Energy Transfer, Abbott, John Deere price; supply tops $60 billion; Coach, Microsoft firm

By Aleesia Forni and Cristal Cody

Virginia Beach, March 5 – Energy Transfer Partners LP, Abbott Laboratories, John Deere Capital Corp., Lam Research Corp. and Quest Diagnostics Inc. braved the winter storm that pummeled the East Coast to price bonds ahead of Friday’s nonfarm payrolls data.

Abbott Laboratories came to market with $2.5 billion of senior notes in three parts during the session.

There was also a $2.5 billion two-part offering priced by Energy Transfer Partners, with both tranches pricing at the tight end of price guidance.

Quest Diagnostics attracted more than $9 billion of orders for its new $1.2 billion issue of senior notes, which sold in three tranches on Thursday.

Also on Thursday, John Deere Capital offered $1 billion of senior notes in two tranches.

Lam Research upsized its new issue to $1 billion, selling both tranches of the deal around 30 basis points tight of initial price thoughts.

Newfield Exploration Co. was also in the market on Thursday with an upsized new issue.

The company sold $700 million of split-rated notes at the tight end of guidance.

The session also saw new deals from Alabama Power Co. and Retail Properties of America Inc.

In total, a staggering $64.22 billion of new issuance has hit the high-grade primary market this week, helped largely by Tuesday’s $21 billion trade from Actavis plc.

Bonds were mixed in secondary trading over the day, while credit spreads improved.

Coach Inc.’s 4.25% senior notes due 2025 firmed 5 bps.

Microsoft Corp.’s 4% senior notes due 2055 traded about 1 bp tighter.

Exxon Mobil Corp.’s senior notes (Aaa/AAA/) brought on Tuesday headed out about 1 bp weaker over the afternoon.

Kinder Morgan Inc.’s 5.05% senior notes due 2046 were unchanged.

The Markit CDX North American Investment Grade index tightened 2 bps to a spread of 60 bps.

Euro bond market on fire

The deluge of corporate new issuance is not just contained to the U.S. market.

Elsewhere on Thursday, Berkshire Hathaway Inc. sold a €3 billion three-part offering, and Whirlpool Corp. priced €500 million of bonds, joining the slew of U.S. issuers who completed euro-denominated bond offerings in recent weeks.

With rates at historic lows, many issuers are choosing to make their way to the European market in order to get deals done.

“It’s cheap, so it will likely continue,” a market source said.

In February, Coca-Cola Co. sold a record €8.5 billion of bonds in order to repay debt and for general corporate purposes in what was the largest euro deal from an American company.

Other U.S.-based firms to recently price euro bonds include Mondelez International Inc., Kellogg Co. and Priceline Group Inc.

Abbott offering

Abbott Laboratories sold a combined $2.5 billion of senior notes (A2/A+/) in three maturities on Thursday, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The issuance included a $750 million tranche of 2% five-year notes sold at 99.81 to yield 2.04%, or Treasuries plus 48 bps.

The notes sold at the tight end of guidance after having firmed from initial talk in the 60 bps area over Treasuries.

The bookrunners were Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, BNP Paribas Securities Corp. and Morgan Stanley & Co. LLC.

There was also $750 million of 2.55% notes due 2022 sold at 99.834 to yield 2.576%, or 68 bps over Treasuries.

Pricing was at the tight end of the 70 bps area over Treasuries guidance, tightened from initial talk in the 80 bps area over Treasuries.

The bookrunners were Barclays, BofA Merrill Lynch, JPMorgan, Morgan Stanley and SG Americas Securities LLC.

Finally, a $1 billion tranche of 2.95% 10-year notes sold at 99.793 to yield 2.974%.

The notes sold with a spread of Treasuries plus 88 bps.

Pricing was at the tight end of guidance set in the Treasuries plus 90 bps area. Initial talk was set in the Treasuries plus 100 bps area.

The bookrunners for the 10-year tranche were Barclays, BofA Merrill Lynch, JPMorgan, Morgan Stanley and Deutsche Bank Securities Inc.

Proceeds will be used for general corporate purposes.

The pharmaceutical health-care products company is based in Abbott Park, Ill.

Energy Transfer two-parter

Also on Thursday, Energy Transfer Partners priced $2.5 billion of senior notes (Baa3/BBB-/BBB-) in three tranches on Thursday, according to a market source.

A $1 billion tranche of 4.05% notes due 2025 sold with a spread of 195 bps over Treasuries. Pricing was at 99.918 to yield 4.06%.

The notes sold at the tight end of guidance set in the 200 bps area over Treasuries.

A second tranche was $500 million of 4.9% notes due 2035 priced at 99.81 to yield 4.915%, or Treasuries plus 220 bps.

The notes priced at the tight end of guidance in the Treasuries plus 225 bps area.

Finally, $1 billion of 5.15% notes due 2045 sold at 99.772 to yield 5.165%, or Treasuries plus 245 bps.

Guidance was set in the 250 bps area over Treasuries.

Citigroup Global Markets Inc., RBC Capital Markets LLC and UBS Investment Bank were the joint bookrunners.

Proceeds will be used to repay borrowings outstanding under a revolving credit facility, to fund growth capital expenditures and for general partnership purposes.

The energy gathering and transportation company is based in Dallas.

Quest sells $1.2 billion

Quest Diagnostics issued $1.2 billion of senior notes (Baa2/BBB/) in tranches due 2020, 2025 and 2045 on Thursday, according to a market source and an FWP filed with the SEC.

There was $300 million of 2.5% five-year notes sold at 99.688 to yield 2.566%, or Treasuries plus 100 bps.

Price guidance was set in the 105 bps area.

