Morning Commentary: Philip Morris, E*Trade, VMware are offering fixed-rate notes

By Devika Patel

Knoxville, Tenn., Aug. 14 – Primary activity in the investment-grade bond market on Monday brought several new deals to market.

Among them is Palo Alto, Calif., virtualization solutions provider VMware, Inc., which announced a three-part offering of fixed-rate senior notes. Also, Philip Morris International Inc. – the New York producer of cigarette and tobacco products – reported an offering fixed-rate notes in two parts.

Meanwhile, New York online brokerage firm E*Trade Financial Corp. is in the market with a two-tranche offering of fixed-rate senior notes, and Lear Corp., the Southfield, Mich.-based manufacturer and distributor of automotive seating and electrical systems, announced an offering of fixed-rate senior notes due 2027.

Separately, McLean, Va., digital information technology services and solutions provider DXC Technology Co. is marketing floating-rate senior notes due 2021.

VMware offers notes

VMware plans a three-part offering of fixed-rate senior notes, which will have make-whole calls and then par calls.

BofA Merrill Lynch and J.P. Morgan Securities LLC are the bookrunners.

Proceeds will be used to fund a $1 billion share repurchase program through Aug. 31, 2018, to repay in full two promissory notes with a combined principal of $1.23 billion and for general corporate purposes.

Philip Morris to price

Philip Morris intends to offer fixed-rate notes in two tranches, which will have make-whole calls and par calls.

Goldman Sachs & Co., HSBC Securities (USA) Inc., JPMorgan, Mizuho Securities USA Inc. and Societe Generale CIB are the bookrunners.

Proceeds will be used for general corporate purposes, to refinance debt, to meet working capital requirements or to repurchase common stock.

E*Trade selling notes

E*Trade intends to offer fixed-rate senior notes in two parts due 2022 and 2027.

The notes will have make-whole calls until one month prior to maturity for the 2022 notes and three months prior to maturity for the 2027 notes and par calls after those dates.

Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, JPMorgan and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to help redeem all of the company’s $540 million of 5.375% senior notes due 2022 and all of its $460 million of 4.625% senior notes due 2023.

Lear to sell 10-year notes

Lear intends to offer fixed-rate senior notes due 2027, which will feature a make-whole call and then a par call.

Bookrunners are BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., HSBC and JPMorgan.

Proceeds will be used to redeem the company’s $500 million of 4.75% senior notes due 2023 at par plus interest and a make-whole premium, to repay debt under its revolving credit facility and for general corporate purposes.

DXC selling floaters

DXC plans to price floating-rate senior notes due 2021, which will bear interest at a rate based upon Libor. They are non-callable for the first year and then callable at par.

BofA Merrill Lynch is the active bookrunner. Citigroup, Lloyds Securities, Mizuho Securities USA Inc., MUFG and RBC Capital Markets Corp. are also bookrunners.

Proceeds will be used for general corporate purposes, including debt repayment.

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