MUFG issues bonds; Hubbell, Aon, PG&E upsize deals; Hewlett-Packard tightens; AT&T firms

By Aleesia Forni and Cristal Cody

New York, Feb. 23 – The momentum in the investment-grade bond market continued on Tuesday, with another $10.45 billion of issuance hitting the primary.

This figure, coupled with the deluge of deals priced during the week’s opening session, pushes the week’s total issuance to more than $28.45 billion in only two sessions.

Mitsubishi UFJ Financial Group, Inc. sold the largest new issue of the day, $5 billion of notes in three parts, after wrapping up a roadshow earlier this month.

Elsewhere, Welltower Inc., Hubbell Inc., Aon plc and Pacific Gas & Electric Co. each entered the primary market with upsized new deals.

American International Group Inc., meantime, sold $1.5 billion five-year notes around 27.5 basis points inside initial price thoughts.

Canadian primary action remained quiet for a second session with first-quarter bank earnings reporting season kicking off.

“We could see some bank issuance after earnings are out of the way this week,” a source said.

High-grade credit spreads softened over the day.

The Markit CDX North American Investment Grade index closed 2 bps wider at a spread of 115 bps.

Hewlett-Packard Enterprise Co.’s bonds (Baa2/BBB/A-) tightened about 9 bps to 23 bps in the secondary market over the day.

AT&T Inc.’s 4.125% notes due 2026 firmed 3 bps to 5 bps on Tuesday.

Visa Inc.’s senior notes (A1/A+) traded flat to 2 bps better during the session.

MUFJ sells $5 billion

Mitsubishi UFJ Financial priced $5 billion of senior notes (A1/A) in three tranches on Tuesday, a market source said.

A $2.1 billion tranche of 2.95% five-year notes sold at 99.792 to yield 2.995%, or Treasuries plus 180 bps.

A $400 million five-year floater priced at par to yield Libor plus 188 bps.

And $2.5 billion of 3.85% 10-year notes sold at Treasuries plus 215 bps. Pricing was at 99.86 to yield 3.867%.

All tranches were sold at the tight end of guidance and tighter than initial price thoughts.

The Tokyo-based financial services company had held a roadshow earlier this month in the United States, Europe and Asia.

The active bookrunners are Morgan Stanley & Co. LLC and MUFG. J.P. Morgan Securities LLC is a passive bookrunner.

Proceeds will be used to fund the operations of MUFG through loans.

AIG five-year notes

The session also saw American International Group sell $1.5 billion of 3.3% five-year senior notes (Baa1/A-/BBB+) inside initial price talk on Tuesday at Treasuries plus 210 bps, according to an FWP filed with the Securities and Exchange Commission.

The issue priced at 99.908 to yield 3.32%.

Bookrunners are BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and U.S. Bancorp Investments Inc.

Proceeds will be used to fund a tender offer.

The insurance company is based in New York City.

Welltower bonds

Welltower sold $700 million of 4.25% 10-year senior notes on Tuesday with a spread of Treasuries plus 260 bps, an informed source said, nearly double initial size thoughts.

Pricing was at 99.227 to yield 4.345%.

The notes (Baa2/BBB/BBB+) sold at the tight end of guidance set in the Treasuries plus 265 bps area, which tightened from talk in the Treasuries plus 275 bps area.

UBS Securities LLC and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to repay advances under the company’s unsecured credit facility and for general corporate purposes.

The Toledo, Ohio-based real estate investment trust, formerly known as Health Care REIT Inc., invests in senior housing and health-care real estate.

Aon new issue

Aon sold an upsized $750 million of 3.875% senior notes (Baa2/A-/BBB+) due Dec. 15, 2025 on Tuesday at Treasuries plus 215 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.972 to yield 3.879%.

Guidance was set in the 220 bps area over Treasuries, inside initial talk in the 237.5 bps area over Treasuries.

The notes are guaranteed by Aon Corp.

The issue was upsized from $500 million.

Proceeds from the sale will be used for general corporate purposes.

Morgan Stanley, BofA Merrill Lynch and Deutsche Bank Securities Inc. are the joint bookrunners.

The provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services is based in London.

