LabCorp meets blowout demand; Kommuninvest, Adobe also price; Adobe tightens in aftermarket

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 21 – Laboratory Corp. of America Holdings, Kommuninvest i Sverige AB, Adobe Systems Inc., Progressive Corp. and W.P. Carey Inc. sold new issues during a busy session for the investment-grade primary.

LabCorp’s new $2.9 billion deal was the highlight of the session, with the four tranches pricing around 22.5 basis points tight of the mid-point of initial guidance.

The deal was swamped with orders, attracting a book that was more than five times oversubscribed.

The session also saw Kommuninvest bring to market $1.25 billion of three-year notes at the tight end of guidance.

Adobe Systems was in the primary with an upsized $1 billion offering of 10-year senior notes, while Progressive priced $400 million of 30-year bonds.

Not all trades fared so well on Wednesday.

W.P. Carey was in the market with a $450 million offering of 10-year notes priced around 12.5 bps wide of the mid-point of initial guidance.

A planned 20-year tranche of notes was dropped from the offering.

Development Bank of Japan Inc. and Dexia Credit Local were also in the market with new bond deals on Wednesday.

In total, the primary saw nearly $8 billion of new issuance during another volatile session for the market, bringing the week’s total supply to $13.15 billion.

Investment-grade bonds headed out mostly unchanged to modestly tighter over the session, sources said.

The Markit CDX North American Investment Grade index improved 2 bps to a spread of 71 bps.

Adobe Systems’ 3.25% notes due 2025 tightened 7 bps in aftermarket trading, a trader said.

Progressive’s 3.7% notes due 2045 traded wrapped around issuance.

In other trading, Bank of America Corp.’s paper (Baa2/A-/A) tightened over the day.

Apple Inc.’s 3.45% notes due 2024 were unchanged after tightening 5 bps in the previous session, a market source said.

AT&T Inc.’s 3.9% notes due 2024 firmed 2 bps, while Verizon Communications Inc.’s 4.15% notes due 2024 traded flat to 1 bp tighter.

LabCorp sells $2.9 billion

Laboratory Corp. of America Holdings priced $2.9 billion of senior notes (Baa2/BBB/) on Wednesday in four tranches, according to a market source.

The company priced $500 million of 2.625% five-year notes at 130 bps over Treasuries.

Pricing was at 99.888 to yield 2.649%.

The $500 million of 3.2% seven-year notes priced at 99.919 to yield 3.213%, or 155 bps over Treasuries.

A $1 billion tranche of 3.6% 10-year notes priced at 99.85 to yield 3.618%.

The notes sold with a spread of Treasuries plus 175 bps.

There was also $900 million of 4.7% 30-year notes priced at 99.236 to yield 4.748%, or Treasuries plus 230 bps.

BofA Merrill Lynch, Wells Fargo Securities LLC and Credit Suisse Securities (USA) LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes and to help fund the company’s acquisition of Covance Inc.

The independent clinical laboratory company is based in Burlington, N.C.

Dexia prices in line

Dexia Credit Local priced $1.5 billion of five-year notes (Aa3/AA/) on Wednesday at mid-swaps plus 47 bps, according to an informed source.

The notes were talked at mid-swaps plus 45 bps to 48 bps, tightened from guidance in the mid- to high-40 bps area over mid-swaps.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. and Societe Generale were the joint bookrunners.

The regional bank, focusing on sustainable development, is based in Brussels.

Kommuninvest three-years

Kommuninvest priced $1.25 billion of 1% three-year notes (Aaa/AAA/) at mid-swaps plus 3 bps on Wednesday, an informed source said.

The notes priced at 99.829 to yield 1.058%.

Price talk was set in the mid-swaps plus 4 bps area.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities and Nordea were the bookrunners for the Rule 144A and Regulation S deal.

Kommuninvest offers funding to municipalities of Sweden and is based in Orebro.

Adobe upsizes

Adobe Systems priced an upsized $1 billion offering of 10-year senior notes (Baa1/A-/) on Wednesday at 155 bps over Treasuries, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at the tight end of talk, which was set in the 160 bps area over Treasuries.

The issue was upsized from $750 million.

Pricing was at 98.928 to yield 3.377%.

BofA Merrill Lynch, JPMorgan, RBS Securities Inc., Morgan Stanley, U.S. Bancorp Investments Inc. and Wells Fargo Securities were the bookrunners.

Proceeds will be used for general corporate purposes, which include repaying $600 million of Adobe’s 3.25% senior notes due 2015.

In the secondary market, Adobe Systems’ 3.25% notes due 2025 firmed to 148 bps bid, 144 bps offered, a trader said.

Adobe is a San Jose, Calif., computer software and services provider for businesses.

Progressive new issue

Progressive sold $400 million of 3.7% 30-year senior notes (A2/A+/A) on Wednesday at Treasuries plus 130 bps, according to a market source and an FWP filed with the SEC.

The notes sold at the tight end of guidance.

Pricing was at 99.479 to yield 3.729%.

Goldman Sachs & Co. was the bookrunner.

Proceeds will be used for general corporate purposes.

Progressive’s 3.7% notes due 2045 traded flat at 130 bps offered in the secondary market, a trader said.

The insurance company is based in Mayfield Village, Ohio.

DBJ offering

Development Bank of Japan priced $455 million of floating-rate notes (A1/AA-/) due 2020 at par to yield Libor plus 24 bps, a market source said.

Nomura, Goldman Sachs and JPMorgan were the bookrunners.

The financial services and investment company is based in Tokyo.

W.P. Carey prices wide

W.P. Carey priced $450 million of 4% senior notes (Baa2/BBB-/) due 2025 at Treasuries plus 220 bps, according to a market source.

Pricing was at 99.372 to yield 4.077%.

A previously announced 20-year tranche was dropped from the offering.

The company intends to use proceeds from the offering to repay amounts outstanding under its senior unsecured credit facility, to fund potential future acquisitions and for general corporate purposes.

Wells Fargo Securities, Barclays and BofA Merrill Lynch are the joint bookrunners.

New York-based W.P. Carey is a publicly traded REIT that provides long-term sale-leaseback and built-to-suit financing.

Bank of America stronger

Bank of America’s 4% notes due 2024 firmed 5 bps to 153 bps bid, according to a market source.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

Apple unchanged

Apple’s 3.45% notes due 2024 (Aa1/AA+/) were unchanged on the day at 77 bps bid, according to a market source.

Apple priced $2.5 billion of the notes on April 29, 2014 at a spread of Treasuries plus 77 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

AT&T firms

AT&T’s 3.9% notes due 2024 (A3/A-/A) firmed 2 bps to 145 bps bid, a market source said.

The issue priced in a $1 billion offering on March 5, 2014 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Verizon steady

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) were unchanged to 1 bp better at 162 bps bid, a source said.

The company sold $1.25 billion of the notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

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