Eight issuers led by Shell, Time Warner tap high-grade market

By Hillary Flynn

NEW YORK, May 5 (IFR) - A four-part deal from Royal Dutch Shell (LSE: RDSB.L - news) 's subsidiary led the charge on Thursday as a total eight high-grade issuers looked to take advantage of an improved broader market tone.

Shell International Finance (Aa2/A+) is issuing a benchmark four-part deal of bonds with tenors ranging from 3 years to 30.

Shell was last in the market in November when it raised US$5bn, and in May 2015 when it raised US$10bn.

The three-year bonds are being shown at Treasuries plus 75bp while the five-year is at 95bp, 10-year 130bp-135bp and 30-year 165bp-170bp.

"People are trying to jump back into the higher quality oil paper," said an investor who saw Shell's bonds getting a lot of interest given its expected large size and as oil prices have recovered from the lows touched earlier in the year.

Both of Shell's previous bonds were now trading close to their initial pricing levels.

"Shell's bonds, like every other bond tied to oil, had spreads blew out last year so trading anywhere close to where they priced is a positive," a second investor said.

Shell was not the only big name in the market on Thursday.

Time Warner (Xetra: AOL1.DE - news) is looking to sell 10-year bonds with initial price thoughts of 150bp-155bp while Estee Lauder is issuing a US$500m two-part deal of new five-year bonds and a 30-year tap.

Equifax (NYSE: EFX - news) also announced a US$500m five-year senior notes issue while PACCAR (NasdaqGS: PCAR - news) said it expects to sell US$500m three-year senior notes.

Barclays (LSE: BARC.L - news) and BNP Paribas (LSE: 0HB5.L - news) were out with subordinated notes issues, while Branch Banking & Trust is selling a four-part deal of three-year and five-year fixed and floating rate bonds.

Stocks were up early on Thursday and credit spreads, reflected by the CDX IG26, were tighter from Wednesday.

(Reporting by Hillary Flynn; editing by Shankar Ramakrishnan)