Daimler, Lloyds, Verisk price during frenzied primary session; Shell, Apple notes stronger

By Aleesia Forni and Cristal Cody

Virginia Beach, May 11 – Daimler Finance North America LLC, Lloyds Bank plc and Verisk Analytics Inc. priced new deals on Monday during a flooded primary session.

More than $10.67 billion of new high-grade bond issuance priced during the trading day, kicking off what is predicted to be around a $35 billion week for the investment-grade market.

In the day’s two largest new issues, Daimler priced $3 billion of bonds in four tranches, while Lloyds Bank sold $2.9 billion of notes in three parts.

Verisk Analytics plans to use proceeds from a new $1.25 billion offering to fund its planned acquisition of H&F Nugent 1 Ltd.

Meanwhile, Virginia Electric & Power Co. sold $700 million of senior notes in two parts, both around 20 basis points tighter than initial price thoughts.

ERP Operating, LP attracted an order book that was more than three times oversubscribed for a new $750 million two-part offering.

Also on Monday, Seagate Technology plc upsized its new deal to $700 million from initial size thoughts of $400 million. The deal ultimately priced around 22.5 bps tighter than initial talk.

Paccar Financial Corp., Puget Sound Energy Inc. and Appalachian Power Co. were also in the market with new bond offerings during the session.

In forward calendar news, NRW Bank and Oesterreichische Kontrollbank AG each announced price talk for planned bond offerings.

New high-grade bonds traded mostly better, while credit spreads weakened over the session.

Shell International Finance BV’s 3.25% senior notes due 2025 brought in the previous week remained tight in secondary trading.

Apple Inc.’s 3.2% senior notes due 2025 that priced on Wednesday were quoted nearly 30 bps better than issuance but saw few major trades over the day.

“Haven’t seen any real quotes since the sell-off really kicked in midmorning,” a trader said.

Goldman Sachs Group Inc.’s 3.5% notes due 2025 softened over the session.

Wells Fargo & Co.’s 2.15% senior notes due 2020 widened 4 bps in the secondary market.

The Markit CDX North American Investment Grade series 23 index eased 2 bps to a spread of 65 bps.

Daimler sells $3 billion

Daimler Finance North America tapped Monday’s market for a $3 billion issue of notes (A3/A-/A-) in tranches due 2018, 2020 and 2025, an informed source said.

Daimler sold $800 million of 1.65% three-year notes at 99.872 to yield 1.694%, or Treasuries plus 70 bps.

Pricing was on top of guidance after having tightened from the Treasuries plus mid-70 bps area initial talk.

A second tranche was $250 million of three-year floating-rate notes priced at par to yield Libor plus 45 bps.

The notes were guided at the three-year fixed-rate tranche’s Libor equivalent.

A $1.3 billion 2.45% five-year note priced at 99.804 to yield 2.492%, or Treasuries plus 90 bps.

The notes priced on top of talk. Initial guidance was set in the low- to mid-90 bps area over Treasuries.

Finally, a $650 million 3.3% 10-year note sold with a spread of 105 bps over Treasuries. Pricing was at 99.797 to yield 3.324%.

The issue sold on top of guidance after having tightened from initial talk in the Treasuries plus 110 bps area.

Bookrunners are BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Lloyds and Mizuho Securities USA Inc.

Proceeds will be used for general corporate purposes.

The financing unit of Daimler AG is based in Stuttgart, Germany.

Lloyds offering

Also on Monday, Lloyds Bank sold a $2.9 billion three-tranche offering of senior notes (A1/A/A), according to a market source.

A $1.25 billion 1.75% note due 2018 sold at 99.904 to yield 1.783%, or 80 bps over Treasuries.

The notes sold on top of guidance. Initial talk was set in the high-80 bps area.

There was also a $400 million floating-rate note due 2018 priced at par to yield Libor plus 55 bps.

Guidance was set at the Libor equivalent to the three-year fixed-rate notes.

BofA Merrill Lynch, Deutsche Bank Securities Inc., Lloyds Securities LLC, JPMorgan and TD Securities are the bookrunners for the three-year tranches.

