By John Balassi
May 7 (IFR) - Ten high-grade issuers took the plunge in theUS primary market on Tuesday, encouraged by a broad risk-on toneprovided by global central bank actions and surprisingly decenteconomic data from the eurozone.
Corporate issuers hardly need more encouragement in thislow-rate environment -- investment-grade yields closed Mondaynear a record low yield-to-worst of 2.66%. But the positivetechnical backdrop has ensured that borrowers have no reason tostay on the sidelines in a market brimming with investmentliquidity.
On display on Tuesday are issuers from the financial sector,emerging markets, home-grown US companies and Yankees.
BP Capital Markets plc, A2/A, launched a USD3bnSEC-registered three-part senior unsecured notes that consistsof a USD1.25bn 5-year fixed at T+68bp, a USD250m 5yr FRN atL+51bp and a USD1.5bn 10-year fixed at T+108bp. The bookrunnersare Mizuho, BAML, CACIB, MUS, MS and SOCGEN. Proceeds are beingused for general corporate purposes. Price guidance wasT+70-75bp on the 5yr fixed, 3mL equivalent on the 5yr FRN, and110-115bp on the 10yr fixed.
Nordea Bank AB, Aa3/AA-/AA-, announced a USDbenchmark 144A/Reg S multi-part offering that consists of a3-year (5/13/16) fixed and FRN, and a 5-year (5/15/18) fixednote. Citi, BAML, GS and JPM are the bookrunners. Proceeds arebeing used for general corporate purposes. Price guidance isT+62.5bp area (+/- 2.5bp) on the 3yr fixed, Libor equivalents onthe 3yr FRN, and T+90bp area (+/- 2bp) on the 5yr fixed.
Citigroup Inc, Baa3/BBB+/BBB+, announced a USDbenchmark 10-year subordinated notes offering via Citi as solebookrunner. The notes will rank subordinate and junior toCitigroup's senior subordinated notes. Price guidance is T+170bparea (+/- 2bp), which tightened in from initial price thoughtsof T+190bp area.
Fomento Economico Mexicano, BBB+/A, the Mexicanholding company for various retail and beverage subsidiaries, isexpected to price a USD1bn two-part deal today that consists ofa USD300m 10-year and a USD700m 30-year. Leads are BBVA,Citigroup and Goldman Sachs. Proceeds are being used torefinance existing debt and for general corporate purposes.Revised price guidance is T+125bp (+/- 12.5bp) on the 10yr andT+150bp (+/- 5bp) on the 30yr.
Harvest Operations Corp, A1/A+/A+, launched aUSD620m 144A/Reg S 5yr unsecured notes at T+145bp. This hadtightened in from final price guidance of T+150bp area (+/-5bp).The notes are guaranteed by Korea National Oil Corporation. Thejoint bookrunners are BofAML, Barclays, HSBC and RBS. Bookorders are over USD3bn, and it is expected to price today.
SC Johnson & Son, A-/A-, launched a USD400m 144A/Reg S withno Reg rights 30-year senior note at T+110bp. The notes containa 101% put upon CoC and downgrade below IG. Active jointbookrunners are BAML, Barc and Citi. Following pricing, thecompany will make an offer to exchange the outstanding 6.75%senior notes due 2028 and the 5.75% senior notes due 2033 for upto USD225m aggregate principal amount of the new security andcash. Price guidance was T+115bp area (+/- 5bp).
Public Service Electric & Gas Co, A1/A/A+,announced a USD500m (no grow) SEC-registered 10-year (5/15/23)secured MTN, Series I. MWC until 3mo prior to maturity, par callthereafter. Bookrunners are Mizuho, BNP, MUS and Scotia.Proceeds are being used to add to general funds of PSE&G andGCP. Price guidance is T+65bp area (+/- 2 bp).
Leaseplan Corp NV, Baa2/BBB+/A-, announced aUSD500m 144A/Reg S 5-year note. Bookrunners are RBS, Citi,HSBC and JPM. Proceeds are being used for general corporatepurposes. Price guidance of T+185bp.
Hyatt Hotels Corp, Baa2/BBB, announced a USD350m10-year senior notes containing a CoC put at 101. GS, JPM andSTRH are the active bookrunners. Use of proceeds includes theredemption of the 2015 notes and the assumed purchase ofapproximately USD54m of 2019 notes in the cash tender offer.Price guidance is T+170bp area (+/- 5bp).
Banco del Estado de Chile, Aa2/AA-/A+, is outwith a USD200m will-not-grow tap of its 2% November 9 2017, withinitial price thoughts at 1.90% area. Pricing is expected today.The senior unsecured bond is being sold under a 144A/RegSformat. Bookrunners are Citigroup, Deutsche Bank, HSBC andJPMorgan. Price talk is 1.80%-1.85%.
U.S. Treasuries..........
U.S. Treasury outlook...
U.S. corporate bonds....
U.S. agencies...........
U.S. mortgage-backeds...
U.S. asset-backeds......
U.S. municipal bonds... (Reporting by John Balassi; Editing by Marc Carnegie)
BP (BP.)
