AB InBev sells $46 billion of bonds; Goldman Sachs firms; MetLife flat; Visa paper eases

By Aleesia Forni and Cristal Cody

New York, Jan. 13 – Anheuser-Busch InBev Finance Inc. sold a staggering $46 billion of bonds on Wednesday to help fund its planned acquisition of SABMiller.

The deal marks the second-largest bond ever to enter the market, coming in behind Verizon Communications Inc.’s $49 billion jumbo deal that priced in 2013.

Investors poured into the highly anticipated deal. The order book reached more than $109 billion, topping the $101 billion of orders seen for Verizon’s deal.

The solid performance of the deal is expected to set the tone for a host of new merger and acquisition financings expected to enter the market later this year.

Away from the jumbo bond, the primary also hosted new offerings from Sumitomo Mitsui Banking Corp., Nippon Life Insurance Co., Province of Ontario and Japan Bank for International Cooperation.

Investment-grade credit spreads widened over the day after tightening initially at the start of the market session.

The Markit CDX North American Investment Grade 25 index opened the session 1 bp tighter at a spread of 98 bps and closed 6 bps weaker at a spread of 104 bps.

In secondary trading on Wednesday, Goldman Sachs Group Inc.’s 4.25% subordinated notes due 2025 tightened 6 bps.

MetLife Inc.’s 3.6% senior notes due 2025 remained mostly unchanged after the company reported after the market closed on Tuesday that it plans to divest a significant portion of its U.S. retail segment.

Visa Inc.’s senior notes (A1/A+) eased 3 bps during the session.

AB InBev sells $46 billion

Anheuser-Busch InBev sold all tranches of its $46 billion jumbo new issue (A2/A-) on Wednesday at the tight side of price guidance and between 15 bps and 35 bps inside initial price thoughts.

The deal’s final size was nearly double what sources had expected earlier during the trading day, and plans for a three-year floating-rate tranche were dropped prior to its launch.

There was $4 billion of 1.9% three-year notes sold at 99.729 to yield 1.993%, or Treasuries plus 85 bps.

A $7.5 billion 2.65% tranche of five-year notes sold at 99.687 to yield 2.717% with a spread of Treasuries plus 120 bps.

A $500 million five-year floating-rate tranche sold at par to yield Libor plus 126 bps.

Also priced was $6 billion of 3.3% seven-year notes. The issue sold at 99.621 to yield 3.361%, or Treasuries plus 150 bps.

And $11 billion of 3.65% 10-year bonds priced at 160 bps over Treasuries. The notes sold at 99.833 to yield 3.67%.

The company also sold $6 billion of 4.7% 20-year bonds at Treasuries plus 190 bps. Pricing was at 99.166 to yield 4.765%.

Finally, $11 billion of 4.9% 30-year bonds priced at 99.765 to yield 4.915%, or Treasuries plus 205 bps.

There is a guarantee by Anheuser-Busch InBev SA/NV, Anheuser-Busch InBev Worldwide Inc., Brandbev Sarl, Brandbrew SA, Cobrew NV and Anheuser-Busch Cos. LLC.

BofA Merrill Lynch, Barclays and Deutsche Bank Securities Inc. are bookrunners and global coordinators. MUFG, Santander and Societe Generale are bookrunners.

Proceeds from the sale will be used to fund a portion of the purchase price for the acquisition of SABMiller and the remainder for general corporate purposes.

The brewery is based in Leuven, Belgium.

Ontario prices new issue

In other primary action on Wednesday, the Province of Ontario sold $2.5 billion of 1.625% bonds (Aa2/A+//DBRS: AA) on Wednesday at mid-swaps plus 55 bps, or Treasuries plus 56.5 bps, according to an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.695 to yield 1.73%.

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

The bookrunners are BofA Merrill Lynch, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, BMO Capital Markets Corp., CIBC World Markets Corp., National Bank of Canada Financial Inc. and RBC Capital Markets LLC.

SMBC prices tight

Sumitomo Mitsui Banking sold $1.25 billion of three-year notes in fixed- and floating-rate pieces, a market source said.

There was $750 million of 2.05% three-year notes priced at 99.931 to yield 2.074%, or Treasuries plus 95 bps.

The notes were guided in the Treasuries plus 100 bps area and initially talked in the area of Treasuries plus 100 bps.

There was $500 million of three-year floating-rate notes priced at par to yield Libor plus 94 bps.

The tranche was talked at the Libor equivalent to the fixed-rate piece.

Bookrunners are Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co., Nomura and SMBC Nikko.

Sumitomo Mitsui is a Tokyo-based financial services company.

JBIC sells 10-year notes

Japan Bank for International Cooperation sold $1 billion of 2.75% guaranteed bonds (A1/A+) due Jan. 21, 2026 on Wednesday at mid-swaps plus 86 bps, according to a market source and an FWP filed with the SEC.

Guidance was set in the mid-swaps plus 86 bps area.

Pricing was at 99.446 to yield 2.814%, or Treasuries plus 71.6 bps.

The notes will be guaranteed by Japan.

Nomura, Barclays, BofA Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for the bank’s financing operations.

The financial institution is based in Tokyo.

Goldman tightens

Goldman’s 4.25% subordinated notes due 2025 firmed 6 bps to 215 bps bid in late-afternoon secondary trading, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The financial services company is based in New York City.

MetLife steady

MetLife’s 3.6% notes due 2025 were unchanged on Wednesday at 123 bps bid, a market source said.

The company sold $500 million of the notes (A3/A-/A-) on Nov. 9 at a spread of Treasuries plus 125 bps.

The insurance and employee benefits company is based in New York City.

Visa softens

Visa’s 3.15% notes due 2025 headed out weaker at 95 bps bid after opening the session 2 bps softer at 94 bps bid, according to a market source.

The company sold $4 billion of the notes on Dec. 9 at Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

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