IBM prices $20 billion; Bell Canada, Reinsurance, AvalonBay, Honda, EIB among issuers

By Cristal Cody

Tupelo, Miss., May 8 – International Business Machines Corp. priced a $20 billion eight-part offering of notes in the biggest bond deal of the year on Wednesday, a day after Bristol-Myers Squibb Co. held the distinction of the year’s largest offering after pricing $19 billion of senior notes in nine tranches.

IBM plans to use the proceeds to fund its acquisition of Red Hat, Inc. and for general corporate purposes.

In addition on Wednesday, Bell Canada priced $600 million of 30-year notes.

Reinsurance Group of America, Inc. sold $600 million of 10-year senior notes.

AvalonBay Communities, Inc. priced an upsized $450 million of 10-year medium-term notes during the session.

USAA Capital Corp. sold $400 million of two-year senior notes.

American Honda Finance Corp. brought $300 million of one-year floating-rate medium-term notes to the primary market.

Also on Wednesday, the European Investment Bank priced $3 billion of five-year global notes.

Week to date, more than $44 billion of high-grade bonds have priced.

Heavy volume of about $40 billion to $45 billion was expected by market sources for the week.

Additional issues are in the pipeline from T-Mobile U.S. Inc. and Fidelity National Information Services, Inc. following roadshows.

T-Mobile U.S. finished a roadshow on Wednesday for a bond offering to fund its acquisition of Sprint Corp.

Fidelity National Information Services is holding a roadshow and fixed investor calls that began on Tuesday and conclude Friday for a multi-currency bond deal to help finance its acquisition of Worldpay Inc.

The Markit CDX North American Investment Grade 32 index softened about 1 basis point on Wednesday to end at a spread of 62 bps.

IBM brings eight tranches

International Business Machines priced $20 billion of notes (A1/A/A) in eight tranches on Wednesday, according to a market source.

The company sold $1.5 billion of two-year floating-rate notes at Libor plus 40 bps.

IBM priced $1.5 billion of 2.8% two-year fixed-rate notes with a spread of Treasuries plus 50 bps.

A $2.75 billion offering of 2.85% three-year notes priced with a 60 bps over Treasuries spread.

The company sold $3 billion of 3% five-year notes at an 80 bps over Treasuries spread.

A $3 billion tranche of 3.3% seven-year notes prices with a Treasuries plus 95 bps spread.

IBM brought $3.25 billion of 3.5% 10-year notes to the primary market at a spread of 105 bps over Treasuries.

A $2 billion tranche of 4.15% 20-year notes priced at a spread of 130 bps over Treasuries.

In the final tranche, the company sold $3 billion of 4.25% 30-year notes at a spread of 145 bps over Treasuries.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., MUFG, BofA Merrill Lynch and Mizuho Securities USA Inc. were the bookrunners.

The company is an information technology and computer company based in Armonk, N.Y.

Bell Canada prices $600 million

Bell Canada priced $600 million of 4.3% 30-year notes on Wednesday at a spread of 142 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa1/BBB+/DBRS: BBB (high)) priced at 99.802 to yield 4.311%.

BofA Merrill Lynch, Barclays, BMO Capital Markets Corp., CIBC World Markets Corp. and Citigroup Global Markets were the bookrunners.

The bonds are fully and unconditionally guaranteed by parent company BCE Inc.

The telecommunications company is based in Montreal.

Reinsurance Group prints

Reinsurance Group of America sold $600 million of 3.9% 10-year senior notes on Wednesday at a spread of 145 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa1/A/) priced at 99.754 to yield 3.93%.

The bookrunners were J.P. Morgan Securities, BofA Merrill Lynch, RBC Capital Markets LLC, Wells Fargo Securities LLC, Barclays and Mizuho Securities.

Reinsurance Group is a Chesterfield, Mo.-based reinsurance company.

AvalonBay in primary

AvalonBay Communities priced an upsized $450 million of 3.3% 10-year medium-term notes (A3/A-/) on Wednesday at a spread of 82 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The notes priced at 99.956.

Initial price talk was in the Treasuries plus 100 bps bps area.

The deal was upsized from $350 million.

Barclays, J.P. Morgan Securities and Wells Fargo Securities were the bookrunners.

The manager and developer of apartment communities is based in Arlington, Va.

USAA prices $400 million

USAA Capital priced $400 million of 2.625% senior notes due June 1, 2021 (Aa1/AA/) on Wednesday at a spread of 37.5 bps over Treasuries, a market source said.

Price guidance was in the Treasuries plus 40 bps area.

Goldman Sachs and Wells Fargo Securities were the bookrunners.

USAA Capital is a San Antonio, Texas-based insurance holding company and subsidiary of United Services Automobile Association.

American Honda sells floaters

American Honda Finance (A2/A/) priced $300 million of floating-rate medium-term notes due May 13, 2020 (A2/A/) on Wednesday at par to yield Libor plus 9 bps, according to an FWP filing with the SEC.

The interest rate will initially reset on Aug. 13 and will reset on each interest payment date.

Deutsche Bank Securities Inc. was the bookrunner.

American Honda Finance is a Torrance, Calif.-based financing arm of American Honda Motor Co.

EIB prices $3 billion

European Investment Bank (Aaa/AAA/AAA) priced $3 billion of 2.25% five-year global notes on Wednesday at a spread of mid-swaps plus 6 bps, or Treasuries plus 9.7 bps, according to a market source.

The notes due June 24, 2024 were initially talked to price in the mid-swaps plus 7 bps area.

J.P. Morgan Securities plc, Citigroup Global Markets and Morgan Stanley & Co. LLC were the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.