Chevron, Altria, Eastman price ahead of Veterans Day holiday; Eastman mixed; Altria firms

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 10 – The investment-grade primary market was lively to begin the holiday-shortened week on Monday, with $10.75 billion of new issuance pricing.

Chevron Corp., Eastman Chemical Co., Altria Group Inc. and Freeport-McMoRan Inc. were among the issuers accessing the market with mostly larger-sized deals ahead of Tuesday’s Veterans Day holiday.

In the largest trade of the day, Chevron sold a new $4 billion six-part issue of senior notes during the session.

Freeport-McMoRan came to market with $3 billion of senior notes priced in four parts, each at the tight end of price talk.

A source noted that the deal’s orderbook was around 2.7 times oversubscribed.

Also on Monday, Eastman Chemical sold $2 billion of senior notes in tranches due 2020 and 2025.

The primary also hosted Philip Morris USA Inc. subsidiary Altria Group, which sold a $1 billion new issue of 2.625% notes due 2020 around 15 basis points tight of initial guidance.

In other primary action, Bank Nederlandse Gemeenten NV sold a $500 million add-on to its recently priced 0.5% notes due 2016 in line with talk.

Federal Realty Investment Trust also came to market on Monday, pricing $250 million of 4.5% 30-year notes at the tight end of price talk.

The investment-grade market’s momentum is expected to continue this week following the bond market’s closure for the Veterans Day holiday on Tuesday.

“It will be busy,” a market source said. “Even with the holiday, we’re calling for around a $30 billion week.”

Investment-grade credit spreads tightened over the day, while new issues traded flat to modestly better, market sources said.

The Markit CDX North American Investment Grade series 23 index tightened 1 bp to a spread of 65 bps.

Eastman Chemical’s new notes traded 3 bps to 4 bps better in the secondary market. The company’s add-on to its 4.65% due 2044 headed out wrapped around issuance, a trader said.

Altria Group’s 2.625% notes due 2020 firmed 3 bps in late afternoon trading.

Federal Realty’s 4.5% notes due 2044 were not seen in the secondary market as the session closed, a trader said.

Freeport-McMoRan’s 4.55% notes due 2024 were active in the secondary market, while the other tranches were not immediately seen in late afternoon trading, a trader said.

Chevron’s short-dated notes traded modestly tighter, according to a trader.

Chevron sells $4 billion

Chevron sold $4 billion of senior notes (Aa1/AA/) in six tranches on Monday, a source away from the trade said.

There was $700 million of two-year floaters priced at par to yield Libor plus 10 bps.

The notes sold on top of talk, which had tightened from guidance in the Libor plus 12.5 bps area.

A $650 million tranche of three-year floaters sold at par to yield Libor plus 17 bps.

Chevron also priced $1.1 billion of 1.345% notes at par with a spread of Treasuries plus 37.5 bps.

The notes sold at the tight end of talk set in the Treasuries plus 40 bps area, which had tightened from guidance in the Treasuries plus 45 bps area.

A $400 million tranche of floaters due 2019 priced at par to yield Libor plus 41 bps.

There was also $750 million of 2.193% five-year notes priced at par with a spread of 55 bps over Treasuries.

Pricing was on top of talk, which had firmed from initial guidance of Treasuries plus 60 bps to 65 bps.

Finally, $400 million of seven-year floating-rate notes sold on top of talk at par to yield Libor plus 53 bps.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including refinancing a portion of commercial paper.

In the secondary market, Chevron’s 1.345% notes due 2017 traded at 37 bps bid, 33 bps offered, according to a trader.

The company’s 2.193% notes due 2019 firmed to 51 bps offered.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

Freeport prices tight

Also on Monday, Freeport-McMoRan priced $3 billion of senior notes (Baa3/BBB/) in four parts, a market source said.

The offering included $750 million of 2.3% three-year notes priced at 99.934 to yield 2.323%, or Treasuries plus 135 bps.

