Charter, Hewlett-Packard, Archer-Daniels, General Dynamics price; deal pipeline grows

By Cristal Cody

Tupelo, Miss., Sept. 11 – High-grade bond issuance was heavy over Monday’s session.

Credit Suisse Group AG sold $1.5 billion of notes in two parts.

Charter Communications, Inc. subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. priced $2 billion of senior secured notes in two tranches.

Hewlett Packard Enterprise Co. sold $1.1 billion of two-year fixed-rate notes and dropped a floating-rate tranche.

General Dynamics Corp. tapped the primary market with a $1 billion two-part offering of senior notes. Virginia Electric and Power Co. brought $750 million of new and reopened senior notes.

Brookfield Finance Inc. upsized its deal and sold $550 million of 30-year guaranteed senior notes.

Also on Monday, Archer-Daniels-Midland Co. placed $500 million of 30-year senior notes.

Mitsubishi UFJ Lease & Finance Co. Ltd. priced $500 million of five-year senior notes.

PECO Energy Co. sold $325 million of 30-year first and refunding mortgage bonds.

Textron Inc. came with $300 million of long 10-year senior notes.

Issuance is expected to remain strong on Tuesday with several deals in the pipeline.

Ontario Teachers’ Finance Trust intends to price a dollar-denominated benchmark-sized offering of notes.

Dexia Credit Local SA plans to price a dollar-denominated Rule 144A and Regulation S offering of senior notes due Sept. 20, 2022.

The Republic of Finland is marketing $1 billion of notes due Sept. 21, 2020.

Also on the deal horizon, Westpac Banking Corp., acting through its New Zealand branch, is holding a global roadshow that started on Friday for a dollar-denominated offering of fixed-rate resetting perpetual subordinated contingent convertible securities.

In addition, Syngenta AG and the Goodman Group kicked off roadshows on Monday for multi-tranche deals.

Market sources expect about $30 billion to $35 billion of supply for the week.

The Markit CDX North American Investment Grade 28 index closed about 3 basis points tighter at a spread of 57 bps.

Charter prices $2 billion

Charter Communications Operating and Charter Communications Operating Capital priced $2 billion of senior secured notes (Ba1/BBB-/BBB-) in a two-part offering on Monday, according to a source and a company press release.

The company sold $1.25 billion of new notes due March 15, 2028 at 99.757 and a spread of 210 bps over Treasuries. The notes were talked to price in the 215 bps area.

The company also priced a $750 million add-on to its 5.375% senior secured notes due May 1, 2047 at 98.969 and a Treasuries plus 270 bps spread, on the tight side of spread guidance in the 275 bps area.

The company originally sold $1.25 billion of the 30-year notes at 99.968 to yield 5.377%, or a 235 bps spread to Treasuries, on March 30. The total outstanding now is $2 billion.

The active bookrunners were BofA Merrill Lynch and Citigroup Global Markets Inc. Passives were Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes, including potential buybacks of class A common stock or common units.

Charter is a Stamford, Conn.-based broadband communications company.

Credit Suisse sells fixed, floaters

Credit Suisse Group sold $1.5 billion of senior notes due Dec. 14, 2023 (Baa2/BBB+/A) in fixed- and floating-rate traches on Monday, according to a market source.

The company priced $500 million of the floaters at Libor plus 120 bps.

The $1 billion tranche of 2.997% fixed-rate notes priced with a spread of Treasuries plus 130 bps.

Credit Suisse Securities (USA) LLC was the bookrunner.

The financial services company is based in Zurich.

Hewlett Packard prices

Hewlett Packard Enterprise priced $1.1 billion of 2.1% two-year senior notes (Baa2/BBB/BBB+) in a Rule 144A and Regulation S dollar-denominated offering on Monday at a spread of 78 bps over Treasuries, according to a market source.

The notes were talked to price in the 80 bps area.

The company dropped an initial planned two-year floating-rate tranche from the final deal.

BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the bookrunners.

The company on Friday held fixed income investor calls for the offering.

The Palo Alto, Calif., technology company intends to use the proceeds to repay $750 million of its 2.45% notes due 2017, to repay $350 million of its floating-rate notes due 2017 and for general corporate purposes.

