Chevron, ANZ, Delphi among onslaught of issuers; energy bonds mixed; credit spreads widen

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 9 – High-grade bond issuers piled into the primary on Monday, taking advantage of stellar market conditions following the better-than-expected jobs report released at the tail end of last week.

The strong employment data has led many participants to expect the Federal Reserve to increase interest rates following its mid-December policy meeting, its first in nearly a decade.

In light of the news, Chevron Corp., Wells Fargo, Australia and New Zealand Banking Group and MetLife Inc. were among the names kicking off what is expected to be a busy week for the primary, with issuers securing financing before the late-year holidays and a potential rate hike.

Chevron’s $5 billion deal was the largest priced on Monday, with all tranches of the six-part issue coming at the tightest side of guidance.

Also of note, Delphi Automotive plc sold $1.3 billion of notes in order to fund its acquisition of HellermannTyton Group plc, while Zoetis Inc. sold both tranches of its new $1.25 billion deal around 22 basis points tighter than talk.

Issuers also accessed the markets ahead of Wednesday’s market closure due to the Veterans Day holiday.

More than $15.5 billion of new paper priced on Monday, already more than halfway toward what sources expect to be around a $25 billion to $30 billion week for the high-grade primary.

Marathon Oil Corp.’s senior notes (Baa1/BBB/) traded flat to tighter following the company’s announcement it plans to sell the majority of its Gulf of Mexico assets for $205 million.

Exxon Mobil Corp.’s 2.709% notes due 2025 were unchanged over the day.

ConocoPhillips Co.’s senior notes (A1/A/) firmed 1 bp to 3 bps in the secondary market.

Halliburton Co.’s new senior notes (A2/A/A-) traded better than issuance earlier in the session.

The Markit CDX North American Investment Grade 25 index eased 2 bps to close at a spread of 81 bps.

Chevron sells $5 billion

Chevron sold $5 billion of senior notes (Aa1/AA) in six tranches on Monday, according to an informed source.

A $1 billion 1.344% two-year note sold at par with a spread of 45 bps over Treasuries, at the tight end of guidance set in the Treasuries plus 50 bps area. Guidance tightened from talk in the Treasuries plus 55 bps to 60 bps range.

Also, $500 million of two-year floaters sold at par to yield Libor plus 36 bps following guidance set at the Libor equivalent to the fixed-rate tranche.

And $1.25 billion of 1.79% three-year notes sold at par, or Treasuries plus 55 bps. The tranche sold at the tight end of the Treasuries plus 60 bps area guidance. Initial talk was in the range of Treasuries plus 65 bps to 70 bps.

A $250 million three-year floater priced at par to yield Libor plus 51 bps. Guidance was at the Libor equivalent to the three-year notes.

The company also sold $1.25 billion of 2.419% five-year notes at par with a 67 bps spread over Treasuries.

Guidance was in the Treasuries plus 70 bps area, and talk was in the range of Treasuries plus 80 bps to 85 bps.

Finally, $750 million of 3.326% 10-year notes priced at par, or 97 bps over Treasuries.

The tranche was guided in the Treasuries plus 100 bps area after having firmed from the Treasuries plus 120 bps area talk.

A five-year floating-rate tranche, which was talked at the Libor equivalent to the fixed-rate piece, was dropped prior to the deal’s launch.

Barclays, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including refinancing a portion of commercial paper.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

ANZ new issue prices

In other primary happenings, Australia and New Zealand Banking Group sold $3.25 billion of notes (Aa2/AA-/AA) in four parts, a market source said.

There was $750 million of 2% three-year notes priced at Treasuries plus 80 bps.

Guidance was in the Treasuries plus 80 bps to 85 bps, tighter than initial talk set in the Treasuries plus low-90 bps area.

The company also priced $750 million of three-year floaters at par to yield Libor plus 75 bps.

A $1 billion 2.7% tranche of five-year notes sold at 100 bps over Treasuries.