A $600 million tranche of 4% seven-year notes sold with a spread of 200 bps over Treasuries.

Pricing was at 99.921 to yield 4.063%.

There was also $850 million of 4.55% 10-year notes priced at 99.905 to yield 4.562%.

The notes sold with a spread of 220 bps over Treasuries.

An $800 million tranche of 5.4% notes due 2034 priced at 99.516 to yield 5.44%, or Treasuries plus 235 bps.

All four tranches sold at the tight end of price talk.

BofA Merrill Lynch, Citigroup Global Markets Inc. and JPMorgan were the bookrunners.

Proceeds will be used to repay debt.

Freeport-McMoRan’s tranche of 4.55% notes due 2024 tightened to 217 bps offered in the aftermarket, a trader said.

The company’s other tranches were not seen in late afternoon secondary trading.

Phoenix-based Freeport-McMoRan is a producer of gold, copper and molybdenum as well as a manufacturer of copper wire and bars, copper strip and cadmium copper.

Eastman Chemical three-parter

Eastman Chemical priced $2 billion of senior notes (Baa2/BBB/BBB) in three tranches on Monday, according to an informed source.

The company sold $800 million of 2.7% notes due 2020 at 99.781 to yield 2.734%, or Treasuries plus 110 bps.

Meanwhile, $800 million of 3.8% notes due 2025 priced at 99.506 to yield 3.859%, or Treasuries plus 150 bps.

There was also a $400 million add-on to the company’s existing 4.65% notes due 2044 priced at 95.444 to yield 4.943%, or Treasuries plus 185 bps.

The original $500 million of notes priced with a spread of Treasuries plus 135 bps on May 6, 2014.

BofA Merrill Lynch, Citigroup Global Markets and JPMorgan are the joint bookrunners.

Proceeds will be used to help fund the company’s acquisition of Taminco Corp.

Eastman Chemical’s tranche of 2.7% notes due 2020 traded better at 106 bps offered, according to a trader.

The offering of 3.8% notes due 2025 firmed to 147 bps offered in secondary trading.

The company’s tap of 4.65% due 2044 traded flat at 185 bps bid, 182 bps offered.

Eastman is a global chemical company based in Kingsport, Tenn.

Altria new issue

In other primary happenings, Altria Group priced $1 billion of 2.625% senior notes (Baa1/BBB/BBB+) due Jan. 14, 2020 on Monday with a spread of Treasuries plus 100 bps, a market source said.

Pricing was at 99.919 to yield 2.641%.

Bookrunners were Barclays, Deutsche Bank Securities Inc. and Morgan Stanley.

There is a change-of-control put at 101%.

Proceeds will be used for general corporate purposes.

In the secondary market, Altria Group’s 2.625% notes due 2020 tightened to 97 bps offered, a trader said.

The securities are guaranteed by Richmond, Va.-based parent Philip Morris USA Inc., a cigarette and smokeless tobacco product maker.

BNG add-on

Bank Nederlandse Gemeenten priced a $500 million add-on to its exiting 0.5% notes (Aaa/AA+) due 2016 at mid-swaps minus 1 bp on Monday, according to a market source.

The total issue size is now $1.5 billion, including $1 billion priced on Wednesday at mid-swaps minus 1 bp.

The bookrunners were BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, JPMorgan and Nomura.

The local government funding agency is based in the Hague, the Netherlands.

Federal Realty prices tight

The primary also saw Federal Realty Investment Trust price $250 million of 4.5% 30-year senior notes (A3/A-/A-) at Treasuries plus 148 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 98.86 to yield 4.57%.

Pricing was at the tight end of talk.

Wells Fargo Securities, BofA Merrill Lynch and Deutsche Bank Securities were the bookrunners.

Proceeds will be used to redeem outstanding 5.65% notes due 2016, to repay the mortgage loan on the company’s East Bay Bridge property and for general corporate purposes.

The real estate investment trust for retail and mixed-use buildings is based in Rockville, Md.

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