General Dynamics prints

General Dynamics priced a $1 billion two-part offering of senior notes (A2/A+) on Monday, according to an FWP filed with the Securities and Exchange Commission.

The company sold $500 million of 2.375% seven-year notes at 99.20 to yield 2.497% and a spread of Treasuries plus 55 bps.

The $500 million tranche of 2.625% 10-year notes priced at 97.831 to yield 2.872% and with a spread of 75 bps over Treasuries.

J.P. Morgan Securities LLC, BofA Merrill Lynch and BBVA Securities Inc. were the bookrunners.

The notes will be guaranteed by American Overseas Marine Co., LLC; Bath Iron Works Corp.; Electric Boat Corp.; General Dynamics Government Systems Corp.; General Dynamics Land Systems Inc.; General Dynamics Ordnance and Tactical Systems, Inc.; General Dynamics-OTS, Inc.; Gulfstream Aerospace Corp. and National Steel and Shipbuilding Co.

Proceeds will be used to repay the company's $900 million 1% notes due 2017 upon maturity and for general corporate purposes.

Falls Church, Va.-based General Dynamics is an aerospace and defense company.

Virginia Electric sells new, add-on

Virginia Electric and Power sold $750 million of senior notes (A2/BBB+/A) in two tranches on Monday, including a reopening, according to an FWP filing with the SEC.

In the add-on, Virginia Electric sold $200 million of 2.75% series C notes due March 15, 2023 at 101.735 to yield 2.397%, or a spread of Treasuries plus 70 bps.

The company originally sold $500 million of the series C notes on March 14, 2013 at 99.688 to yield 2.786%, or Treasuries plus 73 bps. The total outstanding now is $700 million.

The company priced $550 million of new series B notes due Sept. 15, 2047 at 99.556 to yield 3.825% and a spread of Treasuries plus 110 bps.

RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used for general corporate purposes and to repay short-term debt.

The electric utility is based in Richmond, Va.

Brookfield taps primary

Brookfield Finance priced an upsized $550 million of 30-year guaranteed senior notes at a spread of 200 bps over Treasuries on Monday, according to an FWP filing with the SEC.

The notes (Baa2/A-/DBRS: A) priced at 99.219 to yield 4.749%.

The deal was upsized from an initial $500 million offering.

Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. were the bookrunners.

Proceeds will be used for general corporate purposes.

The notes will be guaranteed by parent company Brookfield Asset Management Inc., a Toronto-based alternative asset manager with about $250 billion in assets under management.

Archer-Daniels-Midland prices

Archer-Daniels-Midland priced $500 million of 3.75% 30-year senior notes (A2/A/A) on Monday at 99.535 to yield 3.776% and a spread of Treasuries plus 105 bps, according to an FWP filed with the SEC.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays and BofA Merrill Lynch were the bookrunners.

Proceeds will be used for general corporate purposes, including repaying commercial paper.

The Chicago-based company processes agricultural commodities and manufactures food and feed ingredients.

Mitsubishi UFJ sells notes

Mitsubishi UFJ Lease & Finance (A3/A/) priced $500 million of 2.652% five-year senior notes on Monday at a spread of Treasuries plus 95 bps, according to a market source.

The notes were talked to price with a spread in the 100 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners for the Rule 144A and Regulation S deal.

The company held a roadshow for the offering in the previous week.

The Tokyo-based company and subsidiaries provide leasing and asset finance services.

PECO sells bonds

PECO Energy sold $325 million of 3.7% 30-year first and refunding mortgage bonds on Monday at a spread of 98 bps, according to an FWP filing with the SEC.

The bonds (Aa3/A-/A) priced at 99.623 to yield 3.721%.

The bookrunners were BNP Paribas Securities Corp. and MUFG.

Proceeds will be used for general corporate purposes.

The electric and natural gas transmission subsidiary of Exelon is based in Philadelphia.

Textron prices $300 million

Textron sold $300 million of 3.375% senior notes due March 1, 2028 on Monday at 99.966 to yield 3.379%, according to an FWP filing with the SEC.

The notes (Baa2/BBB/) priced with a Treasuries plus 125 bps spread.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used to make a voluntary contribution to Textron’s pension plans.

The Providence, R.I.-based multi-industry company operates global aircraft, defense, industrial and finance units.

© 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.