The issue’s spread came at the tight side of guidance set in the range of Treasuries plus 100 bps to 105 bps after having tightened from talk in the Treasuries plus 110 bps area.

And $750 million of 3.7% 10-year notes sold with a spread of Treasuries plus 140 bps.

Price guidance was set in the range of Treasuries plus 140 bps to 145 bps. Initial talk was in the Treasuries plus 150 bps area.

Bookrunners were ANZ, Deutsche Bank Securities Inc., JPMorgan and Goldman Sachs & Co.

The financial services company is based in Melbourne, Australia.

Delphi sells two-parter

Gillingham, England-based Delphi Automotive sold $1.3 billion of senior notes (Baa3/BBB/BBB) in two tranches on Monday, according to an informed source.

The offering included $650 million of 3.15% five-year notes sold at 99.784 to yield 3.197%, or 145 bps over Treasuries.

A $650 million 4.25% tranche of long 10-year bonds sold at 99.942 to yield 4.256% with a spread of Treasuries plus 190 bps.

Both tranches came at the tightest side of guidance.

Barclays, BofA Merrill Lynch, Citigroup and Deutsche Bank are the joint bookrunners.

The vehicle components manufacturer plans to use proceeds to fund the acquisition of HellermannTyton Group plc. Any remaining proceeds will be used for general corporate purposes.

Zoetis prices tight

The session also saw Zoetis price a $1.25 billion offering of senior notes in two tranches, according to a market source.

The sale (Baa2/BBB-) included a $500 million tranche of notes due 2020 that sold at 173 bps over Treasuries. Guidance was in the 175 bps area over Treasuries following the 195 bps area over Treasuries talk.

Also, a $750 million piece of 4.5% bonds due 2025 priced at 218 bps over Treasuries.

The issue came at the tight end of the Treasuries plus 220 bps area guidance and inside initial talk set in the Treasuries plus 240 bps area.

BofA Merrill Lynch, Barclays, Citigroup and JPMorgan are the bookrunners.

Proceeds will be used to repay amounts drawn under a revolving credit facility to fund the $765 million purchase price of Salar Topco AS, to repay $400 million of 1.15% senior notes due 2016 and for general corporate purposes.

Zoetis is an animal health subsidiary of Pfizer Inc., based in New York City.

MetLife offering eyed

MetLife priced $1.25 billion of senior notes (A3/A-/A-) in tranches due 2025 and 2046 on Monday, according to a market source.

The sale included $500 million of 3.6% notes due 2025 priced at Treasuries plus 125 bps.

Pricing came at the tight side of the Treasuries plus 130 bps area guidance after having tightened from the Treasuries plus 145 bps area talk.

Also, $750 million of 4.6% bonds due 2046 sold at Treasuries plus 150 bps.

Guidance was in the 155 bps area over Treasuries following initial talk set in the 170 bps area over Treasuries.

The bookrunners are Deutsche Bank, Barclays, HSBC Securities and Wells Fargo.

Proceeds will be used for general corporate purposes, including to help repay $1.25 billion of 6.75% senior notes due June 1, 2016.

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

Caterpillar taps market

Also on Monday, Caterpillar Financial Services Corp. sold $750 million of senior notes (A2/A) in three- and five-year tranches on Monday, according to a market source and two separate FWP filings with the Securities and Exchange Commission.

A $500 million 1.8% tranche of three-year notes sold at 99.907 to yield 1.832% with a spread of Treasuries plus 60 bps.

Pricing came at the tight end of the Treasuries plus 65 bps area guidance after having tightened from talk in the Treasuries plus 75 bps area.

Also, $250 million of 2.5% five-year notes sold with a 78 bps spread over Treasuries. The notes priced at 99.911 to yield 2.519%.

Guidance was in the Treasuries plus 80 bps area. Initially, talk was in the Treasuries plus 95 bps area.

Bookrunners were Barclays, Citigroup and JPMorgan.

