Intel, Amgen price notes; Caterpillar sells add-on in reverse inquiry; utilities bring bonds

By Cristal Cody

Tupelo, Miss., May 8 – Intel Corp. led Monday’s deal action in the investment-grade bond market with a $6.5 billion seven-part offering of senior notes.

Pricing action was strong over the session with four other issuers in the primary market.

Amgen Inc. priced a $3.5 billion five-part offering of senior notes.

Appalachian Power Co. sold $325 million of 10-year senior notes.

PPL Electric Utilities Corp. brought $475 million of 30-year first mortgage bonds to the market.

Also, Caterpillar Financial Services Corp. placed a $200 million reopening of its 3.3% medium-term senior notes due June 9, 2024 in a reverse inquiry.

In other deal action, Anheuser-Busch InBev Finance, Inc. tapped the Canadian high-grade primary market with a C$2 billion two-tranche offering of notes.

“We had Pepsi last week and now this week Anheuser-Busch,” a source said.

PepsiCo Inc. priced C$750 million of 2.15% seven-year senior notes on May 1.

About $30 billion to $35 billion of U.S. supply is expected by syndicate sources for the week.

The Markit CDX North American Investment Grade index closed mostly unchanged at a spread of 62 basis points.

Intel sells $6.5 billion

Intel priced $6.5 billion of senior notes (A1/A+/A+) in seven tranches, according to a market source.

Intel priced $700 million of three-year floating-rate notes at Libor plus 8 bps.

The company sold $1 billion of 1.85% three-year fixed-rate notes at a spread of Treasuries plus 33 bps.

The $800 million tranche of five-year floating-rate notes priced at Libor plus 35 bps.

Intel priced the $750 million offering of 2.35% five-year fixed-rate notes at a Treasuries plus 45 bps spread.

Intel sold $1.25 billion of 2.875% seven-year notes at a spread of 68 bps over Treasuries.

The $1 billion tranche of 3.15% 10-year notes priced with a Treasuries plus 80 bps spread.

In the final tranche, Intel sold $1 billion of 4.1% 30-year notes at a spread of 110 bps over Treasuries.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, according to a 424B5 filing with the Securities and Exchange Commission.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

Amgen prices $3.5 billion

Amgen priced a $3.5 billion five-part offering of senior notes (Baa1/A/) on Monday, according to a market source.

The company sold $300 million of two-year floating-rate notes at Libor plus 32 bps.

Amgen priced a $700 million offering of 1.9% two-year fixed-rate notes at a spread of 60 bps over Treasuries.

Amgen priced a $300 million tranche of three-year floating-rate notes at Libor plus 45 bps.

The company also priced a $700 million three-year fixed-rate with a 2.2% coupon and a Treasuries plus 70 bps spread.

In the final tranche, Amgen sold $1.5 billion of 2.65% five-year fixed-rate notes at a spread of 80 bps over Treasuries.

BofA Merrill Lynch, Goldman Sachs & Co., Barclays and Mizuho Securities USA Inc. were the bookrunners.

The floaters are non-callable, while the 2019 and 2020 fixed-rate notes will have make-whole calls and the 2022 fixed-rate notes feature a make-whole call until a month prior to maturity and then a par call, according to a 424B3 filing with the SEC.

Proceeds from the deal will be used for general corporate purposes.

Amgen is a Thousand Oaks, Calif., manufacturer and marketer of human therapeutics based upon advances in cellular and molecular biology.

Appalachian Power in primary

Appalachian Power sold $325 million of 3.3% series X 10-year senior notes on Monday at a spread of 98 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa1/A-/) priced at 99.49 to yield 3.36%.

BNP Paribas Securities Corp., KeyBanc Capital Markets Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes relating to the company’s utility business, including to fund the payment at maturity of $250 million outstanding of 5% series K senior notes due June 1, 2017.

Appalachian Power is a Columbus, Ohio-based electric utility.

PPL Electric sells bonds

PPL Electric Utilities (A3/A-/) sold $475 million of 3.95% 30-year first mortgage bonds on Monday at a spread of 98 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 98.99 to yield 4.008%.

Citigroup Global Markets Inc., Mizuho Securities USA Inc., RBC Capital Markets Corp. and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds will be used to repay short-term debt.

The electric company is based in Allentown, Pa.

Caterpillar’s $200 million tap

Caterpillar Financial Services (A3/A/A) priced a $200 million reopening of its 3.3% series H medium-term senior notes due June 9, 2024 on Monday in a reverse inquiry, according to an FWP filing with the SEC.

The notes priced at 102.252 to yield 2.945%, or a spread of Treasuries plus 58 bps.

MUFG was the bookrunner.

Caterpillar Financial Services originally sold $250 million of the notes on June 2, 2014 at 99.713 to yield 3.334%, or 80 bps over Treasuries. The total outstanding now is $450 million.

Proceeds from the deal are expected to be used for financing and leasing transactions, customer and dealer loans and other corporate purposes.

Nashville-based Caterpillar Financial Services is a financing arm of Caterpillar Inc.

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