Finally, $1.25 billion of 3.5% notes due 2025 sold at 99.732 to yield 3.532%, or Treasuries plus 127 bps.

Price guidance was set in the Treasuries plus 130 bps area having tightened from talk in the high-130 bps area over Treasuries.

BofA Merrill Lynch, Deutsche Bank Securities Inc., Lloyds Securities, JPMorgan and Wells Fargo Securities LLC are the bookrunners for the 10-year tranche.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by Lloyds Banking Group plc.

The retail bank is based in London.

Verisk acquisition financing

Verisk Analytics sold a $1.25 billion issue of 10- and 30-year senior notes (Baa3/BBB-/BBB+) on Monday, according to a market source.

The issuer priced a $900 million 4% 10-year note at 99.463 to yield 4.065%, or Treasuries plus 180 bps.

The notes priced at the tight end of the Treasuries plus 185 bps area guidance. The notes were initially talked in the Treasuries plus 200 bps area.

A second tranche was $350 million of 5.5% 30-year bonds priced at 99.657 to yield 5.523%, or 250 bps over Treasuries.

The notes sold on top of talk and in line with initial guidance.

The joint bookrunners are BofA Merrill Lynch, JPMorgan, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities.

The offering is part of the financing of the company’s acquisition of H&F Nugent 1, the indirect parent company of Wood Mackenzie Ltd.

The risk analysis and management company is based in Jersey City, N.J.

ERP sells 10, 30-year notes

ERP Operating was in the market on Monday with a $750 million two-part offering of senior notes (Baa1/A-/A-) due June 1, 2025 and June 1, 2045, according to a market source.

A $450 million tranche of 3.375% 10-year notes priced at 99.45 to yield 3.44%, or Treasuries plus 118 bps.

The notes sold at the tight end of guidance in the 120 bps area over Treasuries, which tightened from talk in the range of Treasuries plus 130 bps to 135 bps.

There was also $300 million of 4.5% 30-year bonds sold at 150 bps over Treasuries. Pricing was at 99.622 to yield 4.523%.

Guidance was set in the 155 bps area over Treasuries, tighter than talk set in the range of Treasuries plus 160 bps to 165 bps.

The bookrunners are Citigroup, Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

Proceeds will be used for working capital and general corporate purposes.

The unit of apartment property builder and manager Equity Residential is based in Chicago.

Seagate upsizes

Seagate HDD Cayman, an indirect wholly owned subsidiary of Seagate Technology, sold an upsized $700 million offering of 4.875% 12-year senior notes (Baa3/BBB-/BBB-) on Monday at Treasuries plus 265 bps, according to an informed source.

The notes were upsized from a planned $400 million and sold at the tight end of the Treasuries plus 270 bps area guidance. Talk was set in the area of 287.5 bps over Treasuries.

Pricing was at 99.718 to yield 4.906%.

Morgan Stanley was the active bookrunner and BofA Merrill Lynch was the passive bookrunner for the Rule 144A and Regulation S deal.

The Cupertino, Calif.-based computer hard drive manufacturer plans to use the proceeds for general corporate purposes, including the redemption of its 6.875% notes due 2020, capital expenditures and other investments in the business

Vepco two-parter

Virginia Electric & Power sold $700 million of senior notes (A2/A-/A) due 2025 and 2045 on Monday, according to an FWP filing with the Securities and Exchange Commission.

The sale included $350 million of 3.1% 10-year series A notes at Treasuries plus 85 bps. The notes sold at 99.838 to yield 3.119%.

The tranche was talked at the Treasuries plus 105 bps area.

A second tranche was $350 million of 4.2% 30-year series B notes priced at 99.644 to yield 4.221%, or Treasuries plus 120 bps.

The notes were talked in the Treasuries plus 140 bps area.

BNP Paribas Securities Corp., JPMorgan and Mizuho Securities are the joint bookrunners.

The company plans to use the proceeds for general corporate purposes, including the repayment of short-term debt.

The electric utility is based in Richmond, Va.

Appalachian Power new issue

Appalachian Power was in the market on Monday with a $650 million offering of senior notes (Baa1/BBB/) in two tranches, according to a market source and a FWP filed with the SEC.