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

Aon prices tight

Aon plc sold a $400 million offering of 2.8% senior notes (Baa2/A-/BBB+) due March 15, 2021 on Monday at Treasuries plus 110 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.81 to yield 2.839%.

Guidance was set in the 115 bps area over Treasuries, following initial talk set in the Treasuries plus 135 bps area.

The notes are guaranteed by Aon Corp.

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

Citigroup, Goldman Sachs, Barclays and Credit Suisse Securities were the joint bookrunners.

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

Charles Schwab offers notes

Elsewhere on Monday, Charles Schwab Corp. sold $350 million of 3.45% senior notes (A2/A) due Feb. 13, 2026 on Monday with a spread of Treasuries plus 115 bps, according to a market source.

The notes sold at the tight side of guidance set in the 120 bps area over Treasuries. Initial talk was in the 135 bps area over Treasuries.

Pricing was at 99.619 to yield 3.495%.

Bookrunners are Citigroup, Credit Suisse Securities, Goldman Sachs and JPMorgan.

Proceeds will be used for general corporate purposes, including the repayment of $350 million of 0.85% senior notes due Dec. 4, 2015.

Schwab is a brokerage and financial services company based in San Francisco.

P&G paper on deck

In forward calendar news, Procter & Gamble Co. said it plans to sell floating-rate notes due Nov. 13, 2065 at Libor minus 30 bps, according to a 424B3 filed with the SEC.

BofA Merrill Lynch, Deutsche Bank, JPMorgan, Morgan Stanley, UBS Securities LLC and Wells Fargo are the bookrunners.

The notes are callable in whole or in part beginning 2045 at 105 and at prices declining by 50 bps annually through 2055, when the call price is par until maturity.

The notes are putable in whole or in part from Nov. 13, 2016 to Nov. 13, 2020 at 98, from Nov. 1, 2021 to Nov. 13, 2025 at 99 and on Nov. 13, 2026 and every third year thereafter at par.

Proceeds will be used for general corporate purposes.

Procter & Gamble is a Cincinnati-based consumer products company.

Marathon Oil mixed

Marathon Oil’s 3.85% notes due 2025 firmed 7 bps to 288 bps bid on Monday, a market source said.

The company sold $900 million of the notes on June 1 at a spread of Treasuries plus 170 bps.

The tranche of 5.2% bonds due 2045 was flat on the day at 327 bps bid.

Marathon Oil sold $500 million of the bonds in the June 1 offering at Treasuries plus 225 bps.

The energy company is based in Houston.

Exxon Mobil stable

Exxon Mobil’s 2.709% notes due 2025 headed out unchanged at 67 bps bid, according to a market source.

Exxon Mobil sold $1.75 billion of the notes (Aaa/AAA) on March 3 at Treasuries plus 58 bps.

The oil and gas company is based in Irving, Texas.

ConocoPhillips improves

ConocoPhillips’ 2.2% notes due 2020 firmed 3 bps to 65 bps bid on Monday, according to a market source late afternoon.

ConocoPhillips sold $500 million of the notes on May 13 at Treasuries plus 65 bps.

The company’s 3.35% notes due 2025 firmed 1 bp to 140 bps bid.

ConocoPhillips sold $500 million of the notes in the May 13 deal at Treasuries plus 110 bps.

The energy company is based in Houston.

Halliburton tight

Halliburton’s 2.7% notes due 2020 were seen tighter at 91 bps offered early in the session, according to a market source.

The company sold $1.25 billion of the five-year notes on Thursday at a spread of Treasuries plus 110 bps.

The company’s 3.8% notes due 2025 firmed to 149 bps offered, tighter than where the notes priced in a $2 billion tranche at Treasuries plus 160 bps.

Halliburton’s 5% bonds due 2045 traded better at 191 bps offered in secondary trading earlier on Monday. The bonds priced in a $2 billion offering on Thursday at Treasuries plus 200 bps.

The diversified energy services company is based in Houston.

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