Ford, International Paper, Tyco among issuers; KfW, Nederlandse Waterschapsbank in pipeline

By Cristal Cody

Tupelo, Miss., July 31 – Deal action stayed busy on Monday with eight reported corporate issuers pricing investment-grade securities.

Ford Motor Credit Co. LLC placed $1.5 billion of senior notes in two tranches.

International Paper Co. sold $1 billion of fixed-rate notes due 2048 and dropped a planned offering of floating-rate notes due 2020.

American Airlines, Inc. priced an upsized $796,898,000 offering of class AA and class A pass-through certificates.

ERP Operating LP tapped the primary market with a $700 million two-tranche sale of fixed-rate notes.

Also in the primary market on Monday, Tyco Electronics Group SA sold $500 million of guaranteed senior notes in two parts.

Boston Gas Co. came with $500 million of 10-year senior notes.

Hubbell Inc. priced $300 million of 10-year senior notes.

DTE Electric Co. sold $440 million of 30-year general and refunding mortgage bonds.

About $25 billion of new issue volume is expected by market sources over the week.

Coming up on Tuesday, KfW plans to offer $1 billion of senior fixed-rate unsecured notes due Sept. 15, 2021, according to a market source. Initial price thoughts on the notes were mid-swaps plus 5 basis points.

Also in the deal pipeline, Nederlandse Waterschapsbank NV (Aaa/AAA/) plans a dollar-denominated offering of 18-month floating-rate notes, according to a market source.

The notes were initially talked to price in the Libor plus 1 bp area.

The Markit CDX North American Investment Grade index closed slightly tighter at a spread of 57 bps.

Ford Credit prints

Ford Motor Credit priced $1.5 billion of senior notes (Baa2/BBB/BBB) in two parts on Monday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $600 million of five-year floating-rate notes at par to yield Libor plus 108 bps.

Ford Motor Credit priced $900 million of 2.979% five-year notes at par to yield a spread of Treasuries plus 115 bps.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBS Securities Inc. and SG Americas Securities, LLC were the bookrunners.

Proceeds will be used to purchase receivables, for loans and for debt retirement.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

International Paper prices

International Paper sold $1 billion of 4.35% senior notes due Aug. 15, 2048 (Baa2/BBB/) on Monday with a spread of 145 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.898 to yield 4.356%.

BofA Merrill Lynch, SMBC Nikko Securities America, Inc., BBVA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets, Credit Agricole Securities (USA) Inc., DNB Markets Inc., J.P. Morgan Securities, Mizuho Securities USA Inc. and Regions Securities LLC were the bookrunners.

Proceeds will be used to make a voluntary cash contribution to the company’s pension plan.

International Paper is a packaging and paper manufacturing company based in Memphis.

American Airlines upsizes

American Airlines priced an upsized $796,898,000 offering of class AA and class A pass-through certificates, series 2017-2, on Monday, according to a market source.

The company sold $544,644,000 of 3.35% class AA certificates (Aa3//AA) at a spread of Treasuries plus 105.9 bps.

American Airlines priced $252,254,000 of 3.6% class A certificates (A2//A) at a Treasuries plus 130.9 bps spread.

The deal was upsized from $638,914,000, or $436,669,000 of class AA certificates and $202,245,000 of class A certificates, according to an FWP filed with the SEC.

Both tranches have a final distribution date of Oct. 15, 2029 and an 8.7-year weighted average life. The final legal distribution date for both classes is April 15, 2031.

Goldman Sachs, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities were the structuring agents and lead bookrunners.

Proceeds will be used to finance 30 aircraft that were delivered new to American Airlines between October 2015 and August 2016 or are scheduled to be delivered between September 2017 and April 2018.

The commercial airline, which is a subsidiary of AMR Corp., is based in Fort Worth.

ERP prices two tranches

ERP Operating priced $700 million of fixed-rate notes (A3/A-/) in two tranches on Monday, according a market source.

The company sold $400 million of 3.25% 10-year notes with a spread of Treasuries plus 98 bps.

ERP Operating priced $300 million of 4% 30-year notes with a Treasuries plus 123 bps spread.

Both tranches priced on the tight side of guidance.

BofA Merrill Lynch, Citigroup Global Markets, Morgan Stanley, J.P. Morgan Securities and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for working capital and general company purposes, including repayment of all or a portion of the notes issued under the company’s commercial paper program and all or some of the balance under its unsecured revolving credit facility, according a 424B5 filing with the SEC.

The unit of apartment property builder and manager Equity Residential is based in Chicago.

Tyco sells new, reopened notes

Tyco Electronics Group sold $500 million of guaranteed senior notes (Baa1/A-/A-) in two tranches, including an add-on, on Monday, according to an FWP filing with the SEC.

Tyco priced a $100 million reopening of its 3.45% notes due Aug. 1, 2024 at 103.542 to yield 2.869% and a spread of Treasuries plus 58 bps.

The company originally sold $250 million of the 3.45% notes on July 28, 2014 at 99.614 to yield 3.496%, or Treasuries plus 100 bps. The total outstanding now is $350 million.

Tyco sold $400 million of new 3.125% 10-year notes at 99.199 to yield 3.219% and with a spread of Treasuries plus 93 bps.

Citigroup Global Markets, Goldman Sachs and BofA Merrill Lynch were the bookrunners.

Proceeds will be used for general corporate purposes.

The notes will be fully and unconditionally guaranteed by parent company TE Connectivity Ltd.

Tyco Electronics Group is a Luxembourg-based holding company.

Boston Gas in primary

Boston Gas sold $500 million of 3.15% 10-year senior notes (A3/A-/) on Monday at a spread of 87 bps over Treasuries, according to a market source.

Goldman Sachs, J.P. Morgan Securities, Deutsche Bank Securities and Lloyds Securities Inc. were the lead managers.

Boston Gas is a gas distribution company based in Waltham, Mass.

DTE Electric sells bonds

DTE Electric sold $440 million of 30-year 2017 series B general and refunding mortgage bonds (Aa3/A/A+) with a 3.75% coupon at 99.946 to yield 3.753% on Monday, according to an FWP filed with the SEC.

The bonds priced with a spread of Treasuries plus 85 bps.

Barclays, BofA Merrill Lynch, Wells Fargo Securities, BNY Mellon Capital Markets LLC, Mizuho Securities and UBS Securities LLC were the bookrunners.

Proceeds will be used to repay $300 million of the company’s 2008 series G 5.6% senior notes due June 15, 2018 on Aug. 16, to repay short-term borrowings and for general corporate purposes.

The electric company is based in Allentown, Pa.

Hubbell raises $300 million

Hubbell priced $300 million of 3.15% 10-year senior notes (Baa1/A/A) on Monday at 99.20 to yield 3.244% and a spread of 95 bps over Treasuries, according to an FWP filed with the SEC.

J.P. Morgan Securities and BofA Merrill Lynch were the bookrunners.

Proceeds will be used to redeem the company’s $300 million of 5.95% senior notes due 2018 and for general corporate purposes.

The electrical and electronic products company is based in Shelton, Conn.

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