Canadian Pacific, Hexcel, EDC do deals; telecom bonds mixed; Cytec little changed

By Aleesia Forni and Cristal Cody

Virginia Beach, July 29 – Canadian Pacific Railway Co., Hexcel Corp. and Export Development Canada priced deals on an unsurprisingly quiet Wednesday as the Federal Reserve wrapped up its two-day Federal Open Market Committee meeting.

In its statement, the Fed said that it would need to see “some further improvement” in the job market before raising interest rates.

The slower pace follows Tuesday’s blockbuster session that saw investment-grade issuers raise nearly $13 billion, and brings the week’s total supply to roughly $16.4 billion.

In primary happenings on Wednesday, Canadian Pacific sold an $800 million two-part new issue, with the tranches selling between 15 basis points to 17.5 bps tight of initial price thoughts.

Hexcel sold $300 million of 10-year notes at the tight end of guidance.

Meantime, Export Development Canada sold $500 million of long two-year notes during the session.

AT&T Inc.’s notes (/BBB+/A-) improved about 3 bps to 4 bps in secondary trading over the session.

Verizon Communications Inc.’s 3.5% notes due 2024 traded 2 bps wider.

Cytec Industries Inc.’s senior notes saw little trading after the company announced it will be acquired by Solvay SA for $75.25 per share in cash in a deal valued at $5.5 billion.

The Markit CDX North American Investment Grade index closed 1 bp tighter at a spread of 70 bps.

Canadian Pacific two-parter

Canadian Pacific Railway priced $800 million of senior notes (Baa1/BBB+) in two tranches on Wednesday, according to a market source.

The company sold $250 million of 3.7% 10-year notes at Treasuries plus 145 bps. The issue sold at 99.647 to yield 3.713%.

The notes were guided in the 150 bps area over Treasuries and initially talked in the area of 162.5 bps over Treasuries.

A $550 million 4.8% 30-year bond priced at 99.622 to yield 4.824%, or Treasuries plus 180 bps.

Pricing was at the tight end of the 185 bps area guidance following talk in the area of Treasuries plus 195 bps.

The bookrunners are BofA Merrill Lynch, Citigroup Global Markets Inc., RBC Capital Markets LLC and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes.

The railroad operator is based in Calgary, Alta.

Hexcel prices tight

Also on Wednesday, Hexcel priced $300 million of 4.7% 10-year senior notes (Baa3/BBB-) at the tight end of guidance with a spread of Treasuries plus 245 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.713 to yield 4.736%.

The notes were talked in the 250 bps area over Treasuries.

BofA Merrill Lynch and Goldman Sachs & Co. are the bookrunners.

Proceeds will be used to reduce amounts outstanding under the company’s revolving credit facility and for general corporate purposes.

Hexcel is a composites company based in Stamford, Conn.

EDC new issue

Export Development Canada priced $500 million of 0.875% notes (Aaa/AAA) due Nov. 10, 2017 on Wednesday at mid-swaps minus 8 bps, according to a market source.

BNP Paribas Securities Corp. and Goldman Sachs are the joint bookrunners.

The government-backed agency for exporters is based in Ottawa.

AT&T stronger

AT&T’s 3.4% notes due 2025 tightened 4 bps in Wednesday’s secondary trading to 170 bps bid, a market source said.

The company sold $5 billion of the notes on April 23 at a spread of Treasuries plus 150 bps.

AT&T’s 4.75% bonds due 2046 firmed 3 bps to 228 bps bid in trading.

AT&T sold $3.5 billion of the bonds in the April 23 offering at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Verizon eases

Verizon’s 3.5% notes due 2024 headed out 2 bps weaker at 156 bps bid, according to a market source.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at Treasuries plus 135 bps.

The telecommunications company is based in New York City.

Cytec steady

Cytec’s 3.95% notes due 2025 rose to 97.45 to yield 4.272% over the day, according to a market source. The last trade seen in the bonds was on July 10 when the bonds traded at 96.918 to yield 4.339%.

The company sold $250 million of the notes on Nov. 5, 2014 at 99.959 to yield 3.955%.

Cytec Industries’ 3.5% notes due 2023 were unchanged at 96.02 to yield 4.108%, the source said. The notes have seen few trades over the month.

The company sold $400 million of the notes on Feb. 26, 2013 at 99.303 to yield 3.583%.

Cytec Industries’ 8.95% notes due 2017 were unchanged on Wednesday but better on the week at 112.811 to yield 2.103% in secondary trading, according to the market source.

Cytec sold $250 million of the notes on June 30, 2009 at 99.722 to yield 9%. The company had $82,286,000 of the notes outstanding as of Dec. 5.

Cytec is a Woodland Park, N.J.-based specialty materials and chemicals company.

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