Primary sees $12 billion of issuance from Target, BMW, others; Pfizer, AT&T tighten modestly

By Aleesia Forni and Cristal Cody

New York, April 4 – A banner day for the high-grade bond market hosted more than $12 billion of new paper to open the week.

The primary saw new deals from Target Corp., Thermo Fisher Scientific Inc., Enterprise Products Operating LLC and Societe Generale.

Orders piled into BMW US Capital LLC’s $4 billion new deal, the largest of the session. The deal saw a final book of more than $14 billion.

And Essex Portfolio, LP sold an upsized $450 million 10-year issue.

The slew of deals comes on the heels of what had been a largely subdued primary during the month of March.

Sources expect around $30 billion of new issuance to enter the market this week.

Investment-grade corporate bonds traded mostly flat to modestly better on Monday.

Pfizer Inc.’s 3.4% senior notes due 2024 tightened 1 basis point during the session. The Treasury Department announced late Monday temporary and proposed corporate tax inversion regulations that could impact the company’s acquisition of Dublin-based Allergan plc.

AstraZeneca plc’s 3.375% senior notes due 2025 were flat on the day.

In other secondary trading, AT&T Inc.’s 4.125% notes due 2026 firmed 1 bp.

The Markit CDX North American Investment Grade index ended the day 1 bp softer at a spread of 76 bps.

BMW sees demand

BMW US Capital sold $4 billion of senior notes (A2/A+) in three parts on Monday, a market source said.

The sale included $1.5 billion of 1.5% three-year notes sold at Treasuries plus 65 bps.

Price guidance was in the Treasuries plus 70 bps area, tightened from talk in the Treasuries plus 90 bps to 95 bps range.

A $1.5 billion 2% five-year piece sold at 85 bps over Treasuries, at the tight side of the 90 bps area over Treasuries guidance and inside initial price thoughts in the Treasuries plus 105 bps to 110 bps range.

Finally, $1 billion of 2.8% 10-year bonds sold at Treasuries plus 105 bps.

Guidance was in the Treasuries plus 110 bps area, and initial talk was in the Treasuries plus 135 bps area.

The notes are guaranteed by BMW AG.

Bookrunners were Barclays, Citigroup Global Markets Inc., Credit Suisse Securities and J.P. Morgan Securities LLC.

The automaker is based in Munich.

Target two-parter

Target priced $2 billion of senior notes (A2/A/A-) in two parts on Monday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $1 billion of 2.5% 10-year bonds sold at 99.991 to yield 2.501%, or Treasuries plus 72 bps.

A second piece was $1 billion of 3.625% 30-year bonds priced with a 105 bps spread over Treasuries. Pricing was at 99.42 to yield 3.657%.

Both tranches came at the tight side of guidance.

Barclays, Citigroup, JPMorgan, BofA Merrill Lynch, Deutsche Bank Securities Inc. and Goldman Sachs & Co. and were the joint bookrunners.

Proceeds will be used for a tender offer and for general corporate purposes.

The discount merchandise chain is based in Minneapolis.

Exelon prices

Exelon Corp. was also in the market with a $1.8 billion three-tranche offering of senior notes (Baa2/BBB-/BBB) on Monday, according to a market source.

A $300 million 2.45% five-year note sold at Treasuries plus 125 bps.

Also, $750 million of 3.4% 10-year bonds priced with a spread of 165 bps over Treasuries.

The company also sold $750 million of 4.45% 30-year bonds at Treasuries plus 190 bps.

All three tranches came at the tight side of price guidance.

Barclays, Goldman Sachs, JPMorgan, Scotia Capital(USA) Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC and TD Securities were the bookrunners.

Proceeds will be used to repay commercial paper issued by PH LLC and for general corporate purposes, which may include the repayment of outstanding debt.

Exelon is the parent of Exelon Generation and is a utility services holding company based in Chicago.

Enterprise new, reopened notes

Enterprise Products Operating sold a $1.25 billion offering of senior notes (Baa1/BBB+) on Monday in new and reopened tranches, according to a market source and an FWP filed with the SEC.

There was $575 million of 2.85% five-year senior notes sold at Treasuries plus 165 bps. Pricing was at 99.898 to yield 2.872%.

