By Shankar Ramakrishnan
Aug 7 (IFR) - Dutch oil and gas giant Shell added somepizzazz to proceedings in the US high-grade primary market onWednesday by pricing a USD3.75bn three-part transaction thatgarnered a whopping USD8.9bn order book.
In a day when broader market tone was again weaker, asworries about the Fed's tapering of the quantitative easingprogram weighed on equities, the deal from Shell showedthat high-grade appetite is not abating.
That said, the wider woes did appear to have some impact onthe pricing leverage that issuers had wrangled from investors inthe previous few sessions. The other four deals in the markettoday - from Moody's Corp, Macquarie Bank, Hospira and International Transmission - tightened very littlefrom IPTs to pricing.
But investors continued to be especially receptive toquality names coming to market with longer-tenor bonds.
"The market is really undersupplied in terms of high-qualitypaper in the long end, particularly from the oil majors thattend to stay shorter," said one banker.
Volume for the week has now topped the USD17bn mark andcould end up closer to USD20bn mark, with at least two or threemore deals expected on Thursday.
SHELL
Shell International Finance BV (RDSALN), Aa1/AA (s/s),announced a USD benchmark SEC-registered three-tranche offeringof 5-year, 10-year and 30-year senior unsecured notes. The notesare guaranteed by Royal Dutch Shell plc. The active bookrunnersare Barclays, Deutsche Bank and Morgan Stanley. UOP: generalcorporate purposes.
IPT: 5-year low 60s, 10-year +90bp area, 30-year +100bp area
PRICE GUIDANCE: 5-year at T+55-57bp, 10-year at T+85 area(+/-2bp), 30-year at T+92-94bp
LAUNCH: USD3.75bn total
- USD1.5bn 5-year at T+55bp
- USD1.0bn 10-year at T+83bp
- USD1.25bn 30-year at T+92bp
PRICED: USD3.75bn total
- USD1.5bn due 8/10/2018 at T+55bp (1.90%, 99.934, 1.914%yield)
- USD1.0bn due 8/12/2023 at T+83bp (3.40%, 99.790, 3.425%yield)
- USD1.25bn due 8/12/2043 at T+92bp (4.55%, 99.320, 3.492%yield)
BOOK SIZE: USD8.9bn
NIC: 5-year: 7bp; 10-year: 5bp; 30-year: 22bp
COMPS:
Shell 1.25% August 2017s at G+48bp
Shell 2.25% January 2023 at G+78bp
Shell 3.625% August 2042 at T+70bp
MOODY'S
Moody's Corporation, Nr/BBB+ (na/s), announced a USD350m10.5-year SEC registered deal via JP Morgan and Bank of AmericaMerrill Lynch. The notes contain a change of control put at 101%and a three-month par call prior to maturity. UOP: generalcorporate purposes.
IPT: Low 200s
PRICE GUIDANCE: T+235bp-240bp
LAUNCH: USD500m (upsized from USD350m) 10.5-year at T+235bp
PRICED: USD500m due 2/15/2024 at T+235bp (4.875%, 99.431,4.945% yield). MWC T+35bp. Pay 08/12.
BOOK SIZE: USD1.25bn
NIC: 22bp (after adding 8bp for the maturity extension)
COMPS:
Moody's 4.5% September 2022 at T+184bp, G+205bp (USD102.9)
MACQUARIE BANK
Macquarie Bank, A2/A/A, announced a three-year 144A/Reg S USdollar benchmark bond via joint bookrunners Bank of AmericaMerrill Lynch, Citigroup, HSBC and its own syndication team.
PRICE GUIDANCE: T+145bp area (+/- 2bp)
LAUNCH: USD1bn 3-year at T+143bp
PRICED: USD1bn due 8/15/2016 at T+143bp (2.00%, 99.965,2.012% yield). S/D 08/15
BOOK SIZE: USD2.4bn
NIC: negative 7bp (after adding 20bp 2s/3s curve topotential new Macquarie 2-year at T+130bp)
COMPS:
Macquarie 3.45% July 2015 at G+128bp (USD103)
HOSPIRA
Hospira Inc, Ba1/BBB-, announced a USD benchmarkSEC-registered two-part offering of 7-year and 10-year seniorunsecured notes. Change of control put at $101. The activebookrunners are GS, JPM and MS. UOP: repay existing debt.
IPT: Low to mid 300s on both
PRICE GUIDANCE: T+325bp for both the 7-year and 10-year
LAUNCH: USD700m total
- USD350m 7-year at T+325bp
- USD350m 10-year at T+325bp
PRICED: USD700m total
- USD350m due 8/12/2020 at T+325bp (5.20%, 99.751, 5.243%yield). MWC+50bp
- USD350m due 8/12/2023 at T+325bp (5.80%, 99.663, 5.845%yield). MWC+50bp
BOOK SIZE: USD2.9bn
NIC: 7-year: 7bp (after adding 15bp for 4s/7s curve)
COMPS:
Hospira 6.05% March 2017 at G+303bp (USD109)
INTERNATIONAL TRANSMISSION
International Transmission Company, A3/A- (s/s), announced aUSD285m (no grow) 144A/Reg S (no reg rights) 30-year firstmortgage bond. The notes contain a make-whole call and par call6 months prior to maturity. The active bookrunners are Barclaysand Goldman Sachs. UOP: to repay the USD185m term loan to repayamounts outstanding under the USD100m intercompany advanceagreement. Settle: T+5.
IPT: T+105bp-110bp
PRICE GUIDANCE: T+100bp area (+/- 5bp)
LAUNCH: USD285m at T+95bp
PRICED: USD285m due 8/15/2043 at T+95bp (4.625%, 99.839,4.635% yield). MWC+15bp
BOOK SIZE: USD900m
NIC: 5bp. Add 5bp to Consumers Energy 2023s for ratingdifferential.
COMPS:
Consumers Energy (A2/A-) 3.375% August 2023 at G+85bp (Reporting by Shankar Ramakrishnan; Additional reporting by theIFR team; Editing by Marc Carnegie)
