GE Capital, Assurant, Carlyle sales kick off holiday week; St. Jude tightens in secondary

By Aleesia Forni and Andrea Heisinger

New York, March 25 - The week got off to a modest start Monday with General Electric Capital Corp. and Assurant, Inc. leading issuance in the investment-grade bond market.

GE Capital sold $1.4 billion of five-year notes in two parts - one with a fixed rate and the other, floating.

Assurant tapped the market for $700 million of senior notes in maturities of 2018 and 2023. A 30-year bond was scrapped from the sale, with the remaining two tranches reallocated and the total size of the trade decreased from $750 million.

Elsewhere in the primary, American Campus Communities Operating Partnership LP priced $400 million of guaranteed 10-year senior notes. The size was increased from $300 million.

Carlyle Holdings II Finance LLC sold $400 million of 30-year senior notes guaranteed by Carlyle Group LP and other indirect subsidiaries. Pricing was done under Rule 144A and Regulation S, and the size was increased from $350 million.

France's RCI Banque SA also sold bonds privately in a $600 million offering of five-year notes.

Wilton Re priced a $300 million issue of 20-year fixed-to-floating-rate notes under Rule 144A and Regulation S.

A $150 million sale of $25-par redeemable preferred stock was priced by DDR Corp. The size was increased from a minimum of $100 million.

A trader saw the paper trading at less 23 cents in the midday gray market.

Shortly before the close, the trader quoted the issue at $24.60 bid, $24.65 offered.

After the close, a market source pegged the preferreds at $24.68 bid, $24.74 offered but noted that the market was pre-pricing.

The high-grade market is expected to see between $10 billion and $15 billion of supply for the week, a drop from the previous week's haul of more than $20 billion of issuance.

The start of Passover at sundown Monday, as well as the coming bond market holiday on Friday for Good Friday, means people are on vacation and companies are less likely to price notes.

"We really don't have much happening tomorrow - should be quiet," said one market source who worked on a few of Monday's sales.

"It should actually be quiet for the rest of the week because of the holidays," he added.

The Markit CDX Series 20 North American Investment Grade index widened 1 basis point to a spread of 91 bps.

In the secondary market, St. Jude Medical Inc.'s and Westar Energy Inc.'s recent issues traded tighter on Monday, one market source said.

GE brings $1.4 billion

General Electric Capital tapped the market for $1.4 billion of five-year notes (A1/AA+/) in two parts, a market source said.

There was $400 million of five-year floating-rate notes priced at par to yield Libor plus 71 bps.

A $1 billion tranche of 1.625% five-year notes sold at a spread of Treasuries plus 90 bps. The notes were quoted at 90 bps offered near the end of the session.

The bookrunners were Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The funding arm of General Electric Co. is based in Norwalk, Conn.

American Campus prices tight

American Campus Communities Operating Partnership was in the market with an upsized $400 million sale of 3.75% 10-year senior notes (Baa3/BBB-/) priced at 187.5 bps over Treasuries, a market source said.

Initial guidance was in the Treasuries plus 205 bps area, the source said. The size was increased from $300 million.

The bookrunners were BofA Merrill Lynch, Deutsche Bank Securities Inc., JPMorgan and Wells Fargo Securities LLC.

Proceeds are being used to repay the outstanding balance of a revolving credit facility, to fund the company's current development pipeline and potential acquisitions of student housing properties and for general business purposes.

The notes are guaranteed by American Campus Communities Inc.

The real estate investment trust for student housing is based in Austin, Texas.

RCI sells five-year

RCI Banque was in the market with a $600 million sale of 3.5% five-year notes (Baa3/BBB/) sold at 275 bps over Treasuries, a source close to the trade said.

Guidance was in the 275 bps area.

The sale was done under Rule 144A and Regulation S.

The bookrunners were BofA Merrill Lynch, Citigroup, HSBC Securities (USA) Inc. and SG Americas Securities LLC.

The company specializes in automotive financing, insurance and related activities for Renault group brands globally and for Nissan group brands in Europe, Russia and South America. RCI is based in Noisy-le-Grand, France.

Carlyle's 30-year

Carlyle Group Holdings II Finance priced $400 million of 5.625% 30-year senior notes (/A-/A-) during the day's session to yield Treasuries plus 250 bps, an informed source said.

The size was increased from $350 million.

The sale was done under Rule 144A and Regulation S.

Citigroup, JPMorgan, Credit Suisse Securities (USA) LLC, Goldman Sachs and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds are being used to repay outstanding borrowings under a term loan.

The sale is guaranteed by Carlyle Group LP and indirect subsidiaries Carlyle Holdings I LP, Carlyle Holdings II LP and Carlyle Holdings III LP.

The asset management firm is based in Washington, D.C.

Assurant downsizes

Assurant priced $700 million of notes (Baa2/BBB/) in two maturities, a market source said.

The size was decreased from a planned $750 million in three parts. A 30-year bond was axed from the sale, and the remaining two tranches were reallocated in size.

A $350 million tranche of 2.96% five-year notes sold at a spread of Treasuries plus 175 bps.

There was $350 million tranche of 4.26% 10-year notes priced at a spread of 212.5 bps over Treasuries.

BofA Merrill Lynch and JPMorgan were the bookrunners.

Proceeds are being used for general corporate purposes, including repayment of $500 million of 5.63% notes due February 2014.

The specialized insurance company is based in New York.

Wilton's fixed-to-floaters

Wilton Re priced $300 million of 5.875% 20-year fixed-to-floating-rate notes (/BBB/BBB) at par to yield 5.875%, a market source said late in the day.

The notes were sold at a spread of Treasuries plus 396.4 bps.

Pricing was done via Rule 144A and Regulation S.

Citigroup, RBC Capital Markets LLC, U.S. Bancorp Investments Inc. and Wells Fargo were the bookrunners.

The life reinsurance company is based in Wilton, Conn.

DDR does preferred deal

DDR priced $150 million of 6.25% class K cumulative redeemable preferred stock, according to a news release.

Price talk on the preferreds (expected ratings: Ba1/B+/BB-) was 6.25% to 6.375%, a source said.

Citigroup, JPMorgan, RBC, UBS Securities LLC and Wells Fargo were the joint bookrunning managers.

Dividends will be paid on a quarterly basis beginning July 15.

The Beachwood, Ohio-based real estate investment trust intends to list the new preferreds on the New York Stock Exchange under the ticker symbol "DDRPK."

Proceeds will be used with cash on hand to redeem all outstanding 7.375% class H cumulative preferreds, which is expected to cost $205.5 million including accrued dividends.

St. Jude notes firm

St. Jude's $900 million tranche of 3.25% 10-year notes traded 4 bps better at 134 bps bid, 131 bps offered compared to levels seen Friday.

The notes sold on Thursday at a spread of Treasuries plus 140 bps.

The $700 million of 4.75% 30-year bonds, which sold at 165 bps over Treasuries, was quoted 3 bps better at 155 bps bid, 150 bps offered.

The maker of cardiovascular medical devices is based in St. Paul, Minn.

Westar Energy firms

In other trading, Westar Energy's notes were quoted 3 bps tighter from Friday's levels at 89 bps bid, 81 bps offered.

The company sold the $250 million of 4.1% 30-year mortgage bonds at Treasuries plus 95 bps on Thursday.

The electric utility is based in Topeka, Kan.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.