Toyota prices $2 billion; L-3 Communications prices tight; L-3 firms; Prudential better

By Cristal Cody and Aleesia Forni

Virginia Beach, May 13 - High-grade issuers continued to take advantage of solid market conditions on Tuesday, with new deals from Toyota Motor Credit Corp., L-3 Communications Corp. and Lexington Realty Trust hitting the primary.

The session saw Toyota Motor Credit sell $2 billion of senior notes in three parts, a market source said.

The company priced $400 million of three-year floaters at par to yield Libor plus 20 basis points and $900 million of 1.125% three-year notes at Treasuries plus 30 bps.

There was also $700 million of 2.75% seven-year notes priced with a spread of Treasuries plus 60 bps.

Also on Tuesday, L-3 Communications sold $1 billion of senior notes in tranches due 2017 and 2024, a market source said.

L-3 Communications sold $350 million of 1.5% three-year notes at Treasuries plus 70 bps and $650 million of 3.95% 10-year notes at Treasuries plus 140 bps.

Both tranches priced at the tight end of talk.

Lexington Realty Trust priced $250 million of 10-year senior notes with a spread of Treasuries plus 180 bps.

Pricing was at the tight end of talk.

The session also saw Regency Centers LP price $250 million of 3.75% 10-year senior notes with a spread of Treasuries plus 120 bps.

The European Investment Bank came to market on Tuesday with a $5 billion offering of 1.75% five-year bonds priced with a spread of mid-swaps plus 10 bps.

Separately, Entergy Texas Inc. priced $135 million of 5.625% $25-par first mortgage bonds due June 1, 2064 (expected rating: Baa1/A-) on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

"It's doing very well," a trader said post-pricing, seeing the issue trade at $25.20.

Meanwhile on Tuesday, Finland's Municipality Finance plc set price talk for a planned $1 billion five-year notes offering in the mid-swaps plus 16 bps area, an informed source said.

Spreads were mostly unchanged over the session, except for new issues, according to market sources.

The Markit CDX North American Investment Grade series 22 index was flat at a spread of 63 bps.

L-3 Communications' notes tightened 3 bps to 7 bps in aftermarket trading, according to a trader.

The bonds from Lexington Realty Trust and Regency Centers were not seen in late-afternoon trading.

Prudential Financial, Inc.'s medium-term notes (Baa1/A/) traded about 1 bp to 1½ bps better, a trader said.

EIB prices five-years

The European Investment Bank priced $5 billion of 1.75% five-year bonds (Aaa/AAA/AAA) on Tuesday with a spread of mid-swaps plus 10 bps, or Treasuries plus 21.6 bps, according to a market source.

Pricing was at 99.576.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. were the joint bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

Toyota brings $2 billion

Toyota Motor Credit priced a $2 billion issue of senior notes in three tranches due 2017 and 2021, according to a market source.

A $400 million tranche of three-year floaters priced at par to yield Libor plus 20 bps.

There was also $900 million of 1.125% three-year notes sold at 99.947 to yield 1.143%, or Treasuries plus 30 bps.

Pricing was in line with talk.

Toyota Motor Credit also priced $700 million of 2.75% notes due 2021 at par with a spread of Treasuries plus 60 bps.

The notes sold at the tight end of talk.

The joint bookrunners were HSBC Securities (USA) Inc., BNP Paribas Securities Corp., Citigroup and RBS Securities Inc.

The U.S. funding arm of Toyota is based in Torrance, Calif.

L-3 prices tight

L-3 Communications priced $1 billion of senior notes (Baa3/BBB-/BBB-) in tranches due 2017 and 2024 on Tuesday, according to a market source and an FWP filed with the SEC.

A $350 million tranche of 1.5% three-year notes sold with a spread of Treasuries plus 70 bps, or 99.851 to yield 1.551%.

There was also $650 million of 3.95% notes due 2024 priced at 99.445 to yield 4.018%. The notes sold with a spread of Treasuries plus 140 bps.

Both tranches priced at the tight end of talk.

L-3 Communications' 1.5% notes due 2017 tightened to 67 bps bid in the secondary market, a trader said.

The tranche of 3.95% notes due 2024 firmed to 133 bps bid, 131 bps offered.

BofA Merrill Lynch, Barclays, SunTrust Robinson Humphrey Inc., Deutsche Bank, Mitsubishi UFJ Securities (USA) Inc., Scotia Capital (USA) Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to redeem the company's 3% convertible contingent debt securities due 2035 and for general corporate purposes.

The notes are guaranteed by the company's domestic subsidiaries.

The government-communications and intelligence contractor is based in New York City.

Lexington Realty prices

Lexington Realty Trust priced $250 million of 10-year senior notes (Baa2/BBB-/BBB) on Tuesday to yield Treasuries plus 180 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.883 to yield 4.414%.

The notes sold at the tight end of talk.

J.P. Morgan Securities LLC and Wells Fargo were the bookrunners.

The notes are guaranteed by Lepercq Corporate Income Fund LP.

Proceeds will be used to repay secured borrowings, to pay down amounts outstanding under the company's revolving credit facility and for other general corporate purposes.

The real estate investment trust for office, industrial and retail properties is based in New York City.

Regency new issue

Regency Centers sold a $250 million issue of 3.75% senior notes (Baa2/BBB/BBB) due 2024 on Tuesday with a spread of Treasuries plus 120 bps, according to an FWP filed with the SEC.

The notes priced at 99.482 to yield 3.812%.

Wells Fargo, JPMorgan, BofA Merrill Lynch and U.S. Bancorp were the joint bookrunners.

Proceeds will be used to fund eligible green projects, including the acquisition, construction, development or redevelopment of such projects.

The notes will be guaranteed by Regency Centers Corp., a Jacksonville, Fla., real estate investment trust that owns retail shopping centers.

Entergy preferreds

Entergy Texas sold $135 million of 5.625% $25-par first mortgage bonds due June 1, 2064 (expected rating: Baa1/A-) on Tuesday, according to an FWP filed with the SEC.

Morgan Stanley, BofA Merrill Lynch and Wells Fargo are the joint bookrunning managers.

Interest will be payable on the first day of March, June, September and December, beginning Sept. 1. The company can redeem the bonds on or after June 1, 2019 at par plus accrued interest.

Proceeds will be used to redeem outstanding debt currently bearing 7.875% interest and maturing in 2039.

Entergy Texas is a Beaumont, Texas-based energy provider.

Municipality Finance talk

Finland's Municipality Finance announced price talk for its planned $1 billion offering of five-year notes on Tuesday in the mid-swaps plus 16 bps area, an informed source said.

Barclays, Daiwa Securities America Inc., Credit Suisse Securities and RBC Capital Markets LLC are the bookrunners.

The credit institution for the municipal sector and state subsidized housing is based in Helsinki.

Prudential edges tighter

Prudential Financial's 3.5% notes due 2024 traded modestly better at 89 bps offered, a trader said on Tuesday afternoon.

The notes priced in a $700 million offering on Monday at Treasuries plus 90 bps.

Prudential Financial's tranche of 4.6% bonds due 2044 brought on Monday firmed to 111 bps offered, the trader said.

Prudential Financial sold $500 million of the bonds at Treasuries plus 112.5 bps.

The insurance, investment management and financial products and services provider is based in Newark, N.J.

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