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By Mike Gambale and Danielle Robinson
NEW YORK, Feb 10 (IFR) - BP Capital Markets received peakorders of US$8bn on Tuesday for a US$2.75bn multi-tranche deal,as investors rushed to grab the first chance this year to buy anoil major's bonds in bulk.
Bookrunners received large orders from a group of investorskeen to make a play on high-quality energy names like BP as thespreads on their outstanding bonds tightened after oil pricescame off their lows in the past week.
BP started out cheap at initial price thoughts offeringabout 20bp over comparables on two, three and five-year fixedand floating rate notes. This premium had disappeared by thetime the deal was launched - a tightening that resulted in morethan a few drops in orders, for a final book of US$6.5bn.
"There is a view among some accounts on this sector that theprice of oil has bottomed," said one banker. "Not everyone is sobullish, which is probably why you saw so many drops as thespread tightened."
BP's outstanding 2020s have rallied about 10bp in the pastweek and about 20bp since mid-December.
BP was one of eight borrowers raising US$8.78bn on Tuesday,bringing the week's tally to US$21.03bn. The average NIC fell tojust 2.86bp as accounts looked to put inflows to work in amarket which has seen less supply than expected so far thisyear.
Also driving demand for deals on Tuesday was a strong bidfrom Europe and Asia, as non-US investors look to buy intodollar deals that are higher yielding than corporate bonds ineuros.
Deutsche Bank was able to attract US$5bn of demand forUS$2.5bn three-year fixed and floating rate notes, almost 40% ofwhich came from Europe and Asia.
DB was able to pull in pricing on its senior unsecured by10bp to price at 90bp, or 7bp of NIC.
Citi built a US$4.6bn peak book for a US$2bn five-year andpriced flat to 1bp wider than comparables, as investors lookedto get into a rallying bank sector.
"There's been quite a bit of tightening," said one bankercovering financials. "the new KeyBank 20s were 7bp tighter thantheir reoffer at 80bp yesterday and Morgan Stanley's 2020s arenow 20bp better from their pricing level at the end of January."
Lazard Group was a huge hit, offering a US$400m 10-year thatwas tightened by 35bp from IPTs to launch and priced flat tocomps, on books of US$1.2bn.
BP CAPITAL MARKETS
BP Capital Markets plc, expected ratings A2/A (n/n),announced a US$ benchmark 4-part SEC-Reg senior unsecured noteoffering via Credit Agricole, Goldman Sachs, Mizuho and RoyalBank of Scotland. Structure will consist of a 2-year (2/10/2017)FRN, a 3-year (2/13/2018) FXD and/or FRN and a 5-year(2/13/2020) FXD. UOP: GCP. Settlement date 2/13/2015.
IPTs: 2-year FRN 3mL+50-55bp, 3-year FXD T+85bp area, 3-yearFRN 3mL+equivalent, 5-year FXD T+100bp area.
PRICE GUIDANCE: 2yr FRN 3mL+40bp area, 3yr FXD T+70bp area,3yr FRN Libor equiv, 5yr FXD T+85bp area. Area is +/- 5bp.
LAUNCH: US$2.75bn 4-part. US$400m 2yr FRN at 3mL+35bp,US$850m 3yr FXD at T+65bp, US$250m 3yr FRN at 3mL+42.5bp,US$1.25bn 5yr FXD at T+80bp.
PRICED: US$2.75bn 4-part total.
- US$400m 2yr (2/10/2017) FRN. At 100, floats at 3mL+35bp.
- US$850m 1.674% 3yr (2/13/2018) FXD. At 100, yld 1.674%.T+65bp. MWC+10bp
- US$250m 3yr (2/13/2018) FRN. At 100, floats at 3mL+42.5bp.
- US$1.25bn 2.315% 5yr (2/13/2020) FXD. At 100, yld 2.315%.T+80bp. MWC+12.5bp
BOOK: US$6.5bn final, US$8bn peak.
NIC: 3-year FXD: -2bp (using a 15bp 3/5s curve; FV=G+63bp)
5-year FXD: 2bp (vs. 2.521% '20 at G+78bp)
COMPS: (3/5s curve worth 15-20bp)
2.521% January 15, 2020 at G+78bp
3.535% November 4, 2024 at G+125bp
CITIGROUP
Citigroup Inc, Baa2/A-, announced a US$1bn SEC registered5-year (2/18/2020) senior note offering. Citi is the solebookrunner. UOP: GCP.
IPTs: T+105-110
PRICE GUIDANCE: T+98bp area (+/- 3bp)
LAUNCH: US$2bn (upsized from US$1bn) at T+95bp.
PRICED: US$2bn 2.40% 5yr (2/18/2020). At 99.780, yld 2.447%.T+95bp.
BOOK: US$4bn (US$4.6bn peak)
NIC: 1bp
COMPS:
2.500% July 29, 2019 at G+94bp
DEUTSCHE BANK
Deutsche Bank AG (London), A3/A/A+, announced a US$benchmark SEC registered 2-part senior unsecured note offeringthat consists of a 3-year (2/13/2018) fixed and/or FRN. Deutscheis the sole bookrunner. Settle: 2/13/2015.
IPTs: 3yr FXD T+100bp area, 3yr FRN Libor equiv
PRICE GUIDANCE: 3yr FXD T+90bp area, 3yr FRN 3mL+68bp area
LAUNCH: US$2.5bn 2-part. US$2bn 3yr FXD at T+90bp, US$500m3yr FRN at 3mL+68bp.
