PepsiCo, Texas Instruments, Reliance, FS Investment price; AT&T bonds firm in secondary

By Aleesia Forni

Virginia Beach, April 27 – New deals from PepsiCo Inc., Texas Instruments Inc., Reliance Standard Global Funding II and FS Investment Corp. got the new week off to a solid start on Monday, with $3,675,000,000 of new issuance pricing during the session.

PepsiCo was in the market with $2.5 billion of senior notes in four tranches.

The deal garnered around $7 billion of orders, with the three-year notes attracting the largest bid-to-cover rate.

All tranches sold tight of initial price thoughts.

Texas Instruments priced its new $500 million offering of five-year notes at the tight end of price guidance.

Both FS Investment and Reliance were in the market with upsized new issues on Monday, each pricing at the tight end of price talk.

Around $25 billion of new issuance is expected to hit the investment-grade primary market this week.

In other market action on Monday, investment-grade bond spreads firmed to open the week.

The Markit CDX North American Investment Grade series 23 index was 1 basis point tighter at a spread of 60 bps.

Tranches of PepsiCo’s new offering traded 2 bps to 4 bps tighter in the aftermarket.

Meanwhile, Texas Instruments’ new five-year notes traded around 1 bp better late Monday.

AT&T Inc.’s recently priced $17.5 billion megadeal widened slightly compared to levels seen on Friday.

PepsiCo four-parter

PepsiCo sold on Monday $2.5 billion of senior notes (A1/A-/A) in four tranches due 2018, 2020 and 2025, according to an informed source.

The Purchase, N.Y.-based company sold $500 million of 1.25% three-year fixed-rate notes at 40 bps over Treasuries.

Pricing was at 99.988 to yield 1.254%.

The notes sold on top of guidance and tight of initial talk set in the high-40 bps area over Treasuries.

There was also $250 million of three-year floaters sold at par to yield Libor plus 17 bps.

Guidance was set at the Libor equivalent to the three-year fixed-rate notes.

A $750 million tranche of 1.85% five-year notes priced at 99.943 to yield 1.862%, or 52 bps over Treasuries.

The notes sold at the tight end of guidance set in the 55 bps area over Treasuries. Initial price thoughts were in the low-60 bps area over Treasuries.

The notes traded 4 bps tighter at 48 bps bid, a market source said.

Finally, $1 billion of 2.75% 10-year notes sold with a spread of Treasuries plus 87 bps.

The notes priced at 99.584 to yield 2.798%.

Pricing was at the tight end of the Treasuries plus 90 bps area, which had firmed from initial talk set in the high-90 bps area over Treasuries.

A market source saw the notes trade at 85 bps offered.

The bookrunners for the offering were BofA Merrill Lynch, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, including the repayment of commercial paper.

PepsiCo is a global food and beverage company.

Texas Instruments five-years

Texas Instruments sold $500 million of 1.75% five-year notes (A1/A+/) on Monday with a spread of Treasuries plus 50 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.649 to yield 1.824%.

The active bookrunners were J.P. Morgan Securities LLC, MUFG and Morgan Stanley. Passive bookrunners were Citigroup Global Markets, BofA Merrill Lynch and Mizuho Securities.

Proceeds will be used to repay the company’s 0.45% notes due Aug. 3, 2015 and for general corporate purposes.

Texas Instruments is a Dallas-based semiconductor designer and manufacturer.

Reliance Standard upsizes

Reliance Standard Global Funding sold an upsized $400 million issue of 2.375% five-year secured funding agreement-backed notes (A2/A+/) on Monday at Treasuries plus 110 bps, market sources said.

The notes sold at the tight end of price guidance set in the 115 bps area over Treasuries.

Pricing was at 99.696 to yield 2.44%.

The bookrunners were HSBC Securities, JPMorgan and Wells Fargo Securities LLC.

The insurance carrier is based in New York.

FS Investment offering

FS Investment sold an upsized $275 million issue of 4.75% seven-year senior notes (/BBB/BBB-) on Monday at Treasuries plus 312.5 bps, according to a filing with the SEC.

The offering was upsized from $250 million, and the notes sold on top of price guidance.

Pricing was at 99.684 to yield 4.803%.

JPMorgan and Wells Fargo Securities were the bookrunners.

Proceeds will be used to repay outstanding debt under the company’s financing facilities.

FS Investment is a business development company based in Philadelphia.

AT&T notes ease

Tranches of AT&T’s recently priced $17.5 billion issue of bonds weakened on Monday compared to Friday’s close, though the notes continued to trade tight compared to new issue spreads.

The company’s $3 billion of 2.45% notes due 2020, which sold with a spread of Treasuries plus 110 bps, traded at 100 bps bid, 96 bps offered, 3 bps wider compared to Friday.

A $2.75 billion tranche of seven-year notes was also quoted 3 bps wider at 125 bps bid, 121 bps offered.

The notes sold with a spread of 130 bps over Treasuries.

The $5 billion of 10-year notes traded around 2 bps wider at 139 bps offered early during the session.

The notes sold at Treasuries plus 150 bps on Thursday.

The company’s $2.5 billion of 20-year notes were pegged at 182 bps offered, 3 bps wider compared to Friday’s close.

Pricing was at a spread of Treasuries plus 190 bps.

Finally, AT&T’s $3.5 billion of 4.75% notes due 2046, which sold at Treasuries plus 215 bps, traded around 5 bps wider at 205 bps offered.

AT&T is a Dallas-based telecommunications company.

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