Fortis, Viacom, DTE Energy price bonds; credit spreads widen; HSBC tightens; Shire softens

By Cristal Cody

Eureka Springs, Ark., Sept. 29 – Fortis Inc., Viacom Inc. and DTE Energy Co. tapped the high-grade primary market on Thursday to price more than $4 billion of bonds.

Canadian energy company Fortis sold $2 billion of notes in two tranches.

Viacom came with a $1.3 billion two-part sale of senior notes.

DTE Energy raised $1 billion in a two-part offering of senior notes.

The Markit CDX North American Investment Grade index widened about 3 basis points over the day to close at a spread of 78 bps.

High-grade bonds were mixed in the secondary market earlier in the session.

HSBC Holdings plc’s 2.65% notes due 2022 sold on Wednesday tightened about 4 bps.

Shire Acquisitions Investments Ireland DAC’s 2.4% notes due 2021 traded softer than issuance.

Fortis prices $2 billion

Fortis sold $2 billion of notes (Baa3/BBB+) in two parts on Thursday, according to a market source.

The company priced $500 million of 2.1% five-year notes at 105 bps over Treasuries.

Fortis sold $1.5 billion of 3.055% 10-year notes at a spread of 150 bps over Treasuries.

The tranches priced on the tight side of talk.

Goldman Sachs & Co., MUFG, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC were the lead managers.

Proceeds will be used to fund part of the cash consideration for the company’s planned acquisition of ITC Holdings Corp.

Fortis is a St. John’s, Newfoundland and Labrador-based investor-owned gas and electric distributor.

Viacom sells $1.3 billion

Viacom priced $1.3 billion of senior notes (Baa3/BBB-/BBB) in two tranches on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $400 million of 2.25% notes due Feb. 4, 2022 at 99.692 to yield 2.312%. The notes priced with a spread of Treasuries plus 120 bps.

Viacom priced $900 million of 3.45% 10-year notes at 99.481 to yield 3.512%, or Treasuries plus 195 bps.

The notes priced on the tight side of guidance.

Citigroup Global Markets Inc., BofA Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to repay debt, including the company’s $400 million of 2.5% senior notes due December 2016, $500 million of 3.5% senior notes due April 2017 and borrowings under its commercial paper program, as well as for general corporate purposes.

The issuer held a roadshow for the offering on Tuesday and Wednesday.

Viacom is a New York City-based diversified media company with interests focused in cinema and cable television.

DTE Energy raises $1 billion

DTE Energy sold $1 billion of senior notes (A3/BBB/BBB+) in two tranches on Thursday, according to an FWP filing with the SEC.

The company sold $400 million of series D 1.5% three-year notes at 99.875 to yield 1.543%, or 70 bps over Treasuries.

DTE Energy priced $600 million of series E 2.85% 10-year notes at 99.897 to yield 2.862%. The notes priced with a spread of 130 bps over Treasuries.

Both tranches priced on the tightest side of guidance.

Wells Fargo, BNY Mellon Capital Markets LLC and MUFG were the bookrunners for the three-year notes.

Wells Fargo, Barclays, BofA Merrill Lynch, Scotia Capital (USA) Inc., Citigroup and J.P. Morgan Securities LLC were the bookrunners for the 10-year notes.

Proceeds from the three-year notes will be used to repay short-term debt, and proceeds from the 10-year notes will be used to help fund the purchase of midstream natural gas assets in the Appalachia Basin.

DTE is a Detroit-based diversified energy company.

HSBC improves

HSBC Holdings’ 2.65% notes due 2022 traded better at 151 bps bid earlier in the secondary market, a source said.

The company sold $2.5 billion of the notes (A1/A/AA-) on Wednesday at a spread of Treasuries plus 155 bps.

The banking and financial services group is based in London.

Shire eases

Shire’s 2.4% notes due 2021 were seen about 1 bp softer at 123 bps offered earlier Thursday in the secondary market, a source said.

The company sold the five-year notes in a $3.3 billion tranche on Sept. 19 at Treasuries plus 120 bps.

The notes are fully and unconditionally guaranteed by parent company Shire plc.

Shire is a global biotechnology company based in Dublin.

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