UBS, PNC, KeyBank issue bonds; tone solid despite slower pace; Time Warner Cable keeps gains

By Aleesia Forni and Cristal Cody

Virginia Beach, May 27 – Financial names dominated the high-grade primary market on Wednesday.

UBS AG, Stamford Branch and PNC Bank NA each priced $3 billion new bond offerings during the session.

UBS attracted roughly $4.9 billion of orders for its four-tranche new issue, while PNC garnered a book of more than $4.2 billion.

KeyBank NA also sold senior bank notes on Wednesday, pricing $1.75 billion in three tranches due 2018 and 2025.

The fixed-rate tranches sold 10 basis points tight of initial guidance.

Xcel Energy Inc., the day’s lone issuer from the energy sector, sold $500 million of notes in two tranches, both at the tight end of price talk.

In the preferred market, MetLife Inc. priced $1.5 billion of 5.25% $1,000-par series C fixed-to-floating-rate preferreds on Wednesday.

The investment-grade primary market has hosted $9 billion of new issuance for the shortened week so far, more than halfway towards the revised $15 billion of new issuance expected.

“Things are slower, but the market is still strong,” one market source said of the calmer pace of the primary market following the Memorial Day holiday weekend.

Time Warner Cable Inc.’s bonds (Baa2/BBB/BBB) held onto gains over Wednesday’s session.

The bonds tightened more than 60 bps on Tuesday following the announcement the company will be acquired by Charter Communications, Inc. for $78.7 billion in cash and stock.

Comcast Corp.’s 4.6% senior notes due 2045 priced in the previous week traded 2 bps softer earlier in the day.

AT&T Inc.’s bonds (/BBB+/A-) were mixed over the day.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 63 bps.

UBS four-parter

UBS, Stamford Branch was in Wednesday’s market with a $3 billion four-tranche offering of senior bank notes (A2/A/A), a market source said.

The sale included $1.25 billion of 1.375% notes due June 1, 2017 priced at 99.906 to yield 1.423%, or Treasuries plus 80 bps.

The bank also priced $750 million of floating-rate notes due June 1, 2017 at par to yield Libor plus 56 bps.

A $250 million floating-rate note due June 1, 2020 sold at par to yield Libor plus 85 bps.

Finally, $750 million of 2.35% notes due March 26, 2020 was sold at 99.628 to yield 2.432% with a spread of Treasuries plus 90 bps.

UBS Securities LLC is the bookrunner.

The financial services company is based in Basel and Zurich, Switzerland.

PNC brings $3 billion

In other primary news on Wednsday, PNC Bank priced $3 billion of senior bank notes (A2/A/A+) in four tranches due 2017, 2020 and 2025, an informed source said.

The bank sold a $1.3 billion 1.6% two-year note with a spread of Treasuries plus 65 bps.

The notes sold at 99.933 to yield 1.623%.

Price guidance was set in the Treasuries plus 65 bps to 67 bps range.

There was also a $550 million two-year floating-rate note priced at par to yield Libor plus 42 bps.

The tranche was talked at the Libor equivalent to the two-year notes.

Also, $750 million of 2.3% five-year notes sold at 99.77 to yield 2.348% with a spread of Treasuries plus 83 bps.

The notes sold at the tight end of guidance set in the range of Treasuries plus 83 bps to 87 bps.

Finally, there was a $400 million 3.25% 10-year note priced at Treasuries plus 115 bps.

The notes sold at 99.778 to yield 3.275%.

Pricing was at the wide end of guidance set in the 110 bps to 115 bps range over Treasuries.

Bookrunners for the offering were Barclays, Citigroup Global Market Inc., Morgan Stanley & Co. LLC and PNC Capital Markets.

Proceeds will be used for general corporate purposes.

PNC is a Pittsburgh-based bank and holding company.

KeyBank offering

KeyBank sold on Wednesday a $1.75 billion three-tranche offering of senior bank notes, a market source said.

The company’s sale (A3/A-/A-) included $750 million of notes due June 1, 2018 priced at Treasuries plus 75 bps.

A $250 million floating-rate note due June 1, 2018 priced at Libor plus 52 bps.

The Cleveland-based financial services company also sold $750 million of 3.3% notes due June 1, 2025 at Treasuries plus 120 bps.

Goldman Sachs & Co., J.P. Morgan Securities LLC, KeyBank and Morgan Stanley were the bookrunners.

Proceeds will be used for general corporate purposes.

Xcel prices tight

Xcel Energy sold a $500 million issue of senior notes (A3/BBB+/BBB+) on Wednesday in two tranches, according to an informed source and an FWP filing with the Securities and Exchange Commission.

The sale included $250 million of 1.2% notes due June 1, 2017 at 99.929 to yield 1.236%, or Treasuries plus 58 bps.

The notes sold at the tight end of guidance.

A $250 million tranche of 3.3% notes due June 1, 2025 priced at 99.587 to yield 3.349%, or Treasuries plus 120 bps.

Pricing was at the tight end of price guidance.

Barclays, BofA Merrill Lynch and JPMorgan are the bookrunners.

Proceeds will be used to repay short-term debt and for other general corporate purposes.

The public utility holding company is based in Minneapolis.

MetLife preferreds

MetLife priced $1.5 billion of 5.25% $1,000-par series C fixed-to-floating-rate noncumulative perpetual preferred stock on Wednesday, a market source reported.

Goldman Sachs, BofA Merrill Lynch, Citigroup Global Markets, JPMorgan and Morgan Stanley are running the books.

Dividends will be fixed and payable semiannually through June 15, 2020. On that date, the dividend will begin to float at Libor plus 357.5 bps and will be payable quarterly.

MetLife can redeem the preferreds in whole within 90 days of a regulatory capital treatment event or in whole or in part on or after June 15, 2020.

The redemption price is par plus accrued dividends.

The securities will not be listed on any exchange.

Proceeds will be used to repurchase the company’s series B preferreds.

MetLife is a New York-based insurance company.

Time Warner Cable remains tight

Time Warner Cable’s 4.125% notes due 2021 were unchanged late Wednesday at 220 bps bid, a market source said.

The notes tightened 60 bps on Tuesday on the merger report.

Time Warner Cable sold $700 million of the 4.125% notes due 2021 in 2010 at a spread of 155 bps over Treasuries.

Earlier in the day, the company’s 4.5% senior debentures due 2042 were quoted 63 bps tighter at 243 bps offered.

The company sold $1.25 billion of the debentures in 2012 at Treasuries plus 183 bps.

The broadband communications company is based in New York City.

Comcast soft

Comcast’s 4.6% notes due 2045 traded 2 bps weaker earlier in the session at 147 bps offered, a market source said.

Comcast sold $1.7 billion of the bonds (A3/A- /A-) at Treasuries plus 150 bps on May 19.

The provider of entertainment, information and communication products and services is based in Philadelphia.

AT&T mixed

AT&T’s 3.4% notes due 2025 eased 3 bps to 158 bps bid in late afternoon trading, a source said.

The company sold $5 billion of the notes on April 23 at Treasuries plus 150 bps.

The tranche of 4.75% bonds due 2046 firmed 2 bps to 210 bps bid going out.

AT&T sold $3.5 billion of the bonds in the April 23 offering at 215 bps over Treasuries.

The telecommunications company is based in Dallas.

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