Western Gas sells $200 million tap of bonds; credit spreads stable; Spectra Energy gains

By Cristal Cody

Eureka Springs, Ark., Oct. 6 – Western Gas Partners, LP tapped the investment-grade bond market on Thursday in an otherwise mostly quiet session headed into a long holiday weekend, sources report.

Western Gas priced a $200 million reopening of its split-rated 5.45% senior notes due April 1, 2044 in line with guidance.

The Markit CDX North American Investment Grade index closed mostly unchanged at a spread of 75 basis points.

In the secondary market, Spectra Energy Partners LP’s reopened 4.5% notes due 2045 traded about 3 bps better early Thursday.

Western Gas sells add-on

Western Gas Partners priced a $200 million tap of its split-rated 5.45% senior notes due April 1, 2044 at 102.776 to yield 5.256% on Thursday, according to an FWP filing with the Securities and Exchange Commission.

The notes (Ba1/BBB-/BBB-) priced with a spread of Treasuries plus 280 bps.

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Credit Suisse Securities (USA) LLC, MUFG, SG Americas Securities, LLC, UBS Securities LLC and U.S. Bancorp Investments, Inc. were the lead managers.

The company originally sold $400 million of the notes on March 11, 2014 at 98.443 to yield 5.557%, or Treasuries plus 185 bps. The total outstanding is $600 million.

Proceeds will be used to repay borrowings outstanding under the company’s revolving credit facility, and any remaining proceeds will be used for general partnership purposes.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets in the United States.

Spectra Energy firms

Spectra Energy Partners’ 4.5% notes due 2045 that were reopened on Wednesday were quoted early Thursday at 199 bps offered in secondary trading, according to a market source.

Spectra Energy Partners priced a $200 million add-on to the bonds at a spread of 202 bps over Treasuries.

The company originally sold $500 million of the bonds on March 12, 2015. The total outstanding now is $700 million.

The natural gas transmission and production company is based in Houston.

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