Eight issuers test post-Verizon market
NEW YORK, Sept 12 (IFR) - With the Verizon Communications deal out of the way, eight issuers who were sitting on the sidelines all week took the plunge and raised about USD5bn, adding to the already record volumes issued this week. Bankers, however, were worried that this major withdrawal of investment cash could now limit appetite for upcoming issues and broadly make investors more selective.
"The whole market seems fatigued this week but it is still amazing how fundamentally strong this high-grade market is because again today we saw deals going well despite Verizon yesterday," said one banker.
Deals offered to investors ended up with decent order book sizes and only slightly inflated new issue concessions. Reynolds American for instance raised USD1.1bn from a two-part issue by tightening pricing by about 10bp-15bp from IPT levels and an order book of USD4bn. Concessions on its 10-year bonds were roughly around 10bp while the 30-year was judged to have about 30bp in concession.
Energy Transfer Partners also tightened pricing by about 10bp-25bp from IPTs on its three-part transaction which showed that issuers were still afforded pricing leverage in a market which has so far been flooded by paper.
"The impact on investment sentiment will come in the form of more selective buying but there is a pipeline of issuers still out there waiting to do deals and they will come early next week. Even after almost USD66bn this week, the market could still see closer to USD20bn next week."
Reynolds American Inc, Baa2/BBB-, announced a USD benchmark SEC-registered two-part offering that consists of a 10-year and 30-year senior notes. The active joint bookrunners were Citigroup, Goldman Sachs and JP Morgan, and the passive bookrunners were CS, FITB, Miz, RBC and SCOT. Proceeds are being used to redeem or repurchase the approximately USD200m outstanding principal amount of RAI's 7.300% notes due 2015 and the approximately USD775m outstanding principal amount of RAI's 7.625% notes due 2016, and to use any balance to repay or prepay some or all of the USD300m current principal balance of RAI's term loan. Settlement: T+3.
IPT: 10yr T+210bp and 30yr at T+240bp PRICE GUIDANCE: 10yr at T+200bp area and 30yr at T+235bp area. Area is +/-5bp. LAUNCH: USD1.1bn total - USD550m 10yr at T+195bp - USD550m 30yr T+230bp PRICED: - USD550m. Cpn 4.85%. Due 9/15/23. Ip 99.922. Yld 4.860%. T+195bp. MWC T+30bp - USD550m. Cpn 6.15%. Due 9/15/43. Ip 99.553. Yld 6.183%. T+230bp. MWC T+35bp BOOK SIZE: USD4bn total - USD2bn per tranche NIC: 10-year: 10bp; 30-year: 30bp COMPS: Reynolds Nov 2022 at T+170bp, G+185bp Reynolds Nov 2043 at T+200bp ENERGY TRANSFER PARTNERS Energy Transfer Partners LP, Baa3/BBB-/BBB-, announced a USD benchmark SEC registered 3-tranche senior unsecured issue consisting of a 7-year, 10.5-year and a 30-year. Active bookrunners: Credit Suisse and JP Morgan, with Citi and UBS as passive bookrunners. Proceeds are being used to repay all of the borrowings outstanding under the term loan of Panhandle's wholly owned subsidiary, Trunkline LNG Holdings, LLC, or Trunkline LNG, and to repay borrowings outstanding under its revolving credit facility. Settlement date T+5 (09/19). IPT: 7yr T+210bp area, 10.5yr T+220bp, 30yr T+235bp area PRICE GUIDANCE: 7yr T+190bp area, 10.5yr T+215bp, 30yr T+230bp area. Area is +/-5bp) LAUNCH: USD1.5bn total - USD700m 7yr at T+185bp - USD350m 10.5yr T+210bp - USD450m 30yr T+225bp PRICED: - USD700m. Cpn 4.l5%. Due 10/01/20. Ip 99.829. Yld 4.178%. T+185bp. MWC T+30bp. - USD350m. Cpn 4.90. Due 2/01/24. Ip 99.181. Yld 5.003%. T+210bp. MWC T+35bp. - USD450m. Cpn 5.95%. Due 10/01/43. Ip 97.647. Yld 6.122%. T+225bp. MWC T+37.5bp BOOK SIZE: USD4.5bn total NIC: 7yr 0-5bp; 10.5yr 10bp; 30yr 12bp WEYERHAEUSER Weyerhaeuser Co (WY), Baa3/BBB-, announced a USD500m (no grow) SEC registered 10-year senior note due 9/15/23. The notes contain a change of control put at 101. The active bookrunners were JP Morgan and Morgan Stanley. Proceeds are being used to repay the existing debt and related fees & expenses. IPT: T+200bp area PRICE GUIDANCE: T+180bp area (+/-5bp) LAUNCH: USD500m at T+175bp. PRICED: USD500m 4.625% 10yr (9/15/23). At 99.898, yld 4.638%. T+175bp. MWC+30bp BOOK SIZE: USD2bn NIC: neg 9bp COMPS: WY 