American Honda, Penske, Trans-Allegheny price; telecom mixed; spreads weaken

By Aleesia Forni

Virginia Beach, Dec. 8 – American Honda Finance Corp., Penske Truck Leasing Co. LP, Trans-Allegheny Interstate Line Co. and AIG Global Funding issued bonds during a mostly positive session for investment-grade bonds.

American Honda sold $1.5 billion of three-year senior notes in fixed- and floating-rate tranches.

Meanwhile, Trans-Allegheny Interstate Line and AIG Global Funding were each in the primary with upsized offerings of senior notes.

Oklahoma Gas & Electric Co. was also in the market with a $250 million offering of notes due 2044 priced at the tight end of talk.

However, Penske saw some pushback from investors with its new $500 million offering of notes.

The notes sold on top of price talk, which was widened to 140 basis points over Treasuries from initial price thoughts in the 135 bps area.

Sources are expecting the primary’s pace to slow compared to last week’s frenzied $49 billion week.

Around $15 billion of new issuance is expected to price this week.

Investment-grade credit spreads opened softer and ended the day 2 bps weaker, according to market sources.

The Markit CDX North American Investment Grade series 23 index eased 2 bps to a spread of 65 bps.

New issues from Penske and Oklahoma Gas & Electric priced late afternoon and were not seen in aftermarket trading, according to market sources.

American Honda Finance’s new fixed-rate notes traded wrapped around issuance as the session closed, a trader said.

Investment-grade bonds were mostly mixed in secondary trading, sources said.

AT&T Inc.’s 3.9% notes due 2024 tightened 3 bps over the session, according to a market source.

Verizon Communications Inc.’s 3.5% notes due 2024 eased 3 bps, a source said.

In other trading, JPMorgan Chase & Co.’s 3.625% senior notes due 2024 were flat on the day, a market source said.

American Honda two-parter

American Honda sold $1.5 billion of senior notes due 2017 in fixed- and floating-rate tranches, according to a market source.

There was $500 million of three-year floaters priced at par to yield Libor plus 31 bps.

A $1 billion tranche of 1.55% notes due 2017 sold at Treasuries plus 52 bps.

Pricing was at the tight end of talk.

Proceeds will be used for general corporate purposes.

Barclays, Credit Suisse Securities (USA) LLC, Mizuho Securities (USA) Inc. and RBS Securities Inc. were the bookrunners.

American Honda Finance’s new fixed-rate tranche traded mostly unchanged at 52 bps bid, 49 bps offered in the secondary market, a trader said.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Trans-Allegheny upsizes

Trans-Allegheny Interstate Line priced an upsized $550 million of senior notes (A3/BBB-/) due 2025 on Monday at Treasuries plus 160 bps, according to a market source.

The notes sold at the tight end of talk.

Pricing was at 99.924 to yield 3.859%.

Barclays, J.P. Morgan Securities Inc., MUFG and Scotia Capital (USA) Inc. ran the books.

Proceeds will go to repay $450 million of 4% notes due Jan. 15, 2015 and to fund capital expenditures.

The subsidiary of utility holding company Allegheny Energy, Inc. is based in Greensburg, Pa.

Penske prices wide

Also on Monday, Penske Truck Leasing priced $500 million of 2.5% five-year notes (Baa3/BBB-/BBB+) at Treasuries plus 140 bps, according to an informed source.

The notes sold at 99.909 to yield 3.069%.

Pricing was wide of initial price thoughts.

Proceeds will be used to repay debt and for general corporate purposes.

The bookrunners were BofA Merrill Lynch, JPMorgan and Wells Fargo Securities LLC.

The global transportation services provider is based in Reading, Pa.

AIG sells FA-backed notes

AIG Global Funding priced an upsized $450 million of funding agreement-backed notes (A2/A+/) on Monday at Treasuries plus 62 bps, according to an informed source.

Pricing was at 99.907 to yield 1.682%.

The bookrunners were Barclays and Credit Suisse Securities.

The notes were sold via Rule 144A and Regulation S.

AIG Global Funding is a unit of AIG International Group Inc., a New York-based insurance and financial services company.

Oklahoma G&E prices tight

In other primary happenings, Oklahoma Gas & Electric sold $250 million of 4% senior notes (A1/A-/A+) due Dec. 15, 2044 on Monday at Treasuries plus 120 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes sold at the tight end of talk.

Pricing was at 98.214 to yield 4.104%.

Bookrunners were JPMorgan, RBS Securities, U.S. Bancorp Investments Inc. and Wells Fargo Securities.

Proceeds will be added to the company’s general funds and used to repay debt, to fund capital expenditures, for working capital and for general corporate purposes.

The electric utility is based in Oklahoma City.

AT&T improves

AT&T’s 3.9% notes due 2024 (A3/A-/A) firmed 3 bps to 130 bps bid, a market source said.

AT&T sold $1 billion of the notes on March 5, 2014 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Verizon soft

In other trading, Verizon’s 3.5% notes due 2024 (Baa1/BBB+/A-) eased 3 bps to 141 bps bid, according to a market source.

Verizon sold $2.5 billion of the notes at Treasuries plus 135 bps on Oct. 22.

The telecommunications company is based in New York City.

JPMorgan stable

JPMorgan’s 3.625% senior notes due 2024 (A3/A/A+) headed out unchanged at 118 bps bid on Monday, according to a market source.

JPMorgan sold $2 billion of the notes on May 6, 2014 at 110 bps plus Treasuries.

The financial services company is based in New York City.

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