PRICED: US$2.5bn 2-part.
- US$2bn 1.875% 3yr (2/13/2018) FXD. At 99.881, yld 1.916%.T+90bp.
- US$500m 3yr (2/13/2018) FRN. At 100, floats at 3mL+68bp.
BOOK: US$4.75bn (peak north of US$5bn)
NIC: 7bp (add 8bp for maturity extension; FV=G+83bp)
COMPS:
1.350% May 30, 2017 at G+75bp
LAZARD GROUP LLC
Lazard Group LLC, Ba1/BBB+/BBB+, announced a US$400m (nogrow) SEC-Reg 10-year senior note offering. Citigroup is anactive bookrunner, with Goldman Sachs as passive bookrunner.
Co-manager is LAZARD. UOP: together with cash on hand, toredeem or otherwise retire $450 million of its outstanding 6.85%Senior Notes due June 15, 2017, and to pay fees and expensesrelated to the foregoing. BIZ: Lazard, one of the world`spreeminent financial advisory and asset management firms,operates from 43 cities across 27 countries in North America,Europe, Asia, Australia, Central and South America.
IPT: T+215bp area
PRICE GUIDANCE: T+180-185bp
LAUNCH: US$400m at T+180bp
PRICED: US$400m 3.75% 10-yr (2/13/2025). At 99.718, yld3.784%. T+180bp. 1st pay: 9/01/2015.
BOOK: US$1.2bn
NIC: flat (5/10s curve worth 35bp; FV=G+180bp)
COMPS:
4.250% November 14, 2020 at G+145bp
ERAC USA FINANCE LLC
ERAC USA Finance USA LLC (ENTERP), Baa1/BBB+, announced aUS$400m 144a/RegS 30-year (2/15/2045) senior notes. The activebookrunners include Goldman Sachs, JP Morgan and Royal Bank ofCanada, with Mitsubishi as a passive bookrunner. The notes areguaranteed by Enterprise Holdings Inc; CoC: 101%; Par call: 6months prior to maturity. UOP: GCP.
IPTs: T+220bp area
LAUNCH: US$500m (upsized from US$400m) at T+200bp
PRICED: US$500m 4.500% 30yr (2/15/2045). At 98.848, yld4.571%. T+200bp.
BOOK: US$3.25bn
NIC: 7bp (vs. 5.625% '42 at T+195bp; subtract a couple ofbasis points for high dollar price, FV=T+193bp)
COMPS:
7.000% October 15, 2037 at T+210bp (US$135)
5.625% March 15, 2042 at T+195bp (US$116)
AFFILIATED MANAGERS GROUP
Affiliated Managers Group Inc (AMG), A3/BBB+, announced a$300m SEC registered long 10-year (8/01/2025) senior unsecurednotes. The active bookrunners include Bank of America, Citigroupand JP Morgan, with Deutsche Bank, Mitsubishi, Royal Bank ofCanada and Wells Fargo as the passive bookrunenrs. The notescontain a MWC. UOP: to repay a portion of currently outstandingindebtedness under our revolving credit facility and for GCP.Pricing expected today. Settle: 2/13/2015.
IPTs: T+170bp area
PRICE GUIDANCE: T+160bp (the #)
LAUNCH: US$350m (upsized from US$300m) at T+160bp
PRICED: US$350M 3.5% 10yr (8/01/2025). At 99.239, yld3.588%. T+160bp.
BOOK: US$1bn
NIC: 5bp (vs. Outstanding 4.25% '24s at G+155bp)
COMPS:
4.250% February 15, 2024 at G+155bp
JOHNS HOPKINS
The John Hopkins University, Aa2/AA/AA+, announced a US$165m2-part 3(a)4 exempt from SEC registration 2015 Series A taxablebonds that includes a US$15m 7/01/2018 bullet and a US$150m7/01/2045 term bond. The active bookrunners include GoldmanSachs and JP Morgan. Co-mgr: MS. The notes contain a MWC.Settle: 2/18/2015.
IPTs: 3yr T+45bp area vs 3yr in 2018, 30yr T+125bp area vsOLB in 2045
PRICE GUIDANCE: T+98bp area (+/- 3bp)
LAUNCH: US$165m 2-part. US$15m 3yr at T+45bp, US$150m 30yrat T+118bp.
PRICED: US$165m 2-part total
- US$15m 1.477% 3yr (7/01/2018). At 100, yld 1.477%. T+45bp.MWC+10bp.
- US$150m 3.753% 30yr (7/01/2045). At 100, yld 3.753%.T+118bp. MWC+20bp.
BOOK: 3-year: 1.7x oversubscribed
30-year: 2.5x oversubscribed
THIRD POINT
Third Point Re (USA) Holdings Inc., rated BBB- by A.M. Best,announced a US$ 10-year SEC-Reg senior unsecured notes viaCredit Suisse and Deutsche Bank. Covenants include a CoC,ratings step, limitation on leverage. UOP: To fund the initialcapitalization of Third Point Re (USA) Holdings Inc.'s whollyowned insurance subsidiary. BIZ: Third Point Reinsurance Ltd isa property and casualty reinsurance company.
IPT: 7.00% area
LAUNCH: US$115m at 7.00%
PRICED: US$115m 7% 10-year. At 100, yld 7%. MWC+50bp
BOOK: Undisclosed (Reporting by Mike Gambale and Danielle Robinson; Editing byShankar Ramakrishnan)
