FHLB, Westlake Chemical, Owens Corning price; Microsoft bonds mixed; credit spreads tighten

By Cristal Cody

Eureka Springs, Ark., Aug. 3 – Pricing action remained strong in the investment-grade market with more than $5 billion of bonds priced on Wednesday.

The Federal Home Loan Bank System came with its previously announced $3.5 billion sale of three-year Global Notes.

Westlake Chemical Corp. priced $1.45 billion of 10- and 30-year senior notes.

Owens Corning sold $400 million of 10-year senior notes during the session.

Columbia Property Trust Operating Partnership, LP raised $350 million in an offering of 10-year senior notes.

In addition, Barclays plc and J.P. Morgan Chase & Co. planned to tap the market, a source said.

The Markit CDX North American Investment Grade index opened the session about 1 basis point tighter and ended the day 2 bps better at a spread of 75 bps.

In the secondary market, Microsoft Corp.’s $19.75 billion of senior notes (Aaa/AAA/) priced in seven parts on Monday traded flat from issuance to about 4 bps tighter early Wednesday.

FHLB raises $3.5 billion

The Federal Home Loan Bank System sold $3.5 billion of 0.875% three-year Global Notes at 99.808 to yield 0.94% on Wednesday, according to a news release.

The notes priced with a spread of 16 bps plus Treasuries.

Barclays, TD Securities (USA) LLC and Wells Fargo Securities LLC were the lead managers.

The deal was distributed among 16 firms.

U.S. investors took 76% of the notes, while 11% went to investors in Europe, 9% to Asia and 4% to other countries.

Investment advisers/fund managers received 53% of the notes. Financial institutions took 22%, central banks purchased 16%, state and local governments bought 8%, and other investors took the remaining 1% of notes.

The government-sponsored banks for financial institutions are based in Washington, D.C.

Westlake Chemical prices

Westlake Chemical priced $1.45 billion of 10- and 30-year senior notes (Baa3/BBB+/BBB) in a Rule 144A/Regulation S-eligible offering on Wednesday, according to a market source and a company news release.

The company sold $750 million of 3.6% 10-year notes and $700 million of 5% 30-year notes.

Deutsche Bank Securities Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the lead managers.

The notes are expected to be guaranteed, jointly and severally on a senior basis, by some Westlake Chemical subsidiaries.

Westlake Chemical intends to use the proceeds, together with proceeds from other financing transactions and cash on hand, to finance the $2.3 billion acquisition of Axiall Corp., prepay Axiall’s $250 million term loan and pay related fees and expenses.

The manufacturer and supplier of petrochemicals, polymers and building products is based in Houston.

Columba Property Trust prints

Columbia Property Trust Operating Partnership brought to market $350 million of 3.65% 10-year senior notes at 215 bps plus Treasuries on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.626 to yield 3.695%.

JPMorgan, Morgan Stanley & Co. LLC, Wells Fargo, Jefferies LLC and U.S. Bancorp Investments, Inc. were the bookrunners.

The notes are guaranteed by parent company Columbia Property Trust, Inc.

Proceeds will be used to redeem the company’s outstanding 2018 notes and for general corporate purposes.

Columbia Property Trust is an Atlanta-based equity real estate investment trust.

Owens Corning sells notes

Owens Corning priced $400 million of 3.4% 10-year senior notes with a spread of 190 bps over Treasuries on Wednesday, according to an FWP filing with the SEC.

The notes (Ba1/BBB/BBB-) priced at 99.587 to yield 3.449%.

BofA Merrill Lynch, Citigroup Global Markets Inc., Wells Fargo and Goldman Sachs & Co. were the bookrunners.

Owens Corning plans to use the proceeds for general corporate purposes, including to exercise a make-whole call to redeem its outstanding 6.5% senior notes due Dec. 1, 2016 and to repay outstanding debt, including but not limited to a portion of borrowings under its securitization facility.

Owens Corning is a Toledo, Ohio-based maker of composite building materials.

Microsoft mixed

Microsoft’s 2.4% notes due 2026 were quoted at 87 bps offered in secondary trading early on Wednesday, a source said.

The company sold $4 billion of the 10-year notes on Monday at a spread of 90 bps plus Treasuries.

Microsoft’s 3.7% notes due 2046 improved to 141 bps offered, tighter than where the $4.5 billion tranche priced at 145 bps plus Treasuries in Monday’s sale.

The company’s 3.95% notes due 2056 were unchanged early in the session at 180 bps area.

Microsoft sold $2.25 billion of the 40-year bonds on Monday at 180 bps plus Treasuries.

The computer software company is based in Redmond, Wash.

© 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.