Huge response to high-quality trades on busy issuance day

By Danielle Robinson

NEW YORK, Feb 24 (IFR) - Eli Lilly, Chevron and Kimberly-Clark were flooded with a total US$30bn of orders for US$8.7bn of new bonds as investors welcomed the opportunity to buy benchmark sized trades from such high-quality issuers.

Eli Lilly received a staggering US$14bn of orders for a US$2.2bn acquisition financing, Chevron US$12bn for a US$6bn six-tranche transaction and Kimberly-Clark US$4bn for US$500m of bonds split evenly between five and 10-year paper.

Their deals were part of a flurry of transactions from eight borrowers on the day, raising US$11.9bn and taking the week's tally so far to US$18.2bn.

The huge order books meant that Eli Lilly and Kimberly-Clark both ended up pricing deals with negative new issue concessions, while Chevron paid just 5bp for its three and five-year fixed rate notes and negative 2.5bp for a seven-year.

Meanwhile, TCF National Bank was seen paying about 25-30bp in liquidity premium because its 10-year subordinated deal, at US$150m, isn't big enough to be index eligible.

TCF got its deal done, nonetheless, on another very strong day for high grade.

Other notable deals included Apollo Investment Corp, an affiliate of Apollo Global Management (APO), which debuted in the senior unsecured market with a US$350m offering.

Westpac also issued a US$1.5bn five-year covered bond at MS+41bp, 3bp tighter than the MS+44bp pricing on Royal Bank of Canada's US$2bn covered that was priced in late January.

Kimberly-Clark raised US$500m of bonds to fill the funding gap on US$2.5bn of frozen pension funds it is selling off to Prudential (LSE: PRU.L - news) and MassMutual. Its move to offload obligations to insurance companies, and using debt to plug funding gaps as part of the deal, is the first of what bankers are hoping will be a flurry of similar transactions.

Nissan priced inside its comparables and 7-10bp inside of where similarly-rated Daimler Finance came on Monday.

CHEVRON

Chevron Corp (CVX), Aa1/AA, announced a US$ benchmark SEC registered multi-part senior unsecured note offering that includes a 2-year FRN (2/24/17), 3-year fixed and/or FRN (3/02/18), 5-year fixed and/or FRN (3/03/20), 7-year fixed and/or FRN (2/02/22). The active bookrunners are BAML, Barc and WFS, with GS (KSE: 078935.KS - news) , JPM and MS as the passive bookrunners.

The notes contain MWC on the fixed tranches and 1mo par call on teh 5yr tranche and a 2mo par call on the 7yr tranche. UOP: GCP, including refinancing a portion of existing commercial paper borrowings. Settle: 3/03/15.

IPTs: 2yr frn L +15a, 3yr T+50bp area (L +27a on float), 5yr T+60bp area (L +44a on float), 7yr T+75bp area (L +65a on float)

PRICE GUIDANCE: 2yr FRN 3mL+12.5bp area (+/- 2.5bp), 3yr FXD T+40-45bp, 3yr FRN Libor equiv, 5yr FXD T+50-55bp, 5yr FRN Libor equiv, 7yr FXD T+65-70bp, 7yr FRN libor equiv

LAUNCH: US$6bn 6-part. US$900m 2yr at 3mL+10bp, US$1.75bn 3yr FXD at T+40bp, US$550m 3yr FRN at 3mL+17bp, US$1.75bn 5yr FXD at T+50bp, US$700m 7yr FXD at T+62.5bp, US$350m 7yr FRN at 3mL+53bp.

PRICED: US$6bn 6-part total

- US$900m 2yr (2/24/17) FRN. At 100, floats at 3mL+10bp. 1st pay: 8/22/15.

- US$1.75bn 1.365% 3yr (3/02/18) FXD. At 100, yld 1.365%. T+40bp. MWC+7.5bp. 1st pay: 9/02/15.

- US$550m 3yr (3/02/18) FRN. At 100, floats at 3mL+17bp. 1st pay: 9/02/15.

- US$1.75bn 1.961% 5yr (3/03/20) FXD. At 100, yld 1.961% T+50bp. MWC+7.5bp. 1st pay: 9/03/15.

- US$700m 2.411% 7yr (3/02/22) FXD. At 100, yld 2.411%. T+62.5bp. MWC+10bp. 1st pay: 9/03/15.

- US$350m 7yr (3/02/22) FRN. At 100, floats at 3mL+53bp. 1st pay: 9/03/15.

BOOK: US$12bn

NIC (NasdaqGS: EGOV - news) : 3yr: 5bp, 5yr: 5bp, 7yr: neg 2.5bp

COMPS:

CVX 1.345% 11/15/17 T+50bp, G+20bp

CVX 1.718% 6/24/18 T+40bp G+35bp

CVX 2.193% 11/15/19 T+34bp

CVX 2.427% (old 7yr) 6/24/20 T+46bp G+41bp

CVX 2.355% 12/5/22 T+45bp G+65bp

CVX 3.191% (old 10yr) 6/24/23 T+53bp G+65bp

ELI LILLY

Eli Lilly & Company (LLY), A2/AA-/A, announced a US$ benchmark SEC registered 3-part senior unsecured note offering that includes a 3-year (3/01/18), 10-year (6/01/25), and 30-year (3/01/45). The active bookrunners include DB, GS, and MS, with BAML as the passive bookrunner.

