By Andrea Heisinger
New York, May 26 - Hewlett-Packard Co. sold $5 billion of global notes (A2/A/A+) in five tranches late on Wednesday, according to a market source away from the deal and FWP filings with the Securities and Exchange Commission.
There were initially six parts, a source said, but the company opted not to sell a tranche of two-year fixed-rate notes.
A $1.75 billion tranche of two-year floating-rate notes was priced at par to yield Libor plus 28 basis points. They sold at the low end of talk in the Libor plus 30 bps area.
There was also a $500 million tranche of three-year floaters priced at par to yield Libor plus 40 bps. They sold at the tight end of guidance in the Libor plus 42 bps area.
Both of the floaters are non-callable.
A $500 million tranche of 1.55% three-year notes sold at 99.971 to yield 1.56% with a spread of Treasuries plus 68 bps. This was tight to talk in the 70 bps area.
The notes have a call option at the greater of par or a make-whole of 10 bps over Treasuries.
The $1 billion of 2.65% five-year notes priced at 99.958 to yield 2.659% with a spread of 90 bps over Treasuries, which was in line with guidance.
They are callable at the greater of par or a make-whole of 15 bps over Treasuries.
A tranche of $1.25 billion of 4.3% 10-year notes priced at 99.799 to yield 4.325% with a spread of 120 bps over Treasuries. They sold directly in line with talk.
The notes can be redeemed at the greater of par or a make-whole of 20 bps over Treasuries.
The bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc.
Bank of America Merrill Lynch, Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., Mitsubishi UFJ Securities International plc, Morgan Stanley & Co., Inc. and Wells Fargo Securities LLC were co-managers.
Proceeds are being used to repay $1 billion of 2.25% global notes due in May along with $750 million of floaters due in May and also for general corporate purposes including repayment of commercial paper.
This was the largest bond sale from Hewlett-Packard. The company last sold bonds in a $2 billion deal in two parts on Nov. 29. The 2.25% five-year notes from that deal priced at 73 bps over Treasuries, and the 3.25% 10-year notes priced at 95 bps over Treasuries.
The information technology company is based in Palo Alto, Calif.
| Issuer: | Hewlett-Packard Co.
|
| Issue: | Global notes
|
| Amount: | $5 billion
|
| Bookrunners: | Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc.
|
| Co-managers: | Bank of America Merrill Lynch, Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., Mitsubishi UFJ Securities International plc, Morgan Stanley & Co., Inc., Wells Fargo Securities LLC
|
| Trade date: | May 25
|
| Settlement date: | May 31
|
| Ratings: | Moody's: A2
|
| Standard & Poor's: A
|
| Fitch: A+
|
|
|
| Two-year floaters
|
| Amount: | $1.75 billion
|
| Maturity: | May 24, 2013
|
| Coupon: | Libor plus 28 bps
|
| Price: | Par
|
| Yield: | Libor plus 28 bps
|
| Call: | Non-callable
|
| Price talk: | Libor plus 30 bps area
|
|
|
| Three-year floaters
|
| Amount: | $500 million
|
| Maturity: | May 30, 2014
|
| Coupon: | Libor plus 40 bps
|
| Price: | Par
|
| Yield: | Libor plus 40 bps
|
| Call: | Non-callable
|
| Price talk: | Libor plus 42 bps area
|
|
|
| Three-year notes
|
| Amount: | $500 million
|
| Maturity: | May 30, 2014
|
| Coupon: | 1.55%
|
| Price: | 99.971
|
| Yield: | 1.56%
|
| Spread: | Treasuries plus 68 bps
|
| Call: | Greater of par or make-whole at 10 bps over Treasuries
|
| Price talk: | 70 bps area
|
|
|
| Five-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 1, 2016
|
| Coupon: | 2.65%
|
| Price: | 99.958
|
| Yield: | 2.659%
|
| Spread: | Treasuries plus 90 bps
|
| Call: | Greater of par or make-whole at Treasuries plus 15 bps
|
| Price talk: | 90 bps area
|
|
|
| 10-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | June 1, 2021
|
| Coupon: | 4.3%
|
| Price: | 99.799
|
| Yield: | 4.325%
|
| Spread: | Treasuries plus 120 bps
|
| Call: | Greater of par or make-whole at Treasuries plus 20 bps
|
| Price talk: | 120 bps area
|
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