Boeing, Phillips 66 in demand; Waste Management, PNC price; Boeing tightens; Philips 66 active

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 18 – Boeing Co., Phillips 66 Partners LP, Waste Management, Inc. and PNC Bank NA issued bonds on Wednesday.

Investor demand was solid across the board for the day’s newly printed deals.

Boeing attracted a book that topped $5.5 billion of orders for its $750 million three-part offering.

The tranches sold around 20 basis points tight of initial price thoughts.

The orderbook for Phillip 66’s new $1.1 billion offering of senior notes was around 12 times oversubscribed.

Also on Wednesday, Waste Management sold $1.8 billion of notes in three parts, all tight of price guidance, while PNC Bank issued $1.75 billion of senior bank notes.

So far, the investment-grade bond market has seen $10.25 billion of new issuance this week, roughly halfway to what was predicted to be around $20 billion of supply for the holiday-shortened week.

Tone improved in the high-grade bond market on Wednesday following the release of minutes from the Federal Reserve’s January policy meeting.

The Markit CDX North American Investment Grade index firmed 1 bp to a spread of 64 bps.

Boeing’s bonds tightened 1 bp to 2 bps in aftermarket trading.

New bonds priced by Phillips 66 were active in the gray market.

Waste Management three-parter

Waste Management sold $1.8 billion of senior notes (Baa2/A-/BBB) in tranches due 2025, 2035 and 2045 on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $600 million of 3.125% notes due 2025 priced at 99.574 to yield 3.175%, or 110 bps over Treasuries.

A second tranche was $450 million of 3.9% 20-year bonds priced at 99.834 to yield 3.912%, or 120 bps over Treasuries.

Finally, $750 million of 4.1% bonds due 2045 priced at 99.794 to yield 4.112%, or Treasuries plus 140 bps.

The bookrunners were Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays, BofA Merrill Lynch, RBS Securities Inc. and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by Waste Management Holdings Inc.

The waste collection, recycling and disposal company is based in Houston.

PNC bank notes

PNC Bank priced $1.75 billion of senior bank notes (A2/A/A+) in tranches due 2018 and 2025, according to an informed source.

The bank sold a $1 billion tranche of 1.5% notes due 2018 with a spread of 52 bps over Treasuries.

Pricing was at the tight end of talk.

There was also a $750 million tranche of 2.95% notes due 2025 priced at 93 bps over Treasuries.

The notes priced at the tight end of price talk.

The bookrunners were Citigroup Global Markets Inc., Goldman Sachs, JPMorgan, Morgan Stanley & Co. Inc. and PNC Capital Markets LLC.

Proceeds will be used for general corporate purposes.

PNC is a Pittsburgh-based bank and holding company.

Phillips 66 prices tight

Phillips 66 Partners priced $1.1 billion of senior notes (/BBB/) in three parts, according to an informed source.

The company priced $300 million of 2.646% notes due 2020 at par, or 112 bps over Treasuries.

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

A second tranche was $500 million of 3.605% notes due 2024 with a spread of Treasuries plus 152 bps.

Pricing was at 99.967 to yield 3.609%.

The notes priced at the tight end of talk set in the Treasuries plus 155 bps area.

There was also $300 million of 4.68% notes due 2045 priced at 99.953 to yield 4.683% with a spread of 197 bps over Treasuries.

Pricing was at the tight end of talk, which was set in the area of 200 bps over Treasuries.

RBS Securities, Barclays, Goldman Sachs and RBC Capital Markets LLC were the bookrunners.

The company intends to use net proceeds from this offering to fund a pipeline acquisition transaction and for general partnership purposes, including to repay sponsor loans and other outstanding debt and to fund capital expenditures.

Phillip’s 66 Partners’ 2.464% notes due 2020 were quoted in the gray markets at 110 bps bid.

The tranche of 3.605% notes due 2025 were seen at 148 bps bid, a trader said.

The Houston-based master limited partnership owns, operates, develops and acquires crude oil and refined petroleum product.

Boeing new issue

Boeing sold $750 million of senior notes (A2/A/A) in three tranches on Wednesday, according to a market source.

There was a $250 million tranche of 2.5% notes due 2025 priced at 65 bps over Treasuries.

The notes priced at 97.589 to yield 2.777%.

Pricing was at the tight end of talk set in the 70 bps area, having firmed from initial guidance set in the 85 bps area.

A $250 million tranche of 3.3% notes due 2035 priced at 97.052 to yield 3.506%, or 80 bps over Treasuries.

The notes sold at the tight end of the 85 bps area talked. Talk had firmed from guidance in the area of 100 bps over Treasuries.

There was also $250 million of 3.5% bonds due 2045 sold at 96.286 to yield 3.706%, or 100 bps over Treasuries.

Pricing was at the tight end of talk set in the area of 105 bps over Treasuries. The notes were talked in the area of Treasuries plus 120 bps.

Proceeds will be used for general corporate purposes.

The bookrunners for the 10-year notes are JPMorgan, Citigroup Global Markets, Deutsche Bank Securities, BNP Paribas Securities Corp., Mizuho Securities and RBS Securities.

The bookrunners for the 20-year bonds are JPMorgan, Credit Suisse Securities, Goldman Sachs, RBC Capital Markets, SMBC Nikko and U.S. Bancorp Investments Inc.

The bookrunners for the 30-year bonds are JPMorgan, BofA Merrill Lynch, Morgan Stanley, Barclays, MUFG and Wells Fargo Securities.

Boeing’s 2.5% notes due 2025 firmed to 63 bps bid in the secondary market, a trader said.

The tranche of 3.3% notes due 2035 were quoted late afternoon at 79 bps bid.

The company’s 3.5% bonds due 2045 headed out tighter at 98 bps bid, 96 bps offered.

Boeing is a Chicago-based aerospace company.

Bank/brokerage CDS costs mostly flat

Investment-grade bank and brokerage CDS prices were mostly flat on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs were flat at 64 bps bid, 67 bps offered. Citigroup Inc.’s CDS costs were 1 bp lower at 76 bps bid, 79 bps offered. JPMorgan Chase & Co.’s CDS costs were flat at 63 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 44 bps bid, 47 bps offered.

Merrill Lynch’s CDS costs remained at 67 bps bid, 70 bps offered. Morgan Stanley’s CDS costs were unchanged at 73 bps bid, 78 bps offered. Goldman Sachs Group’s CDS costs also flat at 83 bps bid, 86 bps offered.

Paul Deckelman contributed to this review.

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