United Technologies continues calls; supply weighs; spreads widen; bonds mixed

By Cristal Cody

Tupelo, Miss., Aug. 10 – The high-grade primary market stayed mostly quiet on Friday following heavier than expected volume during the week that beat syndicate forecasts.

United Technologies Corp. (Baa1/A-/) continued the second day of a two-day round of fixed income investor calls on Friday for an offering to fund the company’s acquisition of Rockwell Collins, Inc., a market source said.

BofA Merrill Lynch, HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC are the arrangers.

The Hartford, Conn.-based provider of technology products and services to the building and aerospace industries is expected to issue $14 billion of new debt to fund the cash portion of the acquisition of Rockwell Collins, a deal valued at about $30 billion.

An offering also is expected in the near future from Elanco Animal Health Inc. (Baa3/BB+/), which held fixed-income investor calls on Thursday for a potential $2.5 billion offering of senior notes to finance the Greenfield, Ind.-based animal health products company’s spin-off from Eli Lilly & Co., according to a market source.

In the secondary market, bank and financial paper traded mostly flat to softer over the day with paper from Mitsubishi UFJ Financial Group, Inc. about 2 bps to 4 bps wider, notes from Morgan Stanley flat to 1 bp softer and paper from JPMorgan Chase & Co. and Wells Fargo & Co. mostly unchanged, according to a market source.

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