Bank of America, Micron, Apollo Management, Essex price notes; Verizon, Altria eye primary

By Cristal Cody

Tupelo, Miss., Feb. 4 – Monday’s session hosted high-grade issuers including Bank of America Corp. and Micron Technology, Inc. in the primary market.

Bank of America sold $3 billion of 11-year fixed-to-floating rate notes.

Micron Technology priced $1.8 billion of split-rated fixed-rate senior notes in three tranches.

Also on Monday, Apollo Management Holdings LP brought $550 million of 10-year guaranteed senior notes to the market.

In addition, Essex Portfolio, LP sold $350 million of 10-year guaranteed senior notes.

In other activity, Verizon Communications Inc. held fixed-income investor calls for a dollar-denominated offering of green bonds.

BofA Merrill Lynch and Goldman Sachs & Co. LLC are the arrangers.

Market sources also are eying a potentially hefty bond deal from Altria Group Inc. that includes euro-denominated bonds and may include dollar-denominated notes.

The company held fixed-income investor calls on Monday via Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Mizuho Securities USA Inc.

About $15 billion to $20 billion of high-grade supply is projected for the week, sources said.

Foreign purchases of U.S. bonds is expected to be softer on the week with the Chinese markets mostly closed for the week due to the Lunar New Year celebrations.

Investment-grade issuers priced more than $17 billion of bonds in the previous week.

For February, syndicate sources on average predict about $85 billion to $90 billion of overall high-grade issuance.

However, some market overserves are forecasting much higher issuance for the month in the $110 billion to $120 billion range.

February “will be much busier than usual as the backlog of non-financial issuance delayed by the December volatilities finally hit our market after exiting earning-related blackouts,” according to a BofA Merrill Lynch research note released on Monday. “Recall that in December we only got $9.1 [billion] of supply – about $36 [billion] below the $45 [billion] seasonal run-rate for that month, due to recession fears induced selloffs in the market.”

Then, January’s volume was about $10 billion below the $127 billion seasonal run-rate for the month, “leaving us quite behind in the pipeline,” the note said.

The Markit CDX North American Investment Grade 31 index closed the day more than 1 basis point tighter at a spread of 66 bps. The index tightened about 6 bps last week after the Federal Reserve left rates unchanged.

BofA sells $3 billion

Bank of America (A3/A-/A+) priced $3 billion of 3.974% fixed-to-floating rate notes due Feb. 7, 2030 on Monday at a spread of Treasuries plus 125 bps, according to a market source.

The notes will reset to a rate of Libor plus 121 bps after the initial fixed-rate period.

Initial price talk on the notes was in the Treasuries plus 140 bps area.

BofA Merrill Lynch was the bookrunner.

The financial services company is based in Charlotte, N.C.

Micron sells split-rated notes

Micron Technology sold $1.8 billion of split-rated fixed-rate senior notes (Baa3/BB+/BBB-) in three tranches on Monday, according to a market source.

A $600 million tranche of 4.64% five-year notes printed at a spread of 210 bps over Treasuries.

The company sold $500 million of 4.975% notes due Feb. 6, 2026 at a Treasuries plus 235 bps spread.

The final $700 million tranche of 5.327% 10-year notes priced with a 260 bps over Treasuries spread.

The notes all priced on the tight side of guidance and better than initial talk.

Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and Credit Suisse Securities (USA) LLC were the bookrunners.

Micron is a Boise, Idaho-based semiconductor company.

Apollo Management prices

Apollo Management Holdings sold $550 million of 4.872% 10-year guaranteed senior notes (/A/A) on Monday at 99.999 and a spread of 215 basis points over Treasuries, according to a market source and an 8-K filing with the Securities and Exchange Commission.

The notes were initially talked to price in the Treasuries plus 225 bps area with guidance later tightened to the 220 bps area, plus or minus 5 bps.

BofA Merrill Lynch and Citigroup Global Markets were the bookrunners of the Rule 144A and Regulation S offering.

Apollo Management is a subsidiary of New York City-based asset manager Apollo Global Management LLC.

Essex sells 10-year notes

Essex Portfolio sold $350 million of 4% 10-year guaranteed senior notes on Monday at a spread of Treasuries plus 137.5 bps, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/BBB+) priced at 99.188 to yield 4.099%.

Wells Fargo Securities LLC, Citigroup Global Markets, J.P. Morgan Securities, U.S. Bancorp Investments Inc., Jefferies LLC and MUFG were the bookrunners.

Palo Alto, Calif.-based Essex Portfolio is a real estate investment trust.

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