Morgan Stanley, Ford Motor Credit, Rio Tinto price; Time Warner tight; Home Depot mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, June 11 – Morgan Stanley, Ford Motor Credit Co. LLC, Rio Tinto Finance (USA) plc, Caterpillar Financial Services Corp. and Devon Energy Corp. tapped the primary market on Thursday, pricing mostly shorter-date paper.

In total, this week has seen more than $39.8 billion of new investment-grade issuance, pushing June’s total so far to roughly $63 billion.

Morgan Stanley offered a $2.9 billion issue of five-year notes in fixed- and floating-rate tranches at the tight end of price talk.

Ford Motor Credit attracted an order book that was around 1.5 times oversubscribed for its new $1.5 billion two-part offering of three-year notes.

Also on Thursday, Rio Tinto Finance priced a $1.2 billion 10-year note around 15 basis points tight of initial price thoughts, while Caterpillar Financial Services and Devon Energy were each in the market with upsized new issues.

Svensk Exportkredit AB joined the forward calendar on Thursday, mandating leads ahead of a planned five-year green bond offering.

Investment-grade bonds headed out mixed in secondary trading.

Time Warner Cable Inc.’s 4.125% notes due 2021 traded 7 bps tighter. Time Warner Cable’s bonds have tightened about 100 bps since Charter Communications, Inc. announced in May it will acquire the company for about $79 billion in cash and stock.

Time Warner Inc.’s bonds (Baa2/BBB) were unchanged to about 1 bp better on Thursday.

Home Depot Inc.’s bonds (A2/A/A) traded flat to 2 bps softer.

The Markit CDX North American Investment Grade series 23 index was modestly tighter to unchanged at a spread of 66 bps.

Morgan Stanley offering

Morgan Stanley sold a $2.9 billion offering of five-year senior notes (A3/A-/A) in fixed- and floating-rate tranches on Thursday, according to a market source.

The issuance included $2.5 billion of 2.8% five-year notes priced at 99.88 to yield 2.826%, or Treasuries plus 110 bps.

Guidance was set in the Treasuries plus 115 bps area, having tightened from Treasuries plus 120 bps to 125 bps.

A $400 million five-year floating-rate note sold at par to yield Libor plus 98 bps.

Morgan Stanley & Co. LLC was the bookrunner.

The financial services company is based in New York City.

Ford two-parter

Ford Motor Credit priced on Thursday a $1.5 billion issue of senior notes (Baa3/BBB-/BBB-) in fixed- and floating-rate tranches due 2018, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $1 billion tranche of 2.24% three-year notes priced at par with a spread of Treasuries plus 115 bps.

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

Also priced was $500 million of three-year floating-rate notes at par to yield Libor plus 90 bps.

Guidance was set at the Libor equivalent of the fixed-rate tranche.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Lloyds Securities Inc. and SG Americas Securities, LLC were the bookrunners.

Proceeds will be added to the general funds of Ford Credit and will be available for the purchase of receivables, for loans and for use in connection with the retirement of debt.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Rio Tinto prices tight

In other primary action on Thursday, Rio Tinto Finance sold $1.2 billion of 3.75% senior notes (A3/A-/) due 2025 on Thursday at Treasuries plus 145 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.333 to yield 3.831%.

The notes sold at the tight end of the Treasuries plus 145 bps to 150 bps price guidance.

Bookrunners are Citigroup Global Markets Inc., Deutsche Bank Securities Inc., SG Americas Securities, HSBC Securities (USA) Inc., MUFG and RBC Capital Markets, LLC.

Proceeds will be used to fund the redemption of its 2.5% notes due 2016 and 2.25% notes due 2016 and for general corporate purposes.

There is a guarantee on the notes by Rio Tinto plc and Rio Tinto Ltd.

The metals and mining company is based in London and in Melbourne, Australia.

Caterpillar upsizes

Thursday’s primary also hosted Caterpillar Financial Services, which priced an upsized $800 million of senior notes (A2/A/A) in two tranches, according to two FWP filings with the SEC.

The company sold a $300 million floating-rate note due 2017 at par to yield Libor plus 17 bps.

The notes sold at the tight end of price talk set in the Libor plus 20 bps area.

There was also a $500 million 1.7% note due 2018 sold at 99.991 to yield 1.703%, or Treasuries plus 60 bps.

Pricing was at the tight end of the Treasuries plus 65 bps area talk.

The size of the combined tranches was increased from a planned $750 million.

Proceeds will be used for general corporate purposes.

The bookrunners were BofA Merrill Lynch and J.P. Morgan Securities LLC.

The funding arm of heavy equipment maker Caterpillar is based in Nashville.

Devon Energy 30-year bonds

Devon Energy tapped Thursday’s market for $750 million of 5% senior notes due June 15, 2045 priced with a spread of Treasuries plus 195 bps, according to a market source.

Pricing was at 99.775 to yield 5.08%.

The notes (Baa1/BBB+/BBB+) sold at the tight end of guidance set in the 200 bps area over Treasuries.

Goldman Sachs and JPMorgan are the joint bookrunners.

The company plans to use $500 million of the proceeds to repay its floating-rate senior notes due Dec. 15, 2015, and the remainder will be used for general corporate purposes.

The oil, natural gas and natural gas liquids company is based in Oklahoma City.

SEK green bond

Svensk Exportkredit announced on Thursday its plans to price a five-year green bond, according to a market source.

BofA Merrill Lynch, Credit Agricole, HSBC Securities and Skandinaviska Enskilda Bankenare are the bookrunners.

Based in Stockholm, Svensk is the lender to Sweden's export industry.

Time Warner Cable tightens

Time Warner Cable’s 4.125% notes due 2021 firmed 7 bps to 182 bps bid, according to a market source.

The bonds traded before the announcement of the merger with Comcast in May at 280 bps bid.

Time Warner Cable sold $700 million of the notes (Baa2/BBB/BBB) in 2010 at a spread of Treasuries plus 155 bps.

The broadband communications company is based in New York City.

Time Warner mostly unchanged

Time Warner’s 3.6% notes due 2025 firmed 1 bp to 150 bps bid, according to a market source.

The company sold $1.5 billion of the notes on May 28 at Treasuries plus 150 bps.

Time Warner’s 4.85% debentures due 2045 were unchanged at 189 bps bid.

The company sold $600 million of the debentures in the May 28 offering at Treasuries plus 195 bps.

The media company is based in New York.

Home Depot flat to softer

Home Depot’s 2.625% notes due 2022 were unchanged in the secondary market at 73 bps bid, a source said.

The company sold $1.25 billion of the notes at Treasuries plus 80 bps on May 28.

Home Depot’s 4.25% notes due 2046 eased 2 bps over the day to 132 bps bid.

The company sold $1.25 billion of the bonds in the May 28 offering at Treasuries plus 135 bps.

The home improvement retailer is based in Atlanta.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.