Time Warner, Plains All American, Credit Suisse among day's issuers; trading volume on the rise

By Andrea Heisinger and Cristal Cody

New York, July 7 - Time Warner Inc., Plains All American Pipeline LP, PAA Finance Corp., Credit Suisse AG New York Branch and KfW priced bonds under good market conditions on Wednesday.

Time Warner had the largest corporate sale of the day at $3 billion in three tranches. The bonds priced late, with two of the tranches coming in tight to guidance.

Plains All American and PAA Finance got their deal done by mid-afternoon. The oil and natural gas transport and storage company upsized the five-year notes offering to $400 million from $300 million.

Credit Suisse AG's NY branch reopened an issue of notes due 2015 to add $500 million late in the day. It brings the total issuance of the notes to $2 billion.

German development bank KfW priced its $5 billion deal of three-year global notes early in the day.

One market source also said that the Royal Bank of Canada was pricing bonds, but it could not be confirmed if the bonds had priced at press time. The bank was planning $1 billion of global notes due 2015.

Market conditions were "great," a source said at the end of the day. "I think we didn't have much for supply, but otherwise we would have seen more [deals]."

The new corporate debt from Time Warner and Plains All American Pipeline firmed in secondary trading, while overall trading volume rose, sources said.

Overall investment-grade Trace volume climbed 30% to nearly $11 billion from about $8 billion on Tuesday, according to a market source.

The CDX Series 14 North American investment-grade index firmed on Wednesday to a mid bid-asked spread of 116 bps after staying unchanged since Friday at 122 bps, according to a source.

"Corp flows seemed a little better today," a trader said. "Volume was pretty good."

Also in secondary trading, Anadarko Petroleum Corp.'s bonds firmed more than 30 basis points, according to a source.

In Treasuries, long-term bond yields rose on weaker demand as stocks recovered.

The Dow Jones Industrial Average closed above 10,000 - rising 274.66 points, or 2.2%, to 10,018.28.

Yields on the benchmark 10-year Treasury notes rose 5 bps to 2.98%.

Thirty-year Treasury bond yields rose 7 bps to 3.96%.

Time Warner sells $3 billion

Media and entertainment company Time Warner priced a benchmark $3 billion of senior notes and debentures (Baa2/BBB/BBB) in three tranches late in the day, a source close to the sale said.

The deal was announced at a minimum size of $1.5 billion, with $500 million in each tranche, and it doubled in size from that.

The $1 billion of 3.15% five-year senior notes priced at a spread of Treasuries plus 140 bps. This was in line with guidance in the 140 bps area.

A $1 billion tranche of 4.7% 10-year senior notes priced at bps over Treasuries. They priced at the tight end of guidance in the 180 bps area.

The third tranche was $1 billion of 6.1% 30-year debentures priced at a spread of Treasuries plus 215 bps. They also priced at the tight end of talk in the 220 bps area.

All tranches were stronger on the bid side in the secondary, a trader said.

Time Warner's notes due 2015 tightened 10 bps on the bid side to 130 bps in late afternoon trading, compared to where the notes priced at Treasuries plus 140 bps, the trader said.

The second tranche of notes due 2021 priced at Treasuries plus 175 bps. The 11-year notes were last quoted at 170 bps bid.

Time Warner's last tranche of bonds due 2040 firmed 5 bps to 210 bps bid in secondary trading after they priced at Treasuries plus 215 bps, the trader said.

The deal is guaranteed by Historic TW Inc., which is guaranteed by Home Box Office Inc. and Turner Broadcasting System Inc.

Bookrunners were Barclays Capital Inc., Citigroup Global Markets, J.P. Morgan Securities Inc. and Wells Fargo Securities.

Proceeds are being used to retire existing debt and for general corporate purposes.

The issuer is based in New York City.

Plains All American prices $400 million

Plains All American Pipeline LP and PAA Finance Corp. priced an upsized $400 million of 3.95% five-year senior unsecured notes (Baa3/BBB-) by mid-afternoon to yield Treasuries plus 220 bps, a source away from the deal said.

The size was increased from a planned $300 million, the source said.

The notes tightened in secondary trading, a source said, adding that the notes traded late in the day at 213 bps bid, 211 bps offered.

The notes are guaranteed by certain subsidiaries.

Bookrunners were J.P. Morgan Securities, Bank of America Merrill Lynch and BNP Paribas Securities.

Proceeds are being used to repay borrowings under credit facilities and for general partnership purposes.

The issuer is based in Houston.

Bond deal upsizing continues on demand

A decent market tone held for the second day in a row, and issuers continued to take advantage of the lessened volatility.

Those braving the market are being rewarded by demand for their bonds, especially if it's a high-profile name, such as Time Warner or Kroger Co. from Tuesday, a source said.

"They're just looking for high quality," he said. "If it's a name they recognize, it's even better."

The $300 million Kroger sale from the previous day was seven times oversubscribed. Time Warner was also likely oversubscribed on the books, although details weren't available at press time.

The size of the deal was increased substantially throughout the day, signaling interest in the three tranches, a market source said. It was officially announced at a benchmark size of $500 million, then raised to "at least $1.5 billion," and finally launched at $3 billion.

Accounts also like that they're not as risky as junk bonds and have a good price, he said.

Credit Suisse reopens five-years

Credit Suisse AG, New York Branch reopened its issue of 3.5% senior unsecured notes due 2015 late in the day to add $500 million, a source close to the deal said.

The notes (Aa1/A+/AA-) priced at a spread of Treasuries plus 145 bps.

Total issuance is $2 billion, including $1.5 billion priced on March 18 at Treasuries plus 112.5 bps.

Credit Suisse Securities was the bookrunner.

The financial services company has its U.S. headquarters in New York City, but is based in Zurich, Switzerland.

KfW prices three-years

KfW priced $5 billion of 1.375% three-year global notes (Aaa/AAA/AAA) to yield mid-swaps plus 18 bps, according to an FWP filing with the Securities and Exchange Commission and a market source.

Bookrunners were Barclays Capital Inc., Morgan Stanley & Co. Inc. and RBS Securities Inc.

The German government-owned development bank is based in Frankfurt.

Anadarko tighter

Anadarko Petroleum's bonds tightened more than 30 bps in secondary trading, according to a source.

The company's 5.95% notes due 2016 firmed to 567 bps from 599 bps the previous day. On June 30, the notes were quoted at 660 bps over Treasuries.

In June, Moody's Investors Service, Standard & Poor's and Fitch Ratings cut their outlooks on the company to negative over its liabilities for damages and cleanup costs from the oil well that is gushing oil into the Gulf of Mexico.

Woodlands, Texas-based Anadarko Petroleum owns 25% of the oil well where the drilling rig that BP plc operated exploded on April 20.

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