Disney upsizes, joins Enbridge, PSE&G in primary market; Wells Fargo, JPMorgan better

By Cristal Cody and Aleesia Forni

Virginia Beach, May 28 - Walt Disney Co., Enbridge Inc. and Public Service Electric & Gas Co. were among the issuers bringing new deals to Wednesday's primary.

With Wednesday's deals, the high-grade market has seen nearly $11 billion of new issuance price so far during the Memorial-holiday shortened week.

Walt Disney sold a $2 billion issue of senior notes in four tranches, a market source said.

The trade included $500 million of 0.875% three-year notes at priced Treasuries plus 20 basis points, $250 million of floating-rate notes due 2019 priced at par to yield Libor plus 31 bps and $750 million of 1.85% notes due 2019 sold at Treasuries plus 40 bps.

There was also $500 million of 4.125% notes due 2044 priced with a spread of Treasuries plus 85 bps.

All fixed-rate tranches of the deal sold tighter than guidance.

Also on Wednesday, Enbridge priced $1.5 billion of senior notes in tranches due 2017, 2024 and 2044, according to an informed source.

The Calgary, Alta.-based oil and gas distributor priced $500 million of three-year floaters to yield Libor plus 45 bps.

A $300 million tranche of 3.5% notes due 2024 priced with a spread of Treasuries plus 110 bps, while $500 million of 4.5% 30-year bonds sold at Treasuries plus 125 bps.

The deal's three tranches each sold at the tight end of talk.

Public Service Electric & Gas brought to market a $500 million sale of secured medium-term notes in two parts.

The sale included $250 million of 1.8% notes due June 1, 2019 priced at 99.819 and $250 million of 4% bonds due June 1, 2044 sold at 99.051.

ITC Holdings Corp. was also in Wednesday's primary, pricing $400 million of 3.65% 10-year senior notes at Treasuries plus 125 bps.

Pricing was 20 bps tighter than original guidance.

High-grade bonds traded mostly flat to slightly wider over the day, according to market sources.

The Markit CDX North American Investment Grade series 22 index was unchanged at a spread of 63 basis points.

Financial paper was better in the secondary market, according to a market source.

Wells Fargo & Co.'s 5.375% subordinated notes due 2043 climbed more than 3 points on the day.

JPMorgan Chase & Co.'s 3.625% notes dues 2024 traded moderately better, according to a market source.

Disney prices $2 billion

Walt Disney priced $2 billion of senior notes (A2/A/A) during Wednesday's session in four tranches, according to two FWP filings with the Securities and Exchange Commission and a market source.

The company priced $500 million of 0.875% three-year notes at Treasuries plus 20 bps.

Pricing was at 99.82 to yield 0.936%.

A second tranche was $250 million of floating-rate notes due 2019 priced at par to yield Libor plus 31 bps.

There was also $750 million of 1.85% notes due 2019 sold at 99.9 to yield 1.871%, or Treasuries plus 40 bps.

Finally, $500 million of 4.125% notes due 2044 priced with a spread of 85 bps over Treasuries.

The notes sold at 99.829 to yield 4.135%.

The bookrunners were HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.

The entertainment and media company is based in Burbank, Calif.

Enbridge prices tight

Enbridge priced $1.5 billion of senior notes in tranches due 2017, 2024 and 2044, according to an informed source.

The company priced a $500 million tranche of three-year floating-rate notes at par to yield Libor plus 45 bps.

A $300 million tranche of 3.5% 10-year notes sold at 99.656 to yield 3.514%, or Treasuries plus 110 bps.

$500 million of 4.5% 30-year bonds sold at 99.493 to yield 4.531%, or Treasuries plus 125 bps.

All three tranches sold at the tight end of talk.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., DnB NOR Markets Inc., BNP Paribas Securities Corp., Mitsubishi UFJ Securities, Mizuho Securities and Wells Fargo Securities LLC were the joint bookrunners.

Enbridge was last in the U.S. high-grade market with $1.15 billion of senior notes priced in two parts on Sept. 25.

The deal included $350 million three-year floating-rate notes priced at par to yield Libor plus 65 bps and $800 million of 4% notes due 2023 sold with a spread of Treasuries plus 150 bps.

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

Enbridge is a Calgary, Alta.-based oil and gas distributor and transportation company.

PSE&G new issue

Public Service Electric & Gas sold $500 million of secured medium-term notes, series I, in tranches due 2019 and 2044, according to separate FWP filings with the Securities and Exchange Commission.

The sale is included $250 million of 1.8% notes due June 1, 2019 priced at 99.819

A second tranche was $250 million of 4% bonds due June 1, 2044 sold at 99.051

The joint bookrunners were, CIBC World Markets LLC, J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA) Inc., Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc.,

BNY Mellon Capital Markets LLC, MFR Securities Inc. and U.S. Bancorp Investments Inc. were the co-managers.

Proceeds will be used for general corporate purposes.

PSE&G is a Newark, N.J.-based utility.

ITC issues 10-years

ITC Holdings priced $400 million of 3.65% senior notes due 2024 on Wednesday with a spread of Treasuries plus 125 bps, according to a market source and a FWP filed with the Securities and Exchange Commission.

The notes (Baa2/BBB+/) priced 20 bps tighter than initial guidance.

Pricing was at 99.666 to yield 3.69%.

Barclays, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to repay borrowings under the company's revolving credit agreement, with remaining proceeds being used for general corporate purposes.

ITC Holdings was last in the U.S. bond market with $550 million of senior notes priced in two tranches on June 26, 2013.

The trade included $250 million of 4.05% 10-year notes priced at Treasuries plus 155 bps and $300 million of 5.3% 30-year bonds priced at 175 bps over Treasuries.

The power transmission company is based in Novi, Mich.

JPMorgan better

In secondary action, JPMorgan Chase's 3.625% senior notes due 2024 (A3/A/A+) rose to 100.73 on Wednesday, according to a market source.

The notes traded at 100.16 in the previous session.

JPMorgan sold $2 billion of the notes on May 6 at par.

The financial services company is based in New York City.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 67 bps bid, 70 bps offered. Citigroup Inc.'s CDS costs were flat at 67 bps bid, 70 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 55 bps bid, 58 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 73 bps bid, 76 bps offered. Morgan Stanley's CDS costs widened 1 bp to 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.'s CDS costs were flat at 79 bps bid, 82 bps offered.

Paul Deckelman contributed to this review

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