Tampa Electric prices senior notes; ConocoPhillips modestly better; Apple, AT&T tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, May 15 – Tampa Electric Co. sold $250 million of 30-year bonds on Friday, capping off a week that hosted more than $43 billion of new investment-grade paper and pushing the total supply for May to more than $92 billion.

The notes sold around 13 basis points tighter than initial price thoughts and attracted an order book that was more than three times oversubscribed.

Meantime, Lipper reported $958 million of inflows into corporate investment-grade funds for the week ended May 13.

This follows last week’s $531.1 million of outflows and puts the year-to-date total to roughly $28.1 billion of inflows.

The market’s tone remains constructive even with the staggering amount of new paper the primary has seen in recent weeks, and sources are predicting another bout of issuance for next week.

Around $25 billion of paper is expected to price ahead of the extended Memorial Day-holiday weekend.

New investment-grade bonds headed out mostly better on Friday, while credit spreads improved.

ConocoPhillips Co.’s senior notes (A1/A/) that priced on Wednesday traded about 1 bp better.

Shell International Finance BV’s 2.125% notes due 2020 were unchanged in the secondary market.

Apple Inc.’s bonds (Aa1/AA+/) priced in the previous week traded 3 bps to 5 bps tighter over the day.

Oracle Corp.’s senior notes (A1/AA-/A+) brought in late April were mixed.

AT&T Inc.’s new notes (/BBB+/A-) traded about 1 bp to 3 bps tighter.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 63 bps on Friday.

Tampa Electric prices

Tampa Electric priced a $250 million offering of 4.2% 30-year senior notes at Treasuries plus 127 bps on Friday, according to a market source.

The notes (A2/BBB+/A-) priced at 99.814 to yield 4.211%.

Pricing was at the tight end of guidance set in the Treasuries plus 130 bps area after having tightened from initial talk in the 140 bps area over Treasuries.

BNY Mellon Capital Markets, LLC, MUFG, RBC Capital Markets LLC and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Fifth Third Securities Inc., Scotia Capital (USA) Inc. and Williams Capital Group, LP are the co-managers.

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

The Tampa, Fla.-based electric and gas utility is a subsidiary of TECO Energy, Inc.

ConocoPhillips edges tighter

ConocoPhillips’ 2.2% notes due 2020, which priced on Wednesday in a $500 million offering at 65 bps over Treasuries, firmed 1 bp to 61 bps bid on Friday, a market source said.

The company’s 3.35% notes due 2025 improved 1 bp to 107 bps bid in secondary trading, the source said.

ConocoPhillips sold $500 million of the 10-year notes on Wednesday at Treasuries plus 110 bps.

The energy company is based in Houston.

Shell unchanged

Shell International Finance’s 2.125% notes due 2020 traded flat on the day at 54 bps bid, a market source said.

Shell sold $2 billion of the five-year notes (A1/AA/) on May 6 at a spread of Treasuries plus 60 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

Apple firmer

Apple’s 3.2% notes due 2025 firmed 5 bps on Friday to 92 bps bid, a market source said.

The company sold $2 billion of the 10-year notes at Treasuries plus 100 bps on May 6.

Apple’s 4.375% notes due 2045 firmed 3 bps to 130 bps bid, the source said.

The company sold $2 billion of the bonds in the previous week’s offering at Treasuries plus 140 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

Oracle mixed

Oracle’s 2.95% notes due 2025 eased 1 bp to 99 bps bid in Friday’s session, a source said.

Oracle sold $2.5 billion of the notes on April 28 at Treasuries plus 100 bps.

The company’s 4.125% bonds due 2045, which priced in a $2 billion tranche at 145 bps over Treasuries in the April sale, firmed 6 bps to 136 bps bid, the source said.

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

AT&T better

AT&T’s 2.45% notes due 2020 edged 1 bp tighter to 102 bps on Friday, according to a market source.

The company sold $3 billion of the notes on April 23 at Treasuries plus 110 bps.

AT&T’s 3.4% notes due 2025 firmed 3 bps to 151 bps bid on Friday, the source said.

The company sold $5 billion of the notes in the April offering at Treasuries plus 150 bps.

The telecommunications company is based in Dallas.

Bank/brokerage CDS costs flat

Investment-grade bank and brokerage CDS prices were flat on Friday, according to a market source.

Bank of America Corp.’s CDS costs were unchanged at 66 bps bid, 68 bps offered. Citigroup Inc.’s CDS costs were also unchanged at 76 bps bid, 78 bps offered. JPMorgan Chase & Co.’s CDS costs remained at 63 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs were flat at 43 bps bid, 47 bps offered.

Merrill Lynch’s CDS costs were unchanged at 68 bps bid, 72 bps offered. Morgan Stanley’s CDS costs were also flat at 79 bps bid, 81 bps offered. Goldman Sachs Group, Inc.’s CDS costs were unchanged at 84 bps bid, 87 bps offered.

Stephanie N. Rotondo contributed to this review

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