Mesa Airlines prints equipment notes; Dow Chemical widens; Newell Rubbermaid improves

By Aleesia Forni and Cristal Cody

New York, Dec. 15 – Mesa Airlines Inc. announced a sale of equipment notes on Tuesday, while the market’s tone improved somewhat with credit spreads tightening on the day.

Elsewhere, primary activity was subdued as the Federal Reserve kicked off the first day of its two-day policy meeting.

Players are anticipating the Federal Open Market Committee to announce an increase in the benchmark rate when it releases its statement at 2 p.m. ET on Wednesday in what would be the first hike in nine years.

The slower pace is expected to continue throughout the remainder of the calendar year, with the exception of the possibility of off-the-radar new issues.

Investment-grade bonds were mixed in secondary trading over the session.

Dow Chemical Co.’s 8.5% notes due 2019 widened 10 bps on the day and have remained weak since the company announced it will merge with DuPont Co.

Charter Communications Inc.’s 4.908% split-rated notes due 2025 were unchanged after widening more than 20 bps on Monday.

Time Warner Inc.’s 3.6% notes due 2025 firmed 2 bps during the session.

Newell Rubbermaid Inc.’s 3.9% senior notes due 2025 gained some ground after falling 7 points on Monday following the company’s announcement that it will acquire Jarden Corp. in a deal valued at $15 billion.

The Markit CDX North American Investment Grade 25 index closed the day 3 bps tighter at a spread of 90 bps.

Mesa equipment certificates

Mesa Airlines announced a $245.9 million three-tranche issue of enhanced equipment trust certificates on Tuesday.

The company priced $170,785,000 of 4.75% mesa pass-through certificates, series 2015-1, class A.

Also priced were $44,941,000 of 5.75% mesa pass-through certificates, series 2015-1, class B and $30,264,000 of 6.25% mesa pass-through certificates, series 2015-1, class C.

The airline plans to use the proceeds to finance the acquisition of 10 new Embraer 175 aircraft, scheduled for delivery over the next six months.

The notes were sold in a private placement via agents Deutsche Bank Securities Inc., Goldman Sachs & Co. and Imperial Capital.

The regional airline is based in Phoenix.

Dow Chemical widens

Dow’s 8.55% notes due 2019 widened 10 bps to 115 bps bid on Tuesday, according to a market source.

The company sold $3.25 billion of the bonds on May 7, 2009 at a spread of Treasuries plus 525 bps.

The specialty chemicals company is based in Midland, Mich.

Charter unchanged

Charter Communications’ 4.908% notes due 2025 were unchanged in secondary trading at 284 bps bid after widening more than 20 bps in the previous session, a market source said.

The company sold $4.5 billion of the bonds (Ba1/BBB-) on July 9 at a spread of Treasuries plus 260 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

Time Warner improves

Time Warner’s 3.6% notes due 2025 firmed 2 bps to head out at 166 bps bid, a source said.

The company priced $1.5 billion of the notes (Baa2/BBB) on May 28, 2015 at 150 bps over Treasuries.

Time Warner is a media company based in New York.

Newell Rubbermaid improves

Newell Rubbermaid’s 3.9% notes due 2025 traded higher on Tuesday, going out at 94.03 to yield 4.661%, according to a market source.

The notes closed on Monday at 89.12 to yield 5.331%.

Newell Rubbermaid sold $300 million of the bonds (Baa3/BBB-/BBB+) on Oct. 14 at 99.686 to yield 3.938%.

The consumer and commercial products maker is based in Atlanta.

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