Qualcomm brings $10 billion jumbo offering; Verizon mixed; Microsoft, Apple soft

By Aleesia Forni and Cristal Cody

Virginia Beach, May 13 – Qualcomm Inc. priced a $10 billion offering of senior notes to fund its share repurchase program on Wednesday, the highlight of a session that hosted more than $17 billion of new issuance.

All eight tranches of the telecommunications company’s deal sold between 10 basis points to 15 bps tight of initial price thoughts.

The giant deal was joined in the primary by ConocoPhillips Co., which sold $2.5 billion of bonds in five parts.

The deal’s book nabbed more than $9 billion of orders.

Two sovereign issuers, Province of Ontario and Finland, also entered Wednesday’s primary market.

Ontario sold its $2 billion five-year offering in line with initial talk, while Finland’s $1.5 billion three-year sale came at the tight end of guidance.

In other primary happenings, Aon plc sold $600 million of 30-year notes around 17.5 bps tight of initial guidance, and Connecticut Light and Power Co. sold $300 million of 30-year mortgage bonds.

Federal Home Loan Banks and Fossil Group Inc. joined the forward calendar on Wednesday, each announcing plans to bring deals to market later this week.

Wells Fargo & Co. tapped the Canadian market with a C$1 billion 10-year notes offering, Canada’s third maple bond deal of the year and the second of the week, a source said.

The San Francisco-based banking services company sold 3.874% 10-year subordinated medium-term notes at par to yield a spread of 208 bps over the interpolated Government of Canada bond curve.

London’s Heathrow (SP) Ltd. was in the Canadian market on Tuesday with a C$500 million offering of 3.25% class A 10-year notes.

Maple bonds are priced by high-grade corporate issuers that have headquarters outside of Canada.

In the secondary market, Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) were mixed over the day. Verizon announced on Tuesday that it plans to acquire AOL Inc. in a $4.4 billion deal.

Microsoft Corp.’s 2.7% notes due 2025 traded 2 bps weaker.

Apple Inc.’s 2.5% notes due 2025 widened 9 bps during the session.

The Markit CDX North American Investment Grade series 23 index edged modestly wider to a spread of 65 bps.

Qualcomm sells $10 billion

Qualcomm sold $10 billion of senior notes (A1/A+/) on Wednesday in eight tranches, according to a market source.

A $1.25 billion issue of 1.4% notes due May 18, 2018 priced at 99.866 to yield 1.446%, or Treasuries plus 50 bps, and a $250 million floating-rate note due May 18, 2018 sold at par to yield Libor plus 27 bps.

The company also priced $1.75 billion of 2.25% notes due May 20, 2020 at 99.92 to yield 2.267%.

The notes sold with a spread of Treasuries plus 70 bps.

A $250 million tranche of floating-rate notes due May 20, 2020 priced at par to yield Libor plus 55 bps.

There was also a $2 billion 3% note due May 20, 2022 priced at 99.962 to yield 3.006%, or 100 bps over Treasuries.

A $2 billion tranche of 3.45% notes due May 20, 2025 priced at 99.64 to yield 3.493%, or Treasuries plus 120 bps.

There was a $1 billion tranche of 4.65% notes due May 20, 2035 sold at 99.562 to yield 4.684%.

The issue sold at a spread of Treasuries plus 160 bps.

Finally, $1.5 billion of 4.8% notes due May 20, 2045 priced at 99.464 to yield 4.834%, or Treasuries plus 175 bps.

The bookrunners were BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, which may include funding the company’s capital return program and acquisitions.

The San Diego-based company designs, develops, manufactures and markets wireless telecommunications products and services.

ConocoPhillips five-parter

ConocoPhillips priced $2.5 billion of senior notes (A1/A/) on Wednesday in five tranches, according to a market source.

There was $750 million of 1.5% notes due 2018 priced at 99.988 to yield 1.504%, or Treasuries plus 55 bps.

Pricing was at the tight end of the Treasuries plus 60 bps area talked, which had firmed from initial guidance in the 65 bps area over Treasuries.

A $250 million tranche of floating-rate notes due 2018 sold at par to yield Libor plus 33 bps.

The notes were talked at the Libor equivalent to the three-year notes.

The company also issued $500 million of 2.2% notes due 2020 at 99.906 to yield 2.22%, or 65 bps over Treasuries.

The notes sold at the tight end of talk set in the 70 bps area over Treasuries. Initial guidance was set in the Treasuries plus 85 bps area.

A $500 million floating-rate due 2022 sold at par to yield Libor plus 90 bps.

The tranche sold on top of talk and initial guidance.

Finally, $500 million of 3.35% notes due 2025 priced at 99.655 to yield 3.391%, or Treasuries plus 110 bps.

The notes sold in line with guidance, which had firmed from initial talk set in the Treasuries plus 125 bps area.

The securities are guaranteed by ConocoPhillips.

JPMorgan, BofA Merrill Lynch, MUFG, RBC Capital Markets LLC, Citigroup Global Markets Inc., Mizuho Securities, SMBC Nikko and Societe Generale are the bookrunners.

The Houston-based energy company plans to use proceeds for general corporate purposes.