7.375% 2019 at 100/190, G+167bp WY 7.375% 2032 at 188-178, G+245bp WY 6.875% 2033 at 198/188, G+247bp MidAmerican ENERGY MidAmerican Energy Co. (MIDAM), Aa3/A/A+, announced a USD950m (no grow) 3-tranche SEC registered FMB deal that consists of a 5.5-year, 10-year and 30-year. The active bookrunners are Barclays, JP Morgan and RBS, with the passive bookrunners UNBC, MUFG, USB and BNP. Proceeds are being used for the repayment of maturing long-term debt in an aggregate amount of approximately USD670m, maturing December 31, 2013, and the remainder for GCP. Settlement date: T+5 (9/19). IPT: 5.5yr very low 80s, 10yr mid 80s, 30yr very low 100s. PRICE GUIDANCE: 5.5-year at T+70-75bp, 10-year at T+85bp area (+/-2bp), 30-year at T+95-100bp. LAUNCH: USD950m total - USD350m 5.5yr at T+70bp - USD250m 10yr T+83bp - USD350m 30yr T+95bp PRICED: - USD350m. Cpn 2.50%. Due 9/15/16. Ip 99.923. Yld 2.527%. T+165bp. MWC T+30bp - USD250m. Cpn 3mL+153bp. Due 9/15/16. Ip par. Yld 3mL+153bp - USD350m. Cpn 3.65%. Due 9/14/18. Ip 99.996. Yld 3.651%. T+190bp. MWC T+35bp DAYTON POWER &LIGHT Dayton Power & Light (AES), Baa1/BBB-/BBB, announced a USD445m (no grow) 3-year (9/15/16) FMB 144a w/reg rights deal,. The active bookrunners are BofAML and Morgan Stanley, with passive bookrunners FITB/PNC/USB. Proceeds are being used to repay at maturity USD470m aggregate principal amount of our First Mortgage Bonds, 5.125% Series due 2013. Settlement date 09/19. IPT: T+150bp area PRICE GUIDANCE: T+125bp area (+/-5bp) REVISED GUIDANCE: T+115bp area (+/-5bp) LAUNCH: USD445m at T+110bp PRICED: USD445m. Cpn 1.875%. Due 9/15/16. Ip 99.83. Yld 1.934%. T+110bp. MWC+20bp. BOOK SIZE: USD2.5bn COMPS: no comps (unique credit)
INTERNATIONAL GAME TECHNOLOGY International Game Technology (TGT), Baa2/BBB (s/s), announced a USD500m SEC registered 10-year (10/15/23) senior note. The active bookrunners are DB, GS and MS, with the passive bookrunners BAML, JPM and RBS. UOP: GCP and to redeem a portion of the 3.25% convertible due 2014 at maturity on May 1 2014. USD101 COC put. Settle: T+5. IPT: T+225-237.5bp LAUNCH: USD500m at T+250bp PRICED: USD500m. Cpn 5.35%. Due 10/15/23. Ip 99.587. Yld 5.403%. T+250bp. MWC T+40bp.
SUMITOMO LIFE Sumitomo Life Insurance Company released initial price thoughts of 6.5% area for a US dollar benchmark 60-year non-call 10 144A/Reg S subordinated bond offering. The bonds are rated Baa1/BBB+. JP Morgan is structuring co-ordinator for the transaction and joint bookrunner with Bank of America Merrill Lynch. Settle: T+5. LAUNCH: USD1bn at 6.50% PRICED: USD1bn. Cpn 6.50%. Due 9/20/73 NC10. IP par. Yld 6.50%. If not called coupon steps up to 3mL+444bp.
CREDIT AGRICOLE Credit Agricole S.A., BBB-/BBB- expected on the notes, announced a USD benchmark 144A/Reg S 20-year subordinate contingent capital note due 9/19/33 - Tier 2 capital. The joint bookrunners are CA-CIB, Citi, Deutsche Bank, Goldman Sachs, HSBC and UBS. Settlement: 9/19/13. First Call date: 9/19/18. PRICED: USD1bn 8.125% 9/19/33 at 100. LAUNCH: USD1bn at 8.125% PRICE GUIDANCE: 8% - 8.25%
CITIGROUP Citigroup Inc., B1/BB/BB, announced a USD500m (USD25 20m shs) SEC-Reg perpetual nc10 non-cumulative via CITI. Joint lead mangers are BAML/BARC/DB/GS/JPM/RBS/UBS/WFS. DRD/QDI eligible. DIVIDEND PAYMENT DATES: Quarterly in arrears on each March, June, September, and December, beginning December , 2013, and from and including September, 2023 at an annual floating rate equal to three-month USD LIBOR plus [ ]%, payable quarterly in arrears on each on each March, June , September, and December, beginning December , 2023. OPTIONAL REDEMPTION: Citigroup may redeem the Preferred Stock (i) in whole or in part, from time to time, on any dividend payment date on or after September, 2023, or (ii) in whole but not in part at any time within 90 days following a Regulatory Capital Event, in each case at a cash redemption price equal to 100% of the liquidation preference, plus any declared and unpaid dividends, and without accumulation of any undeclared dividends, to but excluding the redemption date. Settle: 9/19/13. PRICED: USD900m 7.125% perpetual. First pay: 12/30/13 at USD25 per depositary share.
John Balassi Managing Analyst - IFR Markets Credit Thomson Reuters Phone: 646.223.7390 firstname.lastname@example.org www.ifrmarkets.com