Roche, Westpac Banking, PG&E do deals; Hewlett-Packard mixed; Charter flat to tighter

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 2 – Roche Holdings Inc., Westpac Banking Corp., Pacific Gas & Electric Co. and Southwest Airlines Co. were among the names kicking off the new month on Monday, pricing more than $5.8 billion of investment-grade paper during the session.

As was expected, high-grade issuers stormed the primary to take advantage of excellent market conditions, beginning what many sources predict could be another $100 billion-plus month for November.

One source noted that the market “feels like it can handle the supply we’re expecting” ahead of the late-year holiday season.

Deals continued to see significant tightening and solid investor reception almost across the board.

Bonds from Mid-America Apartments LP, Unum Group and ERAC USA Finance LLC were upsized prior to pricing at the tight end of guidance.

Around $30 billion of new investment-grade supply is expected to price during the first week of November.

Investment-grade bonds were mixed in secondary trading over the day.

Hewlett Packard Enterprise Co.’s senior notes (Baa2/BBB/A-) traded 1 bp softer to 3 bps tighter in the first trading day following Hewlett-Packard Co.’s official split into HP Inc. and Hewlett Packard Enterprise.

Charter Communications Inc.’s bonds headed out flat to 4 bps tighter in the secondary market.

Dollar General Corp.’s 4.15% senior notes due 2025 eased 2 bps during the session.

In the bank and financial space, JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 were unchanged.

The Markit CDX North American Investment Grade 25 index firmed 2 bps on Monday to close at a spread of 77 bps.

Roche prices tight

Switzerland-based drug maker Roche Holdings priced $1 billion of 3% 10-year senior notes (A1/AA) on Monday with a spread of Treasuries plus 90 bps, a source away from the trade said.

The notes sold at the tight side of price guidance.

Pricing was at 99.256 to yield 3.087%.

BNP Paribas Securities Corp., Barclays and UBS Securities LLC were the bookrunners.

The notes are guaranteed by Roche Holding Ltd., and proceeds will be used for general corporate purposes.

Westpac covered bond

Also on Monday, Westpac Banking sold $1 billion 2.25% five-year covered bonds at mid-swaps plus 80 bps, according to an informed source.

The Rule 144A and Regulation S notes (Aaa/AAA) sold in line with initial price thoughts.

Bookrunners were Citigroup Global Markets Inc., HSBC Securities, Morgan Stanley, RBC Capital Markets LLC and Westpac.

The banking organization is based in Sydney, Australia.

ERAC upsizes

ERAC USA Finance was in the market with an upsized $800 million issue of senior notes (Baa1/BBB) due 2025 priced at Treasuries plus 165 bps, a market source said.

The deal was upsized from $500 million and priced at the tight end of guidance.

Bookrunners for the Rule 144A and Regulation S deal were BofA Merrill Lynch, Mizuho Securities and Wells Fargo Securities LLC.

The financing subsidiary of Enterprise Rent-A-Car Co. is based in St. Louis.

PG&E two-parter

And Pacific Gas & Electric sold a $500 million offering of senior notes (A3/BBB/A-) in two parts on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The issue included a $200 million tap of the company’s 3.5% senior notes due June 15, 2025 priced at Treasuries plus 115 bps. Pricing was at 101.358 to yield 3.33%.

The original $400 million was sold at Treasuries plus 115 bps on June 9.

Also, $450 million of 4.25% bonds due 2046 sold at 98.13 to yield 4.362%, or Treasuries plus 140 bps.

Both tranches came at the tight end of guidance.

BofA Merrill Lynch, Goldman Sachs & Co., RBC Capital Markets and Wells Fargo are the joint bookrunners.

The San Francisco-based electric and natural gas utility will use the proceeds for general corporate purposes, including the repayment of commercial paper.

Southwest Airlines prices

Dallas-based airline Southwest priced $500 million of 2.65% five-year senior notes (Baa1/BBB/BBB+) on Monday at Treasuries plus 112.5 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.907 to yield 2.67%.

The notes sold at the tight end of price guidance set in the area of Treasuries plus 115 bps, coming inside initial talk set in the area of Treasuries plus 135 bps.

Citigroup, BofA Merrill Lynch and Barclays are the bookrunners.

Proceeds will be used for general corporate purposes.

Mid-America upsizes

Mid-America Apartments sold an upsized $400 million offering of 4% 10-year senior notes at Treasuries plus 195 bps on Monday, according to an FWP filed with the SEC.

The issue (Baa2/BBB/BBB) was upsized from $350 million and priced at 98.99 to yield 4.124%.