PG&E 10-years

Pacific Gas & Electric also upsized its new issue on Tuesday, according to a market source and a filing with the SEC.

The company priced $600 million of 2.95% 10-year senior notes (A3/BBB/A-) on Tuesday at Treasuries plus 125 bps, at the tightest side of guidance set in the Treasuries plus 130 bps.

The deal sold at 99.734 to yield 2.981% and was upsized from $500 million.

Bookrunners were Barclays, BNP Paribas Securities Corp., Morgan Stanley, MUFG and Williams Capital Group.

The company expects to use the net proceeds from the offering for general corporate purposes, including to repay outstanding commercial paper.

The electric and natural gas utility is based in San Francisco.

EDC floaters

Export Development Canada priced $500 million of four-year notes (Aaa/AAA) on Tuesday at par to yield Libor plus 32 bps, a market source said.

Pricing was in line with talk set in the Libor plus 32 bps area.

The bookrunners were BNP Paribas Securities Corp., Deutsche Bank and Goldman Sachs.

Export Development Canada is an Ottawa-based government-backed agency for exporters.

Juniper adds on

In other primary happenings, Juniper Networks, Inc. priced $500 million of senior notes (Baa2/BBB) in new and reopened tranches on Tuesday, a market source said, both inside initial price thoughts.

The sale included $350 million of 3.125% three-year notes sold at 99.923 to yield 3.152%, or Treasuries plus 225 bps.

Guidance was in the Treasuries plus 230 bps area.

And a $150 million add-on to the company’s existing 4.5% notes due March 15, 2024 sold at Treasuries plus 300 bps.

Pricing was on top of guidance.

The original $350 million issue sold at Treasuries plus 187.5 bps on Feb. 27, 2014.

Barclays, Citigroup, JPMorgan, BofA Merrill Lynch and UBS are the bookrunners.

Proceeds will be used for general corporate purposes, including the repayment of $300 million of 3.1% senior notes due March 15, 2016.

The network designer and developer is based in Sunnyvale, Calif.

BNZ does deal

And BNZ International Funding Ltd. sold $500 million of 2.75% five-year notes (Aa3/AA-) on Tuesday with a spread of Treasuries plus 155 bps, a market source said.

The notes sold at the tightest side of the Treasuries plus 160 bps area guidance.

Bookrunners were JPMorgan, Morgan Stanley, National Australia Bank and Wells Fargo.

The notes are guaranteed by Auckland, New Zealand-based Bank of New Zealand.

Hubbell upsizes

Hubbell plans to use proceeds from an upsized $400 million new issue of 3.35% 10-year senior notes (A3/A/A) to repay commercial paper borrowings.

The notes sold on Tuesday at Treasuries plus 170 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.244 to yield 3.44%.

Guidance was in the 175 bps area over Treasuries after having firmed from the 187.5 bps area over Treasuries.

The issue was upsized from $300 million.

JPMorgan, HSBC Securities and BofA Merrill Lynch are the bookrunners.

The company intends to use the remainder of proceeds for general corporate purposes.

The electrical and electronic products company is based in Shelton, Conn.

Hewlett-Packard firms

Hewlett-Packard Enterprise’s 4.9% notes due 2025 tightened about 9 bps to 386 bps bid in late afternoon secondary trading, a 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 traded about 23 bps better from Monday’s session at 505 bps bid.

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

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

AT&T tightens

AT&T’s 4.125% notes due 2026 were seen 3 bps to 5 bps better on Tuesday at 209 bps bid, a market source said.

The company sold $1.75 billion of the notes (Baa1/BBB+/A-) on Jan. 29 at 220 bps plus Treasuries.

AT&T is a Dallas-based telecommunications company.

Visa mixed

Visa’s 3.15% notes due 2025 firmed 2 bps on Tuesday to 108 bps bid in the secondary market, a source said.

The company sold $4 billion of the notes on Dec. 9 at a spread of 97 bps over Treasuries.

Visa’s tranche of 4.3% bonds due 2045 were unchanged at 140 bps bid in the secondary market.

Visa sold $3.5 billion of the bonds in the December offering at Treasuries plus 132 bps.

The retail electronic payments network operator is based in San Francisco.

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