Occidental Petroleum sells $1.5 billion; AT&T, Time Warner bonds remain soft; Wabtec tightens

By Cristal Cody

Eureka Springs, Ark., Nov. 2 – Occidental Petroleum Corp. priced $1.5 billion of senior notes in two parts on Wednesday, while bonds traded mixed in the secondary market.

The Federal Reserve’s Federal Open Market Committee kept rates unchanged following the conclusion of the policy meeting.

AT&T Inc.’s notes were mixed in the secondary market but remain well off trading levels seen before the company announced plans in October to acquire Time Warner Inc. in an $85.4 billion cash-and-stock deal.

Time Warner’s notes traded about 1 basis point to 4 bps softer over the day.

The deal must pass antitrust regulators’ scrutiny. The U.S. Justice Department on Wednesday filed suit against AT&T’s DirecTV subsidiary that alleges efforts to block carrying a Los Angeles Dodgers channel.

Earlier, Wabtec Corp.’s 3.45% senior notes due 2026 priced on Monday traded about 5 bps better in the secondary market.

Danone SA’s 2.947% notes due 2026 traded mostly wrapped around issuance.

The Markit CDX North American Investment Grade index closed the day 1 bp softer at a spread of 80 bps.

Occidental Petroleum prices

Occidental Petroleum priced a $1.5 billion offering of fixed-rate senior notes (A3/A/A) in two tranches on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The company priced $750 million of 3% notes due Feb. 15, 2027 at 99.579 to yield 3.047%. The long 10-year notes priced with a spread of 125 bps over Treasuries.

In the second tranche, Occidental Petroleum sold $750 million of 4.1% notes due Feb. 15, 2047 at 99.776 to yield 4.112%, or 155 bps plus Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities LLC, Barclays, SG Americas Securities, LLC, Mizuho Securities USA Inc. and BBVA Securities Inc. were the bookrunners.

The Los Angeles oil and gas, chemical and midstream company will use the proceeds for general corporate purposes.

AT&T modestly better

AT&T’s 4.125% notes due 2026 firmed about 1 bp over the day to 175 bps bid, according to a market source.

The notes traded on Oct. 21 ahead of the merger announcement at 146 bps bid.

The company priced a $900 million reopening of the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were sold on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

Time Warner softens

Time Warner’s 2.95% notes due 2026 eased about 1 bp on Wednesday to head out at 137 bps bid, a market source said.

The 10-year notes traded on Oct. 21 at 112 bps bid in the secondary market.

The company sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.

Time Warner is a New York-based media and entertainment company.

Wabtec improves

Wabtec’s 3.45% senior notes due 2026 were quoted trading earlier at 157 bps offered, according to a market source.

Wabtec sold $750 million of the 10-year senior notes (Baa3/BBB/) on Monday at a spread of Treasuries plus 162.5 bps over Treasuries.

The Wilmerding, Pa.-based company provides value-added, technology-based products and services for rail and other industrial markets.

Danone mostly flat

Danone’s 2.947% notes due 2026 traded flat to 1 bp tighter at 114 bps offered, according to a market source.

The company sold $2 billion of the notes (Baa1/BBB+/) on Oct. 26 at a 115 bps plus Treasuries spread.

Danone is a food products company based in Paris.

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