By John Balassi
Aug 7 (IFR) - A benchmark trade from Dutch oil and gas giantShell International led the way Wednesday in the US high-gradebond market, which shrugged off the tapering worries weighing onequities with another session of robust issuance.
Five issuers in all came to market looking to take advantageof the renewed stability in Treasury yields following lastweek's dovish FOMC meeting and a benign July payrolls number.
Borrowers are anxious to take advantage of the stablebackdrop and get in before the typical late-summer slowdownexpected at the back end of the month. Six of the eight tranchesannounced today had tenors of greater than five years, a signthat investors are again comfortable with longer-dated paperdespite some recent ups and downs in rates.
"There is a good bid for the long end of the market, withinvestors driving the issuance," one syndicate manager told IFR."Issuers are therefore more comfortable with these types ofdeals, as they have been well-received."
Shell International Finance BV has been the star ofthe day, launching a USD3.75bn three-tranche offering thattightened approximately 5bp to 7bp across the curve. TheUSD1.5bn 5-year came at T+55bp, the USD1bn 10-year at T+83bp andthe USD1.25bn 30-year at T+92bp.
The notes are guaranteed by Royal Dutch Shell, with proceedsto be used for general corporate purposes. The activebookrunners are Barclays, Deutsche Bank and Morgan Stanley.
Hospira Inc, a maker of injectable drugs, announceda USD benchmark SEC-registered two-part offering that consistsof 7-year and 10-year senior unsecured notes. Proceeds of thedeal, led by Goldman Sachs, JP Morgan and Morgan Stanley, willrepay existing debt.
Australia's Macquarie Bank has mandated Bank of AmericaMerrill Lynch, Citigroup, HSBC and its own syndication team asjoint bookrunners for a 3-year 144A/Reg S US dollar benchmarkbond. The new August 2016 is expected to price in New Yorktoday. Price guidance was 145bp area over Treasuries.
The other longer-dated deals are a USD350m 10.5-yearSEC-registered offering from Moody's Corporation, theparent of the ratings agency, which has set price guidance atT+235-240bp, and a no-grow USD285bn 30-year first mortgage bondfrom US power provider International Transmission Company. Thetrade has price guidance of T+100bp. (Reporting by John Balassi; Editing by Marc Carnegie)
