eBay sees demand, prices day’s lone new issue; spreads firm; Oracle improves

By Aleesia Forni and Cristal Cody

Virginia Beach, July 23 – eBay Inc. came to Wednesday’s investment-grade primary market, pricing the day’s only new bond offering.

The global commerce and payments platform sold $3.5 billion of senior notes in five tranches due 2017, 2019, 2021 and 2024.

The lone deal was met with solid demand from investors, seeing an orderbook that was nearly three times oversubscribed.

The fixed-rate tranches of the offering sold around 15 basis points tighter compared to initial price talk.

In other primary news, Fannie Mae announced plans to price a five-year offering of Benchmark Notes.

eBay’s new deal brings the week’s total supply to $12 billion, just shy of what sources had predicted to be around a $15 billion week.

Activity in the high-grade primary market is expected to remain measured going forward.

“Not expecting much for the rest of the week,” a source said.

Investment-grade bond spreads tightened modestly on Wednesday, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 58 bps.

In the secondary market, Oracle Corp.’s 4.3% senior notes due 2034 traded better over the day, a source said.

eBay five-parter

Wednesday’s primary market saw eBay price $3.5 billion of senior notes (A2/A/A) in five parts, according to a market source and an FWP filed with the Securities and Exchange Commission.

The offering included a $450 million tranche of three-year floaters priced at par to yield Libor plus 20 bps.

The notes sold on top of talk, which had tightened from earlier guidance in the high-20 bps area over Libor.

A second tranche was $400 million of five-year notes sold at par to yield Libor plus 48 bps.

There was also $1.15 billion of 2.2% five-year notes sold at 99.788 to yield 2.245%, or Treasuries plus 60 bps.

Pricing came at the tight end of the Treasuries plus 65 bps area talk, which had firmed from guidance in the Treasuries plus 75 bps area.

A $750 million tranche of 2.875% seven-year notes priced with a spread of Treasuries plus 80 bps.

Pricing was at 99.779 to yield 2.91%.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 85 bps. Initial guidance was in the area of Treasuries plus 95 bps.

Finally, $750 million of 3.45% notes due 2024 priced at 99.899 to yield 3.462%, or Treasuries plus 100 bps.

Pricing was at the tight end of talk, set in the Treasuries plus 105 bps area, having firmed from guidance in the Treasuries plus 115 bps area.

Proceeds will be used for general corporate purposes, including the repayment of outstanding commercial paper borrowings.

Bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC.

The global commerce and payments platform is based in San Jose, Calif.

Fannie Mae plans Benchmark Notes

Fannie Mae joined the forward calendar on Wednesday, announcing plans to issue Benchmark Notes due Sept. 12, 2019, according to a company press release.

The issue will settle on July 28.

Citigroup Global Markets, Deutsche Bank Securities Inc. and Nomura Securities International Inc. are the joint lead managers.

The co-managers include BNP Paribas Securities Corp. LLC, Drexel Hamilton LLC, FTN Financial Capital Markets, Muriel Siebert & Co. and Stifel Nicolaus & Co., Inc.

The government-backed mortgage lender is based in Washington, D.C.

Oracle stronger

Oracle’s 4.3% notes due 2034 (A1/A+/A+), quoted about 4 bps better at 89 bps offered earlier in the day, traded higher over the afternoon, a market source said.

The issue rose to 102.76 to yield 4.093%, up from where the bonds traded at 102.23 to yield 4.132% over the morning, according to a market source. The notes traded last on Tuesday at 102.26 to yield 4.13%.

Oracle sold $1.75 billion of the 20-year notes at Treasuries plus 95 bps, or 99.96, to yield 4.303%, on June 30.

The computer software and technology company is based in Redwood City, Calif.

Bank, broker CDS costs mostly flat

Investment-grade bank and brokerage credit default swap costs were mostly flat on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs were 1 bp lower at 68 bps bid, 71 bps offered. Citigroup Inc.’s CDS costs were flat at 66 bps bid, 69 bps offered. JPMorgan Chase & Co.’s CDS costs were also flat at 56 bps bid, 59 bps offered. Wells Fargo & Co.’s CDS costs remained unchanged at 46 bps bid, 51 bps offered.

Merrill Lynch’s CDS costs were flat at 73 bps bid, 77 bps offered. Morgan Stanley’s CDS costs were also unchanged at 66 bps bid, 71 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 1 bp lower at 73 bps bid, 78 bps offered.

Paul Deckelman contributed to this review.

© 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.