Ford prices add-on; funds see $650.1 million outflow; power bonds flat to slightly tighter

By Aleesia Forni and Cristal Cody

Virginia Beach, June 13 – Ford Motor Credit Co. LLC priced a $200 million tap of its existing 2.375% notes due 2019 on Friday, capping off a week that saw more than $26 billion of paper price.

This figure was down slightly from last week’s more than $30 billion of supply.

Issuance was front-loaded again this week, with around $20 billion of this week’s total pricing on Monday and Tuesday.

Friday’s preferred market saw Ladenburg Thalmann Financial Services Inc. announce plans to sell up to $75 million additional 8% series A cumulative redeemable preferreds.

The issue ended the day off a penny at $22.07.

In other news this week, Lipper reported outflows of $650.1 million from corporate investment-grade funds for the week ended June 11, down from the prior week’s inflows of $261.4 million.

The year-to-date inflows now sit around $38 billion.

The pace of issuance is expected to slow slightly in the week ahead, with around $15 billion to $20 billion of supply predicted.

Bonds traded mostly flat to tighter in light trading over the session, according to market sources.

“It’s been a quiet day,” one source said.

New electric and gas utility bonds that priced at the start of the week ended the week about 1 basis point weaker to 2 bps tighter, according to market sources.

Arizona Public Service Co.’s 3.35% senior notes due 2024 headed out 2 bps better, a trader said.

Oglethorpe Power Corp.’s 4.55% first mortgage bonds due 2044 ended the week 1 bp tighter, according to a trader.

Sempra Energy’s 3.55% senior notes due 2024 traded 1 bp wider from issuance, a trader said.

Electric utility bonds have “performed in line” through the first half of the year but have the potential to be underperformers as the cost of solar panels declines and more people defect from the electric grid, Barclays analysts said in a note on Friday.

Ford adds on

Ford Motor Credit priced a $200 million tap of its existing 2.375% notes due March 12, 2019 at Treasuries plus 64 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes sold at 100.154 to yield 2.34%.

The original $1.1 billion issue sold with a spread of Treasuries plus 93 bps, or 99.621 to yield 2.456%, on March 5.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were the joint bookrunners.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Ladenburg eyes preferreds

Ladenburg Thalmann is looking to price up to $75 million of 8% series A cumulative redeemable preferreds in an at-the-market offering, the company said in a prospectus filed with the SEC on Friday.

Mitsubishi UFJ Securities (USA) Inc. and Barrington Research Associates, Inc. are running the books.

The preferreds are not redeemable until May 24, 2018, except in the case of a change of control.

The preferreds are listed on the New York Stock Exchange under the ticker symbol “LTSPA.”

Proceeds will be used to prepay notes from various lenders, including Phillip Frost affiliate Vector Group Ltd. and an affiliate of Richard J. Lampen. Frost is the chairman of the board of directors and the company’s principal shareholder, and Lampen is president and chief executive officer. The notes were taken on to finance the company’s acquisition of Securities America.

Any remaining funds will be used for general corporate purposes.

Ladenburg Thalmann is a Miami-based financial services company.

Arizona Public Service firms

Arizona Public Service’s 3.35% senior notes due 2024 (A3/A-/A-) tightened to 73 bps bid, 71 bps offered in secondary trading, a trader said on Friday.

The notes were quoted ending the day at 100.33, down from 100.60 on Thursday, according to a market source.

Arizona Public Service sold $250 million of the notes on Monday at 99.908 to yield 3.361%, or a spread of Treasuries plus 75 bps.

The Phoenix-based electric utility is a subsidiary of Pinnacle West Capital Corp.

Oglethorpe Power improves

Oglethorpe Power’s 4.55% bonds due 2044 (Baa1/A/A) traded slightly better than issuance at 114 bps bid, 111 bps offered on Friday, a trader said.

The notes were quoted closing the session lower at 100.07 from 100.54 on Thursday, according to a market source.

Oglethorpe Power priced $250 million of the series 2014A bonds on Monday at 99.37 to yield 4.589%, or a spread of Treasuries plus 115 bps.

The electric supply cooperative is based in Tucker, Ga.

Sempra softer

Sempra Energy’s 3.55% senior notes due 2024 (Baa1/BBB+/BBB+) traded late Friday afternoon at 96 bps bid, 94 bps offered, a trader said.

The bonds headed out at 100.15, down from 100.31 on Thursday, according to a market source.

The company sold $500 million of the 10-year notes on Tuesday at Treasuries plus 95 bps. The notes priced at 99.708 to yield 3.585%.

Sempra Energy is a San Diego-based holding company for electric and gas and utility subsidiaries.

Bank CDS costs flat to higher

Investment-grade bank and brokerage CDS prices unchanged to higher, according to a market source.

Bank of America Corp.’s CDS costs were flat at 60 bps bid, 64 bps offered. Citigroup Inc.’s CDS costs increased 2 bps to 60 bps bid, 64 bps offered. JPMorgan Chase & Co.’s CDS costs were unchanged at 49 bps bid, 53 bps offered. Wells Fargo & Co.’s CDS costs ended flat at 36 bps bid, 40 bps offered.

Merrill Lynch’s CDS costs increased 1 bp to 63 bps bid, 65 bps offered. Morgan Stanley’s CDS costs ended 1 bp higher at 59 bps bid, 63 bps offered. Goldman Sachs Group, Inc.’s CDS costs widened 1 bp to 66 bps bid, 69 bps offered.

Stephanie Rotondo contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.