Martin Marietta, DTE, Healthcare Trust of America price; Legg Mason, Ameren Illinois firm

By Aleesia Forni and Cristal Cody

Virginia Beach, June 23 – The high-grade primary market saw new deals from Healthcare Trust of America Holdings, LP, DTE Electric Co. and Martin Marietta Materials Inc.

People’s United Bank, Ameren Illinois Co. and Legg Mason Inc. were also in the market issuing notes on Monday.

The six issuers that came to the day’s quieter primary sold $3 billion of paper.

“Pretty quiet today,” a market source said following the session’s close. “Tomorrow’s looking similar.”

Demand was solid for the deals that did price on Monday.

The orderbook for Martin Marietta’s new deal was nearly four times oversubscribed, and both tranches of the deal sold 20 basis points tighter than original guidance.

Similarly, the five- and 10-year tranches of Legg Mason’s new deal sold around 20 bps tighter compared to initial price talk.

Activity this week is expected to remain measured compared to recent weeks, with around $15 billion to $20 billion of new issuance predicted.

Spreads narrowed over Monday’s session, sources said.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 56 bps.

Legg Mason’s three-part offering of notes tightened 2 bps to 5 bps in the secondary market, a trader said.

Ameren Illinois’ 4.3% notes due 2044 traded 2 bps better.

No aftermarkets were seen in DTE Electric’s 3.375% notes due 2024, while the company’s tranche of 4.3% bonds due 2044 traded wrapped around issuance, according to a trader.

Martin Marietta Materials’ two tranches of notes priced late afternoon and were not seen in the secondary market, a trader said.

Healthcare Trust of America’s 3.375% notes due 2021 were mostly unchanged from issuance, according to a trader.

DTE three-parter

DTE Electric was in Monday’s primary market with $700 million of general and refunding mortgage bonds (Aa3/A/A) priced in two tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included a $350 million tranche of 3.375% bonds due 2025 priced at 99.861 to yield 3.391%, or Treasuries plus 77 bps, and a $350 million tranche of 4.3% 30-year bonds priced at 99.849 to yield 4.309%, or Treasuries plus 87 bps.

Both tranches sold at the tight end of talk.

DTE Electric’s 3.375% bonds due 2025 were not seen in aftermarket trading, according to a trader.

The 4.3% bonds due 2044 were quoted in the secondary market at 87 bps bid, 85 bps offered.

Barclays, BNP Paribas Securities Corp., BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Scotia Capital (USA) Inc. were the joint bookrunners.

Proceeds will be used to repay the company’s $200 million of 5.4% notes due Aug. 1, 2014 and $60 million of 5.25% notes due Aug. 1, 2029 and for the repayment of short-term borrowings.

The company was last in the high-grade bond market with an upsized $350 million of 3.5% series C senior notes due 2024 with a spread of Treasuries plus 92 bps on May 6.

The electric utility is based in Detroit.

Martin Marietta prices tight

In other primary happenings, Martin Marietta Materials sold $700 million of senior notes (Ba1/BBB/BBB-) in two parts on Monday, according to a market source.

Martin Marietta priced $300 million of three-year floating-rate notes at par to yield Libor plus 110 bps.

A second tranche was $400 million of 4.25% 10-year notes priced at 99.428 to yield 4.321%, or Treasuries plus 170 bps.

Both tranches sold tight of guidance.

The notes were sold via Rule 144A and Regulation S.

Proceeds will be used to redeem all of Texas Industries, Inc.’s 9.25% senior notes due 2024 upon consummation of the merger between Texas Industries, Martin Marietta Materials and Project Holdings, Inc.

If the merger does not close, Martin Marietta will be required to redeem all of the outstanding notes at 101% of their principal amount.

The producer of construction aggregates is based in Raleigh, N.C.

Legg Mason new deal

Legg Mason came to Monday’s primary market with a three-part offering of notes, a market source said.

The offering included $250 million of 2.7% five-year notes sold at 99.779 to yield 2.747%, or Treasuries plus 105 bps, and $250 million of 3.95% 10-year notes priced at 99.817 to yield 3.972%, or Treasuries plus 135 bps.

There was also a $150 million tap of the company’s 5.625% notes due 2044 priced at 106.519 to yield 5.191%, or Treasuries plus 175 bps.

The original $400 million issue sold on Jan. 16 with a spread of 195 bps over Treasuries.

All three tranches sold tight of guidance.

Legg Mason’s 2.7% notes due 2019 tightened to 100 bps bid, 98 bps offered in the secondary market, a trader said.

The 3.95% notes due 2024 firmed to 133 bps bid, 129 bps offered.

The 5.625% notes due 2044 traded better at 173 bps offered.

The bookrunners were Citigroup Global Markets and J.P. Morgan Securities LLC.

Proceeds will be used to repay the company’s 5.5% notes due 2014.

The asset management company is based in Baltimore.

People’s United 10-year notes

People’s United Bank, a wholly-owned subsidiary of People's United Financial, Inc., was in the market Monday with a $400 million sale of 4% 10-year subordinated notes, according to a company press release.

Full details of the sale were unavailable at press time.

Jefferies & Co. was the bookrunner.

The bank and financial services company is based in Bridgeport, Conn.

Healthcare Trust prices tight

In other market action on Monday, Healthcare Trust of America sold $300 million of 3.375% seven-year senior notes at 130 bps over Treasuries, according to an FWP filed with the SEC.

The notes (Baa2/BBB/) priced at 99.205 to yield 3.503%.

Pricing was tight of guidance.

Healthcare Trust of America’s 3.375% notes due 2021 headed out at 129 bps offered in the secondary market, a trader said.

Wells Fargo Securities LLC, JPMorgan, U.S. Bancorp Investments Inc. and Jefferies were the bookrunners.

Proceeds are being used for general corporate purposes.

The notes will be guaranteed by Healthcare Trust of America, Inc.

The real estate investment trust for medical office buildings is based in Scottsdale, Ariz.

Ameren sells secured notes

Ameren Illinois sold $250 million of 4.3% 30-year senior secured notes (A2/A/A-) on Monday at the tight end of talk with a spread of Treasuries plus 92 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.432 to yield 4.334%.

In secondary trading, Ameren Illinois’ 4.3% notes due 2044 firmed to 90 bps bid, 88 bps offered, according to a trader.

Proceeds will be used to finance ongoing construction and maintenance programs, to redeem, repurchase, repay or retire outstanding debt and preferred stock and for other general corporate purposes.

Barclays, BNY Mellon Capital Markets, RBS Securities Inc. and RBC Capital Markets LLC were the joint bookrunners.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices mostly rose, according to a market source.

Bank of America Corp.’s CDS costs eased 1 bp to 60 bps bid, 63 bps offered. Citigroup Inc.’s CDS costs were unchanged at 59 bps bid, 62 bps offered. JPMorgan Chase & Co.’s CDS costs eased 2 bps to 49 bps bid, 52 bps offered. Wells Fargo & Co.’s CDS costs ended flat at 37 bps bid, 40 bps offered.

Merrill Lynch’s CDS costs eased 1 bp to 63 bps bid, 66 bps offered. Morgan Stanley’s CDS costs widened 2 bps to 61 bps bid, 64 bps offered. Goldman Sachs Group, Inc.’s CDS costs rose 1 bp to 65 bps bid, 68 bps offered.

Paul Deckelman contributed to this review.

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