Guidance was set in the 200 bps area over Treasuries after having tightened from initial talk set in the Treasuries plus 220 bps area.

J.P. Morgan Securities LLC, Jefferies, U.S. Bancorp Investments Inc., Wells Fargo and Citigroup are the joint bookrunners.

Proceeds will be used to repay borrowings under the company’s secured credit facility, to repay borrowings under its revolving credit facility and for general corporate purposes.

Mid-America Apartments is a Memphis-based real estate investment trust.

United Airlines pass-throughs

United Airlines, Inc. priced $433,652,000 in two classes of series 2015-1 pass-through certificates, according to an FWP filing with the SEC.

The deal included $333,652,000 of 3.45% class AA certificates (Aa3/AA) with a final expected distribution date of Dec. 1, 2027 priced at par.

There was also $100 million of 3.7% class A certificates (A2/A) with a final expected distribution date of Dec. 1, 2022 sold at par.

Morgan Stanley and Credit Suisse Securities (USA) LLC are the lead bookrunners. The other bookrunners are Citigroup, Deutsche Bank Securities Inc., Goldman Sachs, Credit Agricole Securities (USA) Inc. and Barclays.

Proceeds will be used to acquire equipment notes that will be issued to finance the purchase of 10 new aircraft delivered to United between August 2015 and December 2015, eight of which have already been delivered.

The airline is based in Chicago.

Morgan Stanley floaters

Morgan Stanley priced $500 million of floating-rate four-year senior notes (A3/A-/A) on Monday at par to yield Libor plus 115 bps, according to an FWP filed with the SEC.

Morgan Stanley was the bookrunner.

The financial services company is based in New York City.

Unum upsizes

Unum Group priced an upsized $275 million of 3.875% 10-year senior notes (Baa2/BBB) at Treasuries plus 177 bps, according to a market source.

The notes were upsized from $250 million and sold at the tight side of guidance set in the Treasuries plus 180 bps area following initial talk set in the area of 185 bps over Treasuries.

Pricing was at 99.328 to yield 3.957%.

Proceeds from the sale will be used for general corporate purposes, which may include the repayment of short-term debt.

The joint bookrunners are JPMorgan, Morgan Stanley, Citigroup and UBS Securities.

The employee benefits provider is based in Chattanooga, Tenn.

Consumers Energy prices

Rounding out the issues priced on Monday, Consumers Energy Co. sold $250 million of 4.1% 30-year first mortgage bonds (A1/A/A-) with a 115 bps spread over Treasuries, according to a market source and an FWP filing with the SEC.

The notes sold at the tight end of the Treasuries plus 120 bps area guidance.

Pricing was at 99.913 to yield 4.105%.

BNP Paribas, Citigroup, Deutsche Bank Securities, Mizuho Securities USA Inc., RBC Capital Markets, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. are the joint bookrunners.

The company plans to use the proceeds from the offering for general corporate purposes.

Consumers Energy is an electric and gas utility based in Jackson, Miss.

Hewlett-Packard mixed

Hewlett Packard Enterprise’s 4.9% notes due 2025 eased 1 bp to 290 bps bid on Monday, a market source said.

The company sold $2.5 billion of the notes on Sept. 30 at Treasuries plus 290 bps.

Hewlett Packard Enterprise’s 6.35% bonds due 2045 firmed 3 bps during the session to 363 bps bid.

The company sold $1.5 billion of the bonds at a spread of Treasuries plus 350 bps in the Oct. 30 offering.

Hewlett Packard Enterprise is a Palo Alto, Calif.-based provider of technology services.

Charter mostly better

Charter Communications’ 4.908% notes due 2025 traded 4 bps tighter at 252 bps bid, according to a market source.

The company sold $4.5 billion of the notes (Ba1/BBB-) on July 9 at a spread of Treasuries plus 260 bps.

Charter Communications’ 6.484% notes due 2045 were unchanged at 329 bps bid.

The company sold $3.5 billion of the bonds (Ba1/BBB-) in the July 9 offering at Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

Dollar General eases

Dollar General’s 4.15% senior notes due 2025 eased 2 bps on Monday to 208 bps offered, a market source said.

Dollar General sold $500 million of the notes (Baa3/BBB) on Oct. 15 at a spread of Treasuries plus 215 bps.

The discount retailer is based in Goodlettsville, Tenn.

JPMorgan bonds stable

JPMorgan Chase’s 4.25% subordinated bonds due 2027 were unchanged in secondary trading at 208 bps bid, according to a market source.

JPMorgan Chase sold $2 billion of the bonds (Baa1/A-/A) on Sept. 23 at Treasuries plus 215 bps.

The financial services company is based in New York City.

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