Anheuser-Busch InBev, Wal-Mart, Brambles price deals late; new issues mixed in secondary

By Andrea Heisinger and Cristal Cody

New York, March 24 - Anheuser-Busch InBev Worldwide Inc., Wal-Mart Stores Inc. and Brambles USA Inc. priced bonds in the investment-grade market late in the day Wednesday.

Nearly all of the day's deals were done around 5 p.m. ET.

Anheuser-Busch InBev had the largest sale of the day, doing $3.25 billion in four tranches. It was originally planned in three tranches, with floating-rate notes added.

Wal-Mart Stores sold a nearly as-impressive $2 billion in two tranches. The deal was in five-year notes and 30-year bonds, with more in the longer bond.

Pallet and container manufacturer Brambles USA priced an upsized $750 million in two tranches. The deal was initially a $500 million offering of 10-year notes, but a $250 million tranche of five-year notes was added.

JPMorgan Chase Capital XXIX announced it will sell 30-year capital securities. A source said the sale is expected Thursday or Friday.

There are likely more bond offerings waiting in the wings for the week, sources said, although no one contacted Wednesday knew exactly what would price or when.

The JPMorgan offering is the only one that has been formally announced. One source said that many of the larger deals for the week have "probably already been done."

Treasuries weaken

While the primary continued to offer up something new for secondary investment-grade trading on Wednesday, Treasuries hit the skids, according to sources.

The yield on the benchmark 10-year Treasury note eased 17 bps to 3.85% on Wednesday. In addition, the yield on the 30-year bond was weaker by 13 bps at 4.73%.

"Treasuries are just getting hammered today," one source said. "Especially with Treasuries being down, I don't know if that's going to slow things down or force people to get in before the rates go higher."

Meanwhile, the CDX Series 14 North American high-grade index was seen Wednesday at a mid bid-ask spread level of 88 bps, according to a source.

"Looks like it closed a bp wider," a source said.

Elsewhere, overall Trace volume rose about 6% to $14.4 billion on Wednesday, according to a source.

"There was a good flow," one trader said.

New-issue trading mixed

In secondary trading, Wal-Mart's new notes firmed only slightly, while the offering from Anheuser-Busch InBev was mixed, according to sources.

"The secondary market was just quieter because of all the new issue stuff going on," a source said.

Looking ahead, the secondary is expected to have a steady jump in new offerings from corporates.

"Not sure what's expected tomorrow but there's obviously a lot of deals coming," one source said. "Last week was heavy, too."

Anheuser-Busch InBev sells $3.25 billion

Anheuser-Busch InBev Worldwide sold a reallocated $3.25 billion of guaranteed notes (Baa2/BBB+) in four tranches late in the day, a syndicate source said.

The deal was adjusted before a size was announced to add a tranche of floating-rate notes. It is guaranteed by Anheuser-Busch InBev NV and subsidiaries.

The $1 billion of 2.5% three-year notes sold at Treasuries plus 87.5 basis points.

A $500 million tranche of three-year floating-rate notes priced at par to yield three-month Libor plus 73 bps.

A $750 million tranche of 3.75% five-year notes was sold to yield 108 bps over Treasuries.

The final tranche was $1 billion of 5% 10-year notes priced at a Treasuries plus 123 bps spread.

The notes were priced under Rule 144A.

A source said demand was "high" and that the notes priced "in line with talk."

Bookrunners were Bank of America Merrill Lynch, Barclays Capital, BNP Paribas Securities, Deutsche Bank Securities, J.P. Morgan Securities and Mizuho Securities.

The brewery is based in Leuven, Belgium.

Wal-Mart prices $2 billion

Discount retailer Wal-Mart Stores priced $2 billion of senior notes (Aa2/AA) in two tranches late in the day, a source close to the sale said.

The $750 million of 2.875% five-year notes priced at a spread of Treasuries plus 45 bps.

A $1.25 billion tranche of 5.625% 30-year bonds were sold to yield 95 bps over Treasuries.

The lateness of pricing meant that more than an hour after the deal got done, syndicate desks remained busy "trying to tie up allocations" and other loose ends, a source said.

"It really priced late in the day," he said.

Bookrunners were Citigroup Global Markets Inc., Goldman Sachs & Co. and Wells Fargo Securities.

Proceeds will be used for general corporate purposes by the Bentonville, Ark.-based retailer.

Large deals price late

There were a reasonable-sounding three deals priced for the day, but two of them were well over $1 billion and all were priced late.

Sources said that it was the number of bookrunners and logistics that slowed things down on Anheuser-Busch and Wal-Mart and not any pricing difficulties.

"You can't get much better than that," a market source said of the spreads on the Wal-Mart bonds. "There wasn't much [new issue] concession."

The Anheuser-Busch deal also appeared to do well with buyers, a source said, adding that he "heard it was received really well." The total size of the book was not available at press time.

Spreads on recent new deals may have enticed others into the market, the source said. Many have not fared as well once being freed for trading.

Brambles USA upsizes deal

An American-based unit of an Australian company, Brambles USA priced an upsized $750 million of guaranteed senior notes (Baa1/BBB+) in two tranches, a source away from the sale said.

The deal was initially announced as a tranche of 10-year notes, with five-year notes added. It is guaranteed by parent company Brambles Ltd.

The $250 million of 3.95% five-year notes sold at a spread of Treasuries plus 137.5 bps.

A $500 million tranche of 5.35% 10-year notes priced to yield 150 bps over Treasuries.

Bank of America Merrill Lynch, Barclays Capital and JPMorgan were the bookrunners.

The deal was done via Rule 144A.

The pallet and container manufacturer is based in Norcross, Ga.

JPMorgan Chase plans capital securities

JPMorgan Chase Capital XXIX announced a sale of 30-year capital securities, according to a 424B3 filing with the Securities and Exchange Commission.

Pricing is expected to take place on Thursday or Friday, a source close to the sale said.

The securities will be sold at a liquidation amount of $25 each.

The deal is guaranteed by JPMorgan Chase & Co. Proceeds are being used for general corporate purposes.

JPMorgan is the bookrunner.

The financial services company is based in New York City.

Wal-Mart firms

Wal-Mart Stores pulled some interest in its two tranches the discount retailer sold earlier in the day.

Wal-Mart's notes due 2015 firmed 1 bp to 44 bps bid in trading after the notes priced at Treasuries plus 45 bps, a source told Prospect News.

Meanwhile, Wal-Mart's bonds due 2040 that priced at Treasuries plus 95 bps firmed on the offer side to 93 bps late in the day, according to a trader.

"Looks like not that long ago there was a 94 bps bid," the trader said. "In the gray market, it looks like they were trading about the same."

Anheuser-Busch InBev mixed

Elsewhere, Anheuser-Busch InBev's new deal was mixed once it reached the secondary market, according to a source.

The offering featured $3.25 billion in four tranches, including three-year fixed-rate and three-year floating rate notes.

Little was expected to be seen in the secondary for the three-year floating-rate notes since "those get put away pretty quick," one trader said.

Meanwhile, the fixed-rate notes due 2013 priced at Treasuries plus 87.5 bps and tightened in the secondary to 86 bps bid, 84 bps offered, according to the source.

Also, Anheuser-Busch InBev's notes due 2015, which sold at Treasuries plus 108 bps, were "offered at 103 bps," the source said.

In addition, the notes due 2020 widened on the bid after they launched Wednesday at Treasuries plus 123 bps, according to the source. The notes were quoted late on Wednesday at 125 bps bid, 118 bps offered.

© 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.