Comcast sells $4.5 billion bonds; Treasuries attract Federal Realty to deal; Comcast mixed

By Cristal Cody

Eureka Springs, Ark., July 12 – Comcast Corp. tapped the investment-grade market on Tuesday with a $4.5 billion offering of notes (A3/A-/A-) in four tranches.

In other market activity, Federal Realty Investment Trust announced it closed on its $250 million sale on Thursday of 3.625% 30-year senior notes.

“While we did not anticipate accessing the long-term unsecured debt markets until late in 2016 or early 2017, the recent unprecedented strength in the U.S. Treasury market and the attractiveness of our credit caused us to opportunistically issue this very long-term capital, on highly compelling financial terms, at this time,” Donald C. Wood, Federal Realty's president and chief executive officer, said in the release.

The notes (A3/A-/) priced at 97.756 to yield 3.75% and a spread of 160 basis points over Treasuries.

“Although this transaction will be modestly dilutive to our earnings for the balance of 2016 (as we had been using our line of credit for operational funding purposes), the 2016 and 2017 spending requirements of our growing real estate platform will now be appropriately funded for the long term,” Wood said.

Federal Realty intends to use the proceeds to pay down its revolving credit facility and for general corporate purposes.

Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and U.S. Bancorp Investments Inc. were the bookrunners for the deal.

Federal Realty Investment Trust is a Rockville, Md.-real estate investment trust that owns and operates retail-based properties mostly located in major coastal markets in the United States.

The Markit CDX North American Investment Grade index ended the day 1 bp tighter at a spread of 71 bps.

In the secondary market, Comcast’s existing bonds traded flat to wider.

Stifel Financial Corp.’s 4.25% senior notes due 2024 reopened on Monday were wrapped around issuance in earlier secondary trading.

Raymond James Financial, Inc.’s 3.625% senior notes due 2026 improved 4 bps from where the bonds traded on Monday.

Comcast prices $4.5 billion

Comcast priced $4.5 billion of notes in four parts in its deal, according to an FWP filing with the Securities and Exchange Commission.

The company sold $700 million of 1.625% notes due Jan. 15, 2022 at 99.901 to yield 1.644%, or a spread of 55 bps over Treasuries.

Comcast priced $1.4 billion of 2.35% notes due Jan. 15, 2027 at 99.88 to yield 2.363%, or Treasuries plus 85 bps.

The $1 billion tranche of 3.2% notes due July 15, 2036 priced at 99.313 to yield 3.247%. The notes came with a spread of 100 bps over Treasuries.

In the final tranche, Comcast sold $1.4 billion of 3.4% notes due July 15, 2046 at 99.126 to yield 3.447%, or a 120 bps spread over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Barclays, Goldman Sachs & Co. and SMBC Nikko Securities America, Inc. were the bookrunners.

Proceeds will be used to fund Comcast’s $3.8 billion acquisition of DreamWorks Animation SKG, Inc. and for working capital and general corporate purposes.

Comcast is a media and technology company based in Philadelphia.

Comcast mixed

Comcast’s 3.15% notes due 2026 were unchanged on the day at 79 bps bid, a market source said.

The notes were sold in a $350 million reopening on March 22 at Treasuries plus 90 bps.

The bonds originally priced in a $1.5 billion tranche on Feb. 16 at Treasuries plus 140 bps.

Comcast’s 4.6% bonds due 2045 headed out about 9 bps weaker at 138 bps bid on Tuesday.

The company sold $1.7 billion of the bonds on May 19, 2015 at 150 bps over Treasuries.

Stifel unchanged

Stifel Financial’s 4.25% notes due 2024 traded flat at 260 bps area early on Tuesday, a market source said.

The company priced a $200 million add-on to the notes (/BBB-/BBB-) on Monday at a spread of 260 bps over Treasuries.

The company originally sold $300 million of the notes on July 15, 2014 at 180 bps over Treasuries.

Stifel is a St. Louis-based financial holding company for banking, securities and financial services businesses, including Stifel, Nicolaus & Co., Inc.

Raymond James firms

Raymond James’ 3.625% senior notes due 2026 were quoted 205 bps offered in secondary trading earlier in the day, tighter than where the notes traded at 209 bps offered on Monday, according to a market source.

Raymond James sold $500 million of the notes (Baa2/BBB/) on Thursday at a spread of 225 bps over Treasuries.

The financial services company is based in St. Petersburg, Fla.

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