BNP brings bonds; Keysight, Atmos, Public Service New Hampshire price; Cadence tightens

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 6 – BNP Paribas SA and Keysight Technologies Inc. joined a hodgepodge of corporate issuers pricing new deals on Monday.

The new $1 billion subordinated offering from BNP Paribas stole the limelight during the session, taking advantage of the strong appetite for tier 2 bonds.

The deal attracted an order book that was more than three times oversubscribed, a source noted, with the new issue pricing at the tight end of talk, which had firmed around 20 basis points compared to initial guidance.

Meanwhile, Keysight Technologies priced a $1.1 billion offering of senior notes in two tranches ahead of its planned spinoff from Agilent Technologies, Inc.

The session also saw utilities Wisconsin Power & Light Co., Atmos Energy Corp. and Public Service Co. of New Hampshire price new deals at the tight end of price talk.

Cadence Design Systems Inc. and Marriott International Inc. also sold new issues during the session.

In other primary happenings on Monday, KfW announced plans to bring to market an offering of green bonds, mandating leads and setting talk for the planned deal.

In total, $3.68 billion of investment-grade bonds sold during the session on Monday.

Sources are expecting around $15 billion to $20 billion to price for the first full week of October, though activity will likely slow this month compared to the deluge of deals seen in September.

“We’ve got a few lined up for tomorrow, but shouldn’t be too crazy,” one syndicate source said.

Investment-grade bond spreads weakened over the session, while new issues traded mostly better, according to market sources.

The Markit CDX North American Investment Grade series 22 index was quoted late afternoon 8 bps wider at a spread of 67 bps.

In aftermarket trading, Cadence Design’s 4.375% notes due 2024 tightened more than 10 bps, a trader said.

Marriott International’s 3.125% notes due 2021 firmed 1 bp in aftermarket trading.

New energy and electric utility bonds were flat to tighter, according to a trader.

Public Service Co. of New Hampshire’s 3.5% bonds due 2023 tightened 7 bps on the offered side in the secondary market, a trader said.

Atmos Energy’s 4.125% notes due 2044 firmed 1 bp.

Wisconsin Power & Light’s 4.1% debentures due 2044 traded wrapped around issuance.

In other new issue trading, Keysight Technologies’ two tranches of notes tightened 2.5 bps, according to a trader.

BNP brings tier 2 notes

Monday’s primary session saw BNP Paribas sell $1 billion of 4.25% subordinated tier 2 notes due Oct. 15, 2024 at Treasuries plus 195 bps, a market source said.

Pricing was at 99.116 to yield 4.36%.

The notes (Baa2/BBB/A) sold at the tight end of price talk, which had firmed around 20 bps from initial guidance.

BNP Paribas Securities Corp. was the bookrunner.

The financial services company is based in Paris.

Keysight two-parter

Keysight Technologies sold $1.1 billion of senior notes (Baa3/BBB-/BBB) in five- and 10-year tranches on Monday, a market source said.

The sale included $500 million of 3.3% five-year notes priced at Treasuries plus 162.5 bps, or 99.902 to yield 3.321%.

A second tranche was $600 million of 4.55% 10-year notes priced with a spread of Treasuries plus 212.5 bps. The notes sold at 99.966 to yield 4.554%.

Keysight Technologies’ notes due 2019 tightened to 160 bps bid, 155 bps offered, a trader said.

The company’s notes due 2024 firmed to 210 bps bid, 205 bps offered in secondary trading.

Citigroup Global Markets Inc., Goldman Sachs & Co., BofA Merrill Lynch, Barclays, BNP Paribas Securities Corp. and Credit Suisse Securities (USA) LLC were the bookrunners.

The notes sold via Rule 144A and Regulation S.

Proceeds will be used to make a cash distribution to Agilent Technologies, Inc., of which Keysight is a wholly owned subsidiary, and to fund working capital and other liquidity needs.

The notes will initially will be guaranteed by Agilent, which will terminate upon the earliest to occur of the completion of Keysight’s previously announced separation from Agilent, Agilent ceasing to beneficially own a majority of Keysight’s common stock and the consummation of a legal defeasance or covenant defeasance or discharge of the indenture relating to the notes.