Ontario prices

The Province of Ontario priced $2 billion of 1.875% five-year notes (Aa2/AA-/) on Wednesday at mid-swaps plus 18 bps, or Treasuries plus 33.3 bps, according to an FWP filed with the Securities and Exchange Commission.

The notes were guided in the high-teens area over mid-swaps.

Pricing was at 99.957 to yield 1.884%.

Proceeds from the sale will be used for general provincial purposes.

The bookrunners are Barclays, BMO Capital Markets Corp., Citigroup Global Markets and HSBC Securities (USA) Inc.

Finland prices tight

Finland priced $1.5 billion of 1% three-year notes (Aaa/AA+/AAA) at mid-swaps minus 9 bps on Wednesday, according to a market source.

Price talk was set in the area of mid-swaps minus 8 bps.

The issue sold at 99.729 to yield 1.092%.

BofA Merrill Lynch, Citigroup Global Markets, Goldman Sachs and HSBC are the bookrunners for the Rule 144A and Regulation S deal.

Aon 30-year bonds

Aon sold $600 million of 4.75% 30-year senior notes on Wednesday at Treasuries plus 170 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.683 to yield 4.77%.

The notes (Baa2/A-/BBB+) are guaranteed by Aon Corp.

Proceeds from the sale will be used for general corporate purposes.

Morgan Stanley, Barclays, HSBC Securities and JPMorgan are the joint bookrunners.

The provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services is based in London.

Connecticut Light & Power offering

Connecticut Light and Power, doing business as Eversource Energy, sold $300 million of 4.15% first and refunding mortgage bonds, 2015 series A, due June 1, 2045 on Wednesday, according to a market source and an FWP filing with the SEC.

The bonds (A2/A+/A) priced at 98.261 to yield 4.253%, or Treasuries plus 120 bps.

The joint bookrunners are Citigroup Global Markets, Goldman Sachs, Wells Fargo Securities LLC, TD Securities (USA) LLC and U.S. Bancorp Investments Inc.

Williams Capital Group LP is the co-manager.

Proceeds will be used to refinance short-term debt.

The electric subsidiary of Northeast Utilities is based in Berlin, Conn.

TransCanada trust notes

Also on Wednesday, TransCanada Trust priced $750 million of 5.625% trust notes due May 20, 2075 at par with a spread of Treasuries plus 333.4 bps, according to an FWP filed with the SEC.

The notes (Baa2/BBB/) will be non-callable until May 20, 2025.

Beginning on May 20, 2025, the interest rate on the notes will be reset to Libor plus 352.8 bps.

The interest rate will be reset to Libor plus 427.8 bps on May 20, 2045.

The bookrunners are Deutsche Bank Securities, JPMorgan, MUFG, Mizuho Securities and BofA Merrill Lynch.

The natural gas and oil pipeline and storage company is based in Calgary, Alta.

FHLB, Fossil Group eye deals

Federal Home Loan Banks said it plans to sell $3 billion of two-year global bonds on Thursday, according to a company release.

The bond will mature on May 30, 2017.

Lead managers for the issue will be Citigroup Global Markets, Deutsche Bank Securities. New York Branch and Wells Fargo Securities.

BofA Merrill Lynch is the senior co-manager.

FHLBanks are 12 government-sponsored funding providers.

Also on Wednesday, Fossil Group announced plans to price a $300 million offering of senior notes due 2025, according to a market source and a 424B5 filed with the SEC.

The sale was originally expected to price on Wednesday, but was delayed and is expected to price on Thursday.

The bookrunners are JPMorgan, BofA Merrill Lynch and Wells Fargo Securities.

Proceeds will be used to repay debt under a revolving credit facility.

Fossil is a fashion accessories designer and marketer based in Richardson, Texas.

Verizon mostly soft

Verizon’s 3.5% notes due 2024 eased 2 bps to 130 bps bid on Wednesday, a source said.

The company sold $2.5 billion of the notes on Oct. 22 at Treasuries plus 135 bps.

Verizon’s 4.15% notes due 2024 traded 2 bps softer at 129 bps bid, the source said.

Verizon sold $1.25 billion of the notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

Microsoft eases

Microsoft’s 2.7% notes due 2025 eased 2 bps to 83 bps bid, a market source said.

Microsoft sold $2.25 billion of the notes (Aaa/AAA/) on Feb. 9 at 75 bps over Treasuries.

The computer software company is based in Redmond, Wash.

Apple weaker

Apple’s 2.5% notes due 2025 widened to 92 bps bid from 83 bps bid in Tuesday’s session, a market source said.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at Treasuries plus 85 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

Bank/broker CDSs mostly lower

Investment-grade bank and brokerage CDS prices were mostly lower on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs were down 1 bp to 66 bps bid, 68 bps offered. Citigroup Inc.’s CDS costs were also 1 bp lower at 76 bps bid, 78 bps offered. JPMorgan Chase & Co.’s CDS costs fell 1 bp to 63 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs were flat at 43 bps bid, 47 bps offered.

Merrill Lynch & Co., Inc.’s CDS costs declined 1 bp to 68 bps bid, 72 bps offered. Morgan Stanley’s CDS costs were flat at 79 bps bid, 81 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 2 bps lower at 84 bps bid, 87 bps offered.

Stephanie N. Rotondo contributed to this review.

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