Wal-Mart Stores brings $5 billion; Export Development Canada prices $1 billion; volume drops

By Sheri Kasprzak and Cristal Cody

New York, April 11 - Primary action kicked off the week on a lively note with a few billion-dollar offerings coming down the pipeline.

Wal-Mart Stores Inc. led the activity with its $5 billion sale of notes (Aa2/AA/AA).

The deal includes $1 billion of three-year notes, $1 billion of five-year notes, $1 billion of 10-year notes and $2 billion of 30-year notes, said a term sheet filed Monday with the Securities and Exchange Commission.

Export Development Canada came to market with $1 billion of U.S. dollar bonds, said a term sheet filed with the SEC. The 1.5% bonds (Aaa/AAA/AAA) are due May 15, 2014 and are priced at 99.838 to yield 1.554%. The spread came in at Treasuries plus 24.1 bps.

The Wal-Mart notes were active in the gray markets and in secondary trading, informed sources said.

The notes due 2014 traded at 37 bps bid, 32 bps offered, one trader said. The tranche of notes due 2016 was tighter at 55 bps bid, 50 bps offered while the notes due 2021 firmed to 74 bps bid, 71 bps offered. The bonds due 2041 were stronger at 105 bps bid, 102 bps offered.

Trade volume was "very light" on Monday, one trader noted.

According to a market source, overall investment-grade Trace volume dropped 20% to less than $10 billion on Monday.

The Markit CDX Series 14 North American investment-grade index was flat a second market day on Monday at a spread of 94 bps, according to Markit Group Ltd.

Treasuries finished Monday flat to slightly weaker ahead of the government's auctions of $66 billion of debt this week. The 10-year note yield was flat at 3.58% and the 30-year bond yield rose 1 bp to 4.65%.

"We have been a little bit upside and downside of unchanged all day long," said Mary Ann Hurley, a fixed-income trader for D.A. Davidson & Co.

The Treasury Department will auction $32 billion of three-year notes on Tuesday, $21 billion in a reopening of notes due 2021 on Wednesday and $13 billion in a reopening of bonds due 2041 on Thursday.

Wal-Mart details tranches

The Bentonville, Ark.-based retailer's three-year notes are due April 15, 2014 and have a 1.625% coupon priced at 99.73 to yield 1.718% with a spread of Treasuries plus 40 bps.

The five-year notes are due April 15, 2016 and have a 2.8% coupon priced at 99.631 to yield 2.88% with a spread of Treasuries plus 57 bps, and the 10-year notes are due April 15, 2021 and have a 4.25% coupon priced at 99.349 to yield 4.331% with a spread of Treasuries plus 75 bps.

Finally, the 30-year notes are due April 15, 2041 and have a 5.625% coupon priced at 98.084 to yield 5.76% with a spread of Treasuries plus 110 bps.

Citigroup Global Markets Inc.; Goldman, Sachs & Co.; J.P. Morgan Securities LLC; Merrill Lynch, Pierce, Fenner & Smith Inc.; RBS Securities Inc.; and Wells Fargo Securities LLC were the joint bookrunners for the sale.

Proceeds will be used for general corporate purposes.

Export Development bonds

Export Development Canada's bonds via Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC and TD Securities (USA) LLC are not callable.

Proceeds will be used for general corporate purposes.

No secondary activity was immediately seen, a trader said.

Based in Ottawa, Ontario, Export Development Canada offers loans, guarantees, insurance and other agreements necessary to encourage international trade so that Canadian exports may be financed on competitive terms with those in the international markets.

Entergy talked at 6%-6.125%

Looking at upcoming offerings, Entergy Mississippi, Inc. is expected to price $100 million of first-mortgage bonds, said a form 424B3 filed Monday with the SEC.

The bonds (Baa1/A-/) are due May 1, 2051.

Price talk on the bonds Monday ranged from 6% to 6.125%.

Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC are the senior bookrunners for the sale.

The company intends to use the proceeds to repay $80 million of 4.65% debt due in May 2011 and redeem up to $75 million of 6% debt due in 2032. The remainder will be used for general corporate purposes.

Based in Jackson, Entergy Mississippi is a public utility owned and operated by Entergy Corp.

© 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.