Kinder Morgan meets demand; Perrigo, Raytheon price; Perrigo, Raytheon notes firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 24 – Kinder Morgan Energy Partners LP, Perrigo Finance plc, Raytheon Co. and Seagate HDD Cayman priced new deals to kick off the Thanksgiving holiday-shortened week.

“Strong tone to the market today,” one source noted.

Kinder Morgan’s new $6 billion offering was the highlight of the session, attracting an orderbook that was more than four times oversubscribed.

All five tranches of the new issue sold at the tight end of talk, which had firmed around 15 basis points to 25 bps compared to initial guidance.

Meanwhile, Perrigo Finance priced $1.6 billion of senior notes in three tranches.

Raytheon was also in the market on Monday, selling $600 million of senior notes in tranches due 2024 and 2044 at the tight end of talk.

The session also hosted Seagate HDD Cayman, an indirect wholly owned subsidiary of Seagate Technology plc, which offered an upsized $500 million of 20-year senior notes.

El Paso Electric Co. priced its new $150 million 30-year issue of senior notes in line with price talk.

The session also saw Export Development Canada announce price talk for a planned $1 billion five-year offering.

Around $9.15 billion of new issuance sold during the session. Sources had called for around $10 billion to $15 billion of new issuance for the shortened week.

High-grade bonds ended the session mostly better, market sources said.

The Markit CDX North American Investment Grade series 23 index firmed 2 bps to a spread of 62 bps.

Perrigo’s notes tightened 4 bps on the short end of the offering and 2 bps on the long end, according to a bond trader.

Raytheon’s two tranches of notes firmed 1 bp to 3 bps in the secondary market, a trader said.

Kinder Morgan’s notes priced late afternoon and were not active in the secondary market as the session closed, according to a trader.

No late aftermarket trading was seen in El Paso Electric’s new bonds, a trader said.

Kinder Morgan’s $6 billion

Kinder Morgan Energy Partners priced $6 billion of senior notes (Baa3/BBB-/BBB-) in five tranches on Monday, according to a market source.

The company priced $500 million of 2% three-year notes at Treasuries plus 110 bps.

Pricing was at 99.886 to yield 2.039%.

A second tranche was $1.5 billion of 3.05% five-year notes priced at 99.797 to yield 3.094%, or Treasuries plus 150 bps.

There was also $1.5 billion of 4.3% 10.5-year notes priced at 99.598 to yield 4.348%, or Treasuries plus 205 bps.

A $750 million tranche of 5.3% 20-year bonds sold at 99.718 to yield 5.323%, or Treasuries plus 230 bps.

Finally, $1.75 billion of 5.55% notes due 2045 sold at 99.663 to yield 5.573%.

The notes sold with a spread of Treasuries plus 255 bps.

The active bookrunners were Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo LLC. The passive bookrunners were Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, MUFG, RBC Capital Markets LLC, RBS Securities Inc. and Scotia Capital (USA) Inc.

Proceeds will be used to fund the company’s acquisitions of all of the outstanding equity interests of Kinder Morgan Management, LLC, Kinder Morgan Energy Partners, LP and El Paso Pipeline Partners, LP that it does not currently own.

Kinder Morgan is a Houston-based pipeline operator.

Perrigo three-parter

Perrigo Finance sold $1.6 billion of senior notes (Baa3/BBB/) in three tranches, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $500 million tranche of 3.5% seven-year notes sold at 99.937 to yield 3.51%, or Treasuries plus 150 bps.

There was also $700 million of 3.9% notes due 2024 sold at 99.579 to yield 3.951%, or Treasuries plus 165 bps.

Finally, $400 million of 4.9% notes due 2044 sold with a spread of 190 bps over Treasuries.

Pricing was at 99.701 to yield 4.919%.

The bookrunners were JPMorgan, Barclays, BofA Merrill Lynch, HSBC Securities (USA) Inc. and Wells Fargo Securities.

Proceeds will be used for general corporate purposes.

The notes will be fully and unconditionally guaranteed by Perrigo Co. plc.

In secondary trading, Perrigo’s 3.5% notes due 2021 tightened to 146 bps bid, 143 bps offered, a trader said.

The company’s 3.9% notes due 2024 traded 2 bps better at 163 bps bid, 161 bps offered.

The tranche of 4.9% notes due 2044 headed out firmer at 188 bps bid, 186 bps offered, the trader said.

The health-care company and maker of generic and over-the-counter pharmaceuticals is based in Allegan, Mich.

Raytheon prices tight

Raytheon sold a $600 million two-part offering of senior notes (A3/A) on Monday, according to an FWP filed with the SEC.

A $300 million tranche of 3.15% notes due 2024 priced at 99.377 to yield 3.223%, or Treasuries plus 92 bps.

A second tranche was $300 million of 4.2% 30-year bonds sold at 99.255 to yield 4.244%, or Treasuries plus 122 bps.

Both tranches sold at the tight end of talk.

The bookrunners were BofA Merrill Lynch, JPMorgan, Citigroup Global Markets and Credit Suisse Securities.

Proceeds will be used for general corporate purposes, including discretionary pension contributions.

The defense and homeland security technology company is based in Waltham, Mass.

Seagate upsizes

Seagate HDD Cayman sold an upsized $500 million of 5.75% 20-year senior notes (Baa3/BBB-/BBB-) on Monday at Treasuries plus 275 bps, according to a market source and a company press release.

The notes sold at the tight end of price talk.

Pricing was at 99.706 to yield 5.775%.

Bookrunner Morgan Stanley & Co. LLC will bill and deliver.

BofA Merrill Lynch, BNP Paribas Securities Corp. and Scotia Capital were the joint lead managers with no books.

HSBC, MUFG, U.S. Bancorp Investments Inc. and Wells Fargo Securities were the co-managers.

The Cupertino, Calif.-based hard-drive manufacturer plans to use the proceeds to refinance its 6.8% notes due 2016 and to put cash on its balance sheet.

El Paso 30-year bonds

El Paso Electric sold $150 million of 5% 30-year senior notes (Baa1/BBB/) on Monday at Treasuries plus 200 bps, according to a market source and an FWP filing with the SEC.

The notes sold in line with talk.

Pricing was at 99.645 to yield 5.023%.

JPMorgan and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes, including to fund capital expenditures and repay short-term borrowings under a credit facility.

The electric utility is based in El Paso.

EDC sets talk

Export Development Canada announced price talk for a planned $1 billion offering of five-year notes (Aaa/AAA/) on Monday, according to a market source.

The notes are being talked in the mid-swaps flat area.

Citigroup Global Markets, Daiwa Securities, Morgan Stanley and TD Securities are the joint bookrunners.

The government-backed agency for exporters is based in Ottawa.

Rabobank new issue

Rabobank Nederland priced $300 million of 2.25% bonds due 2019 at mid-swaps plus 50 bps, according to a market source.

Pricing was at 99.948 to yield 2.261%.

The notes sold in line with talk.

TD Securities, UBS Securities LLC and Rabobank International were the bookrunners.

The financial services company is based in Utrecht, the Netherlands.

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