Published on 10/24/2012 in the Prospect News Investment Grade Daily.
New Issue: Marathon Oil sells $2 billion of notes in three-, 10-year tranches
By Andrea Heisinger
New York, Oct. 24 - Marathon Oil Corp. priced $2 billion of senior notes (Baa2/BBB/BBB) in two maturities on Wednesday, an informed source told Prospect News.
A $1 billion tranche of 0.9% three-year notes priced at 99.988 to yield 0.904% with a spread of Treasuries plus 50 basis points. The notes were priced significantly tighter than the Treasuries plus 70 bps area where they were talked.
There is a make-whole call at Treasuries plus 10 bps.
There was also $1 billion of 2.8% 10-year notes sold at 99.757 to yield 2.828% with a spread of 105 bps over Treasuries. The tranche also priced much tighter than guidance in the 125 bps area.
The notes have a make-whole call at 20 bps over Treasuries.
The sale saw about $8 billion in demand, including $3.9 billion on the three-year notes and $4.1 billion for the 10-year notes, the source said.
Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were the active bookrunners. Passive bookrunners were J.P. Morgan Securities LLC, RBS Securities Inc. and UBS Securities LLC.
Proceeds will be used to repay outstanding commercial paper and for general corporate purposes.
Marathon was last in the market with a $1.5 billion sale of bonds in two tranches on Feb. 11, 2009. That offering included a 7.5% 10-year note priced at 487.5 bps over Treasuries.
The international energy company for oil sands mining and gas exploration and production is based in Houston.
| Issuer: | Marathon Oil Corp.
|
| Issue: | Senior notes
|
| Amount: | $2 billion
|
| Bookrunners: | Citigroup Global Markets Inc., Morgan Stanley & Co. LLC (active), J.P. Morgan Securities LLC, RBS Securities Inc., UBS Securities LLC
|
| Co-managers: | DNB Markets, Inc., HSBC Securities (USA) Inc., Mitsubishi UFJ Securities (USA), Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc., Lloyds Securities Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, SMBC Nikko Capital Markets Ltd., SG Americas Securities, LLC, BNY Mellon Capital Markets, LLC, Comerica Securities, Inc., Deutsche Bank Securities Inc., Fifth Third Securities, Inc., Goldman Sachs & Co., Loop Capital Markets LLC, Standard Chartered Bank
|
| Trade date: | Oct. 24
|
| Settlement date: | Oct. 29
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| Three-year notes
|
| Amount: | $1 billion
|
| Maturity: | Nov. 1, 2015
|
| Coupon: | 0.9%
|
| Price: | 99.988
|
| Yield: | 0.904%
|
| Spread: | Treasuries plus 50 bps
|
| Call: | Make-whole at Treasuries plus 10 bps
|
| Price talk: | 70 bps area
|
|
|
| 10-year notes
|
| Amount: | $1 billion
|
| Maturity: | Nov. 1, 2022
|
| Coupon: | 2.8%
|
| Price: | 99.757
|
| Yield: | 2.828%
|
| Spread: | Treasuries plus 105 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 125 bps area
|
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