The sale includes $300 million of 3.4% series V notes due 2025 priced at Treasuries plus 120 bps, or 99.645 to yield 3.442%.

The notes sold at the tight end of guidance set in the 125 bps area over Treasuries after having tightened from talk set in the 125 bps to 130 bps range over Treasuries.

A second tranche was $350 million of 4.45% series W notes due 2045, which sold at 99.277 to yield 4.494%, or Treasuries plus 150 bps.

Guidance was set in the area of 155 bps over Treasuries. The notes were initially talked in the range of 155 bps to 160 bps over Treasuries.

Goldman Sachs & Co., U.S. Bancorp Investments Inc., Wells Fargo Securities, BNY Mellon Capital Markets LLC, KeyBanc Capital Markets and MUFG are the joint bookrunners.

Proceeds from the sale will be used for general corporate purposes relating to the company’s utility business, including the repayment of the company’s $300 million 3.4% senior notes, series S, due May 24, 2015 and the redemption of its $350 million 7.95% senior notes, series R, due Jan. 15, 2020.

The utility is based in Columbus, Ohio.

Puget mortgage bonds

In other primary happenings, Puget Sound Energy priced $425 million of 4.3% 30-year first mortgage bonds at Treasuries plus 130 bps on Monday, a market source said.

The notes (A2/A-/) sold at the tight end of guidance.

Proceeds will be used to redeem the company’s $150 million 5.197% senior secured notes due Oct. 1, 2015, which have an interest rate of 5.197%, and $250 million 6.75% senior secured notes due Jan. 15, 2016.

Puget Sound Energy is a Bellevue, Wash.-based electric utility company.

Paccar prices tight

Paccar Financial priced on Monday a $300 million issue of medium-term notes, series N, (A1/A+) with a spread of Treasuries plus 47 bps, according to a market source and an FWP filed with the SEC.

Pricing was at the tight end of the Treasuries plus 50 bps area guidance.

The notes sold at 99.868 to yield 1.445%.

The Bellevue, Wash.-based financing arm of Paccar Inc. plans to use the proceeds for general corporate purposes.

NRW, OeKB eye deals

NRW and Oesterreichische Kontrollbank are planning to head to the primary market with new offerings.

NRW Bank is planning to price a $1 billion offering of notes due 2018, according to a market source, and set price talk in the mid-swaps plus 6 bps area.

Bookrunners for the Regulation S deal are BofA Merrill Lynch, Deutsche Bank Securities Inc., JPMorgan and RBS Securities Inc.

The bank is based in Dusseldorf, Germany.

Oesterreichische Kontrollbank set price talk for a benchmark offering of two-year notes on Monday, a market source said.

The notes (Aaa/AA+/) are talked in the mid-swaps minus 2 bps area.

Citigroup and HSBC are the bookrunners.

The export and financial services company for Austrian businesses is based in Vienna.

Shell firms

Shell International Finance’s 3.25% notes due 2025 firmed to 94 bps bid, 93 bps offered, a trader said late afternoon on Monday.

The company sold $2.75 billion of the notes (A1/AA/) on Wednesday at Treasuries plus 105 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

Apple tightens

Apple’s 3.2% notes due 2025 traded in the 73 bps bid, 72 bps offered area over the day, a trader said.

The company sold $2 billion of the 10-year notes (Aa1/AA+/) at Treasuries plus 100 bps on Wednesday.

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

Goldman Sachs softens

Goldman Sachs’ 3.5% notes due 2025 eased 5 bps from Friday to 145 bps bid, a market source said.

The company sold an $800 million add-on to the notes (Baa1/A-/A) on March 25 at a spread of Treasuries plus 145 bps.

Goldman originally priced $1.7 billion of the notes on Jan. 20 at Treasuries plus 170 bps.

The financial services company is based in New York City.

Wells Fargo eases

Well’s Fargo’s 2.15% notes due 2020 widened 4 bps on Monday to 72 bps bid in late-afternoon trading, according to a source.

Wells Fargo sold $2 billion of the notes (A2/A+/AA-) on Jan. 26 at Treasuries plus 85 bps.

The bank is based in San Francisco.

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