A $600 million 3.5% 10-year note priced with a spread of Treasuries plus 140 bps, at the tight end of guidance set in the 145 bps area.

The notes priced at 99.956 to yield 3.505%.

There was also a $300 million tranche of 4.7% 30-year notes priced at 99.917 to yield 4.705%, or Treasuries plus 200 bps.

The notes sold at the tight end of the 205 bps area over Treasuries guidance.

Goldman Sachs & Co., JPMorgan, Morgan Stanley and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to fund a tender offer and redeem the company’s $500 million of 5.45% notes due 2015, $375 million of 6.4% notes due 2017 and $150 million of 3.2% notes due 2016.

The diagnostic testing company is based in Madison, N.J.

John Deere new issue

John Deere Capital was in Thursday’s market pricing a $1 billion issue of senior notes (A2/A/) in tranches due 2017 and 2020, according to an informed source and two separate FWP filings with the SEC.

The sale included $500 million of two-year floating-rate notes priced at par to yield Libor plus 13 bps.

The notes sold at the tight end of guidance set in the Libor plus 15 bps area.

A second tranche was $500 million of 2.05% five-year notes sold at 99.783 to yield 2.096%, or Treasuries plus 53 bps.

Pricing was at the tight end of the Treasuries plus 55 bps area guidance.

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

Deutsche Bank Securities, HSBC Securities (USA) Inc. and BofA Merrill Lynch were the bookrunners.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

Lam upsizes

Lam Research sold an upsized $1 billion offering of senior notes (Baa1/BBB/) in two tranches on Thursday, according to a market source and an FWP filed with the SEC.

A $500 million tranche of 2.75% notes due 2020 priced at 99.916 to yield 2.768%, or Treasuries plus 120 bps.

Pricing was at the tight end of guidance set in the 125 bps area, tightened from initial talk in the 150 bps area over Treasuries.

There was also $500 million of 3.8% notes due 2025 sold at 99.958 to yield 3.805%, or Treasuries plus 170 bps.

The notes sold at the tight end of the Treasuries plus 175 bps area guidance. Initial talk was set in the 200 bps area.

BofA Merrill Lynch and JPMorgan were the bookrunners.

Proceeds will be used for corporate purposes, including working capital and capital expenditures. A portion of the net proceeds will be used to repay debt, acquire other businesses, products or technologies or repurchase shares of common stock under the company’s stock repurchase program.

Lam Research is a Fremont, Calif.-based semiconductor equipment company.

Newfield crossovers

In other primary happenings, Newfield Exploration sold an upsized $700 million of split-rated non-callable 5.375% 10.75-year senior notes on Thursday at par with a spread of Treasuries plus 325 bps, according to a market source and an FWP filed with the SEC.

The notes (expected Ba1/expected BBB-/confirmed BB+) priced at the tight end of talk set at 5.375% to 5.5%.

JPMorgan, Wells Fargo Securities, MUFG, Scotia Capital, U.S. Bancorp Investments Inc. and Goldman Sachs were the joint bookrunners for the public offering.

The Woodlands, Texas-based oil and gas exploration, development and production company plans to use the proceeds, along with cash on hand or a draw on its revolver, to redeem its outstanding 6.875% senior subordinated notes due 2020.

Alabama Power price tight

Alabama Power priced $550 million of 3.75% senior notes (A1/A/A+) on Thursday at the tight end of guidance with a spread of 107 bps over Treasuries, according to an FWP filed with the SEC.

Guidance was set in the 110 bps area over Treasuries.

Pricing was at 99.306 to yield 3.789%.

The bookrunners were Barclays, Goldman Sachs, BofA Merrill Lynch, Mizuho Securities USA Inc. and Morgan Stanley.

The electric subsidiary of Southern Co. is based in Birmingham, Ala.

Retail Properties offer

Rounding out the day’s new deals, Retail Properties of America sold $250 million of 4% senior notes (Baa3/BBB-/) due 2025 on Thursday at Treasuries plus 195 bps, according to an FWP filed with the SEC.

Pricing was at 99.526 to yield 4.058%.

The bookrunners were Wells Fargo Securities, Citigroup Global Markets, Deutsche Bank Securities and Jefferies.

Proceeds will be used for general business purposes.

The company is an Oak Brook, Ill.-based real estate investment trust.

Coach tightens

Coach’s 4.25% notes due 2025 tightened 5 bps to 210 bps bid, a market source said.

Coach sold $600 million of the notes (Baa2/BBB-/BBB) on Feb. 23 at a spread of 225 bps over Treasuries.

The luxury leather goods company is based in New York.

Microsoft firms

Microsoft’s 4% bonds due 2055 firmed 1 bp to 142 bps bid, according to a market source.

Microsoft sold $2.25 billion of the bonds (Aaa/AAA/) on Feb. 9 at 153 bps plus Treasuries.

The computer software company is based in Redmond, Wash.

Exxon Mobil eases

Exxon Mobil’s 1.912% notes due 2020 traded 1 bp softer wrapped around issuance at 30 bps bid, according to a market source.

The issue priced in a $1.5 billion offering on Tuesday at Treasuries plus 30 bps.

Exxon Mobil’s 2.709% notes due 2025 eased 1 bp to 59 bps bid, the source said.

The company sold $1.75 billion of the 10-year notes Treasuries plus 58 bps on Tuesday.

The oil and gas company is based in Irving, Texas.

Kinder Morgan steady

Kinder Morgan’s 5.05% notes due 2046 traded flat at 238 bps bid, according to a market source.

The company sold $800 million of the bonds (Baa3/BBB-/BBB-) on Feb. 23 at Treasuries plus 240 bps.

The pipeline operator is based in Houston.

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