UOP: To repay CP incurred to finance the Novartis (LSE: 0QLR.L - news) animal health acquisition. Optional Redemption: Make whole call on all tranches; 3-month par call on 10-year; 6-month par call on 30-year. Settle: 3/05/15.

IPTs: 3yr T+45bp area, 10yr T+100-105bp, 30yr T+135bp area

PRICE GUIDANCE: 3yr T+35bp area (+/- 3bp), 10yr T+85bp area (+/- 5bp), 30y T+120bp area (+/- 5bp)

LAUNCH: US$2.2bn 3-part. US$600m 3yr at T+32bp, US$800m 10yr at T+80bp, US$800m 30yr at T+115bp.

PRICED: US$2.2bn 3-part total.

- US$600m 1.25% 3yr (3/01/18). At 99.912, yld 1.28%. T+32bp. MWC+5bp. 1st pay: 9/01/15.

- US$800m 2.75% 10yr (6/01/25). At 99.807, yld 2.772%. T+80bp. MWC+15bp. 1st pay: 6/01/15.

- US$800m 3.70% 30yr (3/01/45). At 99.515, yld 3.727%. T+115bp. MWC+20bp. 1st pay: 9/01/15.

BOOK: US$14bn total

NIC: 3yr: neg 10bp.

10yr: neg 5bp; or flat to +3bp vs Merck (LSE: 0O14.L - news) 25s

30yr: Neg 5bp

COMPS:

1.95% 3/15/19 T+22bp G+42bp

MRK (A2/AA) 2.75% 2/10/25 T+77-80bp

4.65% 6/15/44 T+120bp

MRK (A2/AA) 3.7% 2/10/45 T+113bp

TUCSON ELECTRIC POWER COMPANY

Tucson Electric Power Company (FTSCN), Baa1/BBB+/BBB+, announced a US$250m 144A/RegS (w/ reg rights) 10-year (3/15/25) senior unsecured note offering.

The active bookrunners inlcude MUS, STRH and USB. Co-Mgrs: BNY/SCOTIA/BBVA/COMERICA (OTC BB: CMPWW - news) . Opt. Redemption: MWC until 3mo prior to maturity, par call thereafter. UOP: Repay ST debt and finance capex. Settle: 2/27/15.

IPTs: T+125bp area

PRICE GUIDANCE: T+115bp area (+/- 5bp)

LAUNCH:US$300m (upsized from $250m) at T+110bp.

PRICED: US$300m 3.05% 10yr (3/15/25). At 99.673, yld 3.088%. T+110bp.

BOOK: US$650m

COMPS:

Arizona Public Service (A3/A-/A-)

PNW 2.20% 01/20 +58/5YR G+62

PNW 3.35% 07/24 +85/10YR G+91

PNW 4.70% 01/44 +112/OLB $115

Baltimore Gas & Electric (A3/A-/BBB+)

EXC 3.35% 07/23 +72/10YR G+84

Pacific Gas & Electric (A3/BBB/A-)

PCG 3.40% 08/24 +95/10YR G+100

PCG 4.30% 03/45 +127/OLB $106

Indiana Michigan Power (Baa1/BBB/BBB)

AEP 3.20% 03/23 +83/10YR G+97

Appalachian Power Company (Baa1/BBB/BBB)

AEP 4.40% 05/44 +127/OLB $107

KIMBERLY-CLARK

Kimberly-Clark Corp (KMB), A2/A/A, announced a US$500m (no grow) SEC registered 2-part senior unsecured note offering that includes a 5-year (3/01/20) and 10-year (3/01/25). The active bookrunners include Citi, DB, JPM and MS. The notes contain a MWC. UOP: General corporate purposes, which may include stock repurchases, pension contribution payments and repayments of existing indebtedness. Settle: 2/27/15.

IPTs: 5yr T+55-60bp, 10yr T+85-90bp.

PRICE GUIDANCE: 5yr T+45bp area, 10yr T+75bp area. Area +/- 5bp.

LAUNCH: US$500m 2-part. US$250m 5yr at T+40bp, US$250m 10yr at T+70bp

PRICED: US$500m 2-part total.

-US$250m 1.85% 5yr (3/01/20). At 99.938, yld 1.863%. T+40bp. MWC+6bp. 1st pay: 9/01/15.

-US$250m 2.65% 10yr (3/01/25). At 99.712, yld 2.683%. T+70bp. MWC+11bp. 1st pay: 9/01/15.

