Qualcomm prices $11 billion; Qualcomm, HSBC notes tighten; Morgan Stanley paper eases

By Cristal Cody

Tupelo, Miss., May 19 – Qualcomm Inc. tapped the high-grade bond market on Friday with an $11 billion nine-tranche offering of notes.

Market tone improved after pricing action thinned over the previous two sessions, a source said.

Pricing action is expected to stay strong in the week ahead, despite a shortened week. The bond markets will close early on May 26 for the Memorial Day holiday.

Syndicate sources forecast about $30 billion to $35 billion of supply for the week ahead.

In the secondary market, Qualcomm’s bonds tightened about 1 basis point to 5 bps.

Morgan Stanley’s $3.25 billion offering of 2.75% global medium-term senior notes due May 19, 2022 priced on Tuesday traded about 2 bps softer than issuance on Friday.

HSBC Holdings plc’s $3 billion of 6% perpetual subordinated contingent convertible securities placed on Monday tightened more than 10 bps in secondary trading.

The Markit CDX North American Investment Grade index firmed about 1 bp to close at a spread of 64 bps.

Qualcomm sells nines tranches

Qualcomm sold $11 billion of notes (A1/A) in nine tranches on Friday, according to a market source.

The company priced $750 million of two-year floating-rate notes at Libor plus 36 basis points.

Qualcomm sold $1.25 billion of 1.85% two-year fixed-rate notes at a spread of Treasuries plus 60 bps.

The $500 million tranche of three-year floating-rate notes priced at Libor plus 45 bps.

The $1.5 billion offering of 2.1% three-year fixed-rate notes were sold with a Treasuries plus 65 bps spread.

Qualcomm placed $500 million of floating-rate notes due Jan. 30, 2023 at Libor plus 73 bps.

The company sold $1.5 billion of 2.6% fixed-rate notes due Jan. 30, 2023 at a spread of 85 bps over Treasuries.

The $1.5 billion seven-year tranche priced with a 2.9% coupon and a spread of 90 bps over Treasuries.

Qualcomm sold $2 billion of 3.25% 10-year notes with a Treasuries plus 105 bps spread.

In the final tranche, the company priced $1.5 billion of 4.3% 30-year notes with a Treasuries plus 140 bps spread.

BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the bookrunners.

Proceeds will be used to pay part of the purchase price and the transaction fees and expenses of the acquisition of NXP and to repurchase for cash NXP’s convertible senior notes at the option of the holders. Estimated funds needed for the acquisition from all sources total $39.5 billion.

In aftermarket trading on Friday, Qualcomm’s 2.1% notes due May 20, 2020 firmed to 62 bps bid, 59 bps offered.

The 3.25% notes due May 202, 2027 traded at 104 bps bid, 102 bps offered, while the 4.3% notes due May 20, 2047 tightened to 136 bps bid, 135 bps offered.

The San Diego-based company designs, develops, manufactures and markets wireless telecommunications products and services.

Morgan Stanley eases

Morgan Stanley’s 2.75% notes due May 19, 2022 traded on Friday at 97 bps bid, 95 bps offered, a market source said.

Morgan Stanley priced $3.25 billion of the notes (A3/BBB+/A) on Tuesday at a spread of 95 bps Treasuries.

Morgan Stanley is a New York-based financial products and services company.

HSBC tightens

HSBC’s 6% perpetual subordinated contingent convertible securities tightened to 358 bps bid, 354 bps offered in the secondary market, a source said.

HSBC Holdings priced $3 billion of the securities on Monday at a spread of 374.6 bps over Treasuries.

The banking and financial services group is based in London.

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