Keysight is a Santa Rosa, Calif.-based electronic measurement technology company.

Atmos prices tight

Also on Monday, Atmos Energy priced $500 million of 4.125% senior notes due 2044 with a spread of Treasuries plus 103 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

Pricing was at the tight end of talk, set in the 105 bps over Treasuries area.

The notes (A2/A-/A-) sold at 99.812 to yield 4.136%.

Atmos Energy’s 4.125% notes due 2044 headed out in secondary trading at 102 bps bid, 99 bps offered, a trader said.

The bookrunners were BofA Merrill Lynch, Credit Agricole CIB, Wells Fargo Securities LLC, BNP Paribas Securities Corp. and RBS Securities Inc.

Proceeds will be used to repay the company’s $500 million of 4.95% senior notes at maturity on Oct. 15, 2014.

The natural gas transportation and storage company is based in Dallas.

Marriott new issue

In other primary action, Marriott International sold $400 million of 3.125% series N senior notes (Baa2/BBB/) due 2021 with a spread of Treasuries plus 110 bps, according to an FWP filing with the SEC.

Pricing was at 99.314 to yield 3.235%.

Marriott International’s 3.125% notes due 2021 traded better at 109 bps bid, 107 bps offered, a trader said.

Bookrunners were J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases or repayment of outstanding commercial paper borrowings.

The lodging company is based in Bethesda, Md.

Cadence upsizes

Cadence Design Systems sold an upsized $350 million issue of 4.375% 10-year senior notes on Monday at Treasuries plus 200 bps, according to an informed source and an FWP filed with the SEC.

The notes (Baa2/BBB-/BBB+) sold at 99.614 to yield 4.423%.

Cadence Design’s 4.375% notes due 2024 were quoted stronger at 189 bps bid, 185 bps offered in the secondary market, according to a trader.

JPMorgan and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used for general corporate purposes, which may include the retirement of debt, working capital, capital expenditures, potential acquisitions and strategic transactions.

Based in San Jose, Calif., Cadence provides tools and services for semiconductor design.

Wisconsin P&L offering

Wisconsin Power & Light sold $250 million of 4.1% 30-year debentures on Monday at Treasuries plus 98 bps, according to a market source and an FWP filed with the SEC.

The notes sold at the tight end of price talk.

Pricing was at 99.914 to yield 4.105%.

Wisconsin Power & Light’s 4.1% debentures due 2044 were mostly unchanged in aftermarket trading at 98 bps bid, 96 bps offered, a trader said.

BofA Merrill Lynch, JPMorgan and Mizuho Securities USA Inc. were the bookrunners.

Proceeds will be used repay commercial paper and for other general corporate purposes.

The Madison, Wis.-based public utility distributes electricity and natural gas to central and southern Wisconsin.

Public Service adds-on

Also on Monday, Public Service Co. of New Hampshire priced a $75 million add-on to its existing 3.5% first mortgage bonds (A2/A/A), series S, due Nov. 1, 2023 at Treasuries plus 73 bps, according to a market source and an FWP filed with the SEC on Wednesday.

Pricing was at 102.719 to yield 3.144%.

Mizuho Securities and RBS Securities were the joint bookrunners.

Proceeds from the offering will be used to refinance short-term debt.

The original $250 million issue was sold on Nov. 6, 2013 at Treasuries plus 90 bps.

The subsidiary of Northeast Utilities is based in Manchester, N.H.

Bank/brokerage CDS costs

Investment-grade bank and brokerage CDS prices were lower on Monday, according to a market source.

Bank of America Corp.’s CDS costs fell 1 bp to 69 bps bid, 72 bps offered. Citigroup Inc.’s CDS costs were 1 bp lower at 69 bps bid, 72 bps offered. JPMorgan Chase & Co.’s CDS costs were 3 bps lower at 54 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs declined 2 bps to 43 bps bid, 48 bps offered.

Merrill Lynch’s CDS costs were 1 bp lower at 73 bps bid, 76 bps offered. Morgan Stanley’s CDS costs ended 3 bps lower at 79 bps bid, 82 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 4 bps lower at 80 bps bid, 85 bps offered.

Paul Deckelman contributed to this review

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