, DirecTV Customer Services, Inc., DirecTV Merchandising, Inc., DirecTV Enterprises, LLC, LABC Productions, LLC and DirecTV Home Services, LLC.

The digital entertainment company, based in El Segundo, Calif., last sold bonds in the U.S. market with a $750 million offering of 1.75% five-year senior notes at 115 bps over Treasuries on Jan. 10.

SES Global two-parter

SES Global Americas Holdings priced $1 billion of notes (Baa2/BBB/) on Monday in five- and 30-year tranches in a Rule 144A and Regulation S sale, an informed source said.

The sale included $500 million of 2.5% notes due 2019 priced with a spread of Treasuries plus 105 bps.

Credit Suisse Securities (USA) LLC, Goldman Sachs, JPMorgan and RBS Securities Inc. were the bookrunners for the five-year tranche.

A second tranche was $500 million of 5.3% bonds due 2044 sold at 185 bps over Treasuries.

Bookrunners for the 30-year tranche were Barclays, Deutsche Bank Securities Inc., Goldman Sachs and JPMorgan.

Proceeds will be used for general corporate purposes.

The Wilmington, Del.-based subsidiary of Luxembourg's SES SA provides satellite services.

Bank/brokerage CDS decline

Investment-grade bank and brokerage CDS prices declined, according to a market source.

Bank of America Corp.'s CDS costs firmed 3 bps to 67 bps bid, 71 bps offered. Citigroup Inc.'s CDS costs tightened 4 bps to 79 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs declined 2 bps to 61 bps bid, 64 bps offered. Wells Fargo & Co.'s CDS costs firmed 2 bps to 39 bps bid, 42 bps offered.

Merrill Lynch's CDS costs fell 1 bp to 73 bps bid, 78 bps offered. Morgan Stanley's CDS costs firmed 2 bps to 92 bps bid, 96 bps offered. Goldman Sachs Group, Inc.'s CDS costs declined 2 bps to 98 bps bid, 101 bps offered.

Paul Deckelman contributed to this review.

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