BOOK: US$4bn ttl. 5yr: US$2bn, 10yr: US$2bn

NIC: 5yr: Neg 5bp (Neg 10bp with curve adjustment)

10yr: flat (neg 10bp with curve adjustment)

COMPS:

1.9% 5/2019s G+45bp

2.4% 6/23s G+70bp

NISSAN

Nissan Motor Acceptance Corp (NSANY), A3/A-, announced a US$ benchmark 144a/RegS (w/o reg rights) 2-part senior unsecured note offering that includes a 3-year and 5-year. Bookrunner Active: Barc, Citi. Passive: BAML, JPM, MIZ. The notes contain a MWC. UOP: Pay offering expenses and for gcp, including debt repayments and refinancings. Settlement T+5 (Mar 03, 2015).

IPTs: 3yr hi 60s, 5yr T+80bp area

PRICE GUIDANCE: 3yr T+55-57bp, 5yr T+70bp area (+/- 2bp)

LAUNCH: US$900m 2-part. US$400m 3yr at T+55bp, US$500m 5yr at T+68bp.

PRICED: US$900m 2-part total.

- US$400m 1.50% 3yr (3/02/18). At 99.956, yld 1.514%. T+55bp.

- US$500m 2.125% 5yr (3/03/20). At 99.915, yld 2.143%. T+68bp.

BOOK: US$2.05bn peak, US$1.55bn final.

3yr: US$950m peak, US$700m final.

5yr: US$1.1bn peak, US$850m final.

NIC:

3yr: flat-neg 5bp (after curve adjustment)

5yr: neg 3bp

COMPS:

NSANY 1.95 17 T+80 G+55bp $101.33

NSANY 2.35 19 T+55 G+71bp $100.93

DAIGR (A3/A-/A-)1.65% 3/2/18 T+65bp

DAIGR (A3/A-/A-) 2.25% 3/2/20 T+75bp

TCF NATIONAL BANK

TCF National Bank (TCB), Baa2/BBB-/BB+, announced a US$125m 3(a)2 exempt 10-year (2/27/25) subordinated bank notes. The active bookrunners include JPM and MS. UOP: General corporate purposes which may include capital to support asset growth and reducing long-term borrowings. The Notes are intended to qualify as Tier 2 capital of TCF Bank and TCF Financial under the capital adequacy rules established by the OCC and FRB, respectively, subject to applicable limitations. Settle: 2/27/15.

IPTs: hi 200s

PRICE GUIDANCE: T+275bp area (+/- 5bp)

LAUNCH: US$150m (upsized from US$125m) at T+270bp

PRICED: US$150m 4.60% 10yr (2/27/25). At 99.375, yld 4.679%. T+270bp. 1st pay: 8/27/15.

BOOK: US$250m

COMPS:

FHN 2.95% 2019 sr G+135bp. New FHN 10yr sr = T+175bp. Plus 60bp for sr/sub differential, plus 25-30bp for illiquidity premium = Fair Value for new TCF 10yr sub: = 265bp

WESTPAC

Westpac Banking Corp. (Aaa/AAA/AAA) 5yr covered bond (3/3/2020. Barclays (LSE: BARC.L - news) , Citigroup (NYSE: C - news) , RBC Capital Markets and Westpac Institutional Bank (144A/RegS only) are active bookrunners.

IPTS: MS+mid-40S

PRICE GUIDANCE: MS+41-42bp

LAUNCH: US$1.5bn at MS+41bp

PRICED: US$1.5bn 2.0% 5yr (3/03/20) covered. At 99.868, yld 2.008%. MS+41bp. T+57.7bp.

BOOK: US$2.3bn. barely any drops

NIC: flat to +2bp. 3bp inside RY 2020s MS+44bp

Comps:

WSTP 2.000% 05/19 T+37 Z (Other OTC: ZHLD - news) +35

NAB 2.125% 09/19 T+45 Z+38

CBA 2.000% 06/19 T+40 Z+37

BNS 2.125% 09/19 T+42 Z+35

TD 2.250% 09/19 T+43 Z+35

RY 2.200% 09/19 T+44 Z+36

RY 1.875% 02/20 T+52 Z+37 (from MS+44bp at end Jan)

APOLLO

Apollo Investment Corporation, BBB/BBB, announced a US$350m SEC registered 10-year (3/03/25) senior unsecured note offering. The active bookrunners include Barc and Citi, with BMO, CS, DB, JPM, STRH, and UBS (LSE: 0QNR.L - news) as the passive bookrunners. UOP: Repay outstanding indebtedness and general corporate purposes. Optional Redemption: MWC. Settlement: T+5.

IPTS: 5.375%-5.50%

LAUNCH:US$350m at 5.375%

PRICED: US$350m 5.25% cpn 10yr (3/03/25). At 99.043, yld 5.5375%. T+338.4bp

BOOK: US$425m

NIC: debut

COMPS:

ARCC (Ba1/BBB/BBB)3.875% 2019s T+235bp, G+235bp

FSIC (NR/BBB/BBB-)4.000% 2019s T+225bp, G+240bp

FSIC (NR/BBB/BBB-)4.250% 2020s T+260bp, G+264bp

PSEC (BBB/NR) 5.875% 2023s at T+337bp, G+348bp (Reporting by Danielle Robinson; editing by Shankar Ramakrishnan)