And $575 million of 3.95% 11-year notes priced at 99.76 to yield 3.978%, or Treasuries plus 220 bps.

A $100 million add-on to the company’s 4.9% notes due 2046 sold at 95.516 to yield 5.196%, or a spread of Treasuries plus 260 bps.

The notes will be guaranteed by Enterprise Products Partners LP.

JPMorgan, BofA Merrill Lynch, Citigroup, Deutsche Bank, DNB Markets and Scotia Capital are the bookrunners.

Proceeds will be used to repay debt, including commercial paper, and for general company purposes.

The midstream energy services provider is based in Houston.

Societe Generale prices tight

Societe Generale priced $1.25 billion of five-year senior notes (A2/A) on Monday in two tranches, according to a market source.

The sale included $750 million of 2.5% five-year notes sold at Treasuries plus 130 bps. The notes were issued at a price of 99.925 to yield 2.516%.

Also, $500 million of five-year floaters sold at par to yield Libor plus 133 bps.

Both tranches sold at the tight end of revised price talk.

Proceeds will be use for general corporate purposes.

Societe Generale was the bookrunner.

The financial services company is based in Paris.

Thermo Fisher seven-years

Thermo Fisher was in the market with a $1 billion offering of 3% seven-year senior notes (Baa3/BBB/BBB), which priced at Treasuries plus 155 bps, according to a market source and an FWP filed with the SEC.

The notes sold at 99.512 to yield 3.078%.

Pricing came at the tight side of guidance and tighter than initial price thoughts in the 180 bps to 185 bps range over Treasuries.

BofA Merrill Lynch, Goldman Sachs and Morgan Stanley & Co. LLC are the bookrunners.

Proceeds will be used to redeem $1 billion of 2.25% senior notes due Aug. 15, 2016.

Thermo Fisher is a Waltham, Mass.-based science technology company.

Air Lease new issue

Air Lease Corp. sold $600 million of 3.375% senior notes (BBB-) due June 1, 2021 on Monday at Treasuries plus 235 bps, according to an FWP filed with the SEC.

The notes sold at 99.059 to yield 3.576%.

BofA Merrill Lynch, JPMorgan, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Citigroup, Deutsche Bank, Fifth Third Securities Inc., Lloyds Securities, Mizuho Securities USA Inc., Morgan Stanley, MUFG, Natixis, Santander and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used for general corporate purposes, which may include the purchase of commercial aircraft and the repayment of debt.

Air Lease is a Los Angeles-based aircraft leasing company.

Essex upsizes

Essex Portfolio sold an upsized $450 million of 3.375% 10-year senior notes (Baa2/BBB/BBB+) on Monday at Treasuries plus 167 bps, according to an FWP filed with the SEC.

The offering was upsized from $300 million.

Pricing was at 99.386 to yield 3.448%.

The notes sold at the tight side of talk set in the 170 bps area over Treasuries.

The bookrunners are Wells Fargo, Citigroup, JPMorgan, MUFG, U.S. Bancorp Investments Inc. and Jefferies.

The notes will be guaranteed by Essex Property Trust, Inc.

Proceeds will be used to repay debt under the company’s $1 billion unsecured line-of-credit facility and $25 million unsecured working capital line-of-credit facility and for other general corporate and working capital purposes.

Based in Palo Alto, Calif., Essex Portfolio is a real estate investment trust.

Pfizer improves

Pfizer’s 3.4% notes due 2024 firmed 1 bp to 61 bps bid on Monday, a market source said.

Pfizer sold $1 billion of the notes (A1/AA/) on May 13, 2014 at a spread of Treasuries plus 80 bps.

The biopharmaceutical company is based in New York City.

AstraZeneca unchanged

AstraZeneca’s 3.375% notes due 2025 were unchanged on Monday at 115 bps bid, a market source said.

The company sold $2 billion of the notes (A2/A) on Nov. 10 at Treasuries plus 115 bps.

The biopharmaceutical company is based in London.

AT&T improves

AT&T’s 4.125% notes due 2026 firmed 1 bp to 166 bps bid over the day, a market source said.

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

AT&T is a Dallas-based telecommunications company.

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