US IG CLOSE-Three high-grade borrowers raise US$10.655bn

By Mike Gambale

NEW YORK, June 10 (IFR) - Below is a recap of primary issuance activity in the US high-grade market on Wednesday:

Number of deals priced: 3

Total issuance volume: US$10.655bn

Average new issue concession: 2.13

Average book to cover: 2.80

CISCO SYSTEMS INC (Xetra: 878841 - news)

Cisco Systems Inc, expected ratings A1/AA- (s/s), announced a US$ benchmark SEC-Reg (Madrid: SL001.MC - news) 5-part senior unsecured notes via Citigroup (NYSE: C - news) , Credit Suisse (NYSE: CS - news) , Goldman Sachs (NYSE: GS-PB - news) , Morgan Stanley (Xetra: 885836 - news) and Wells Fargo (Swiss: WFC.SW - news) .

Structure will consist of a 3-year (6/15/2018) FXD/FRN, 5-year (6/15/2020) FXD, 7-year (6/15/2022) FXD and 10-year (6/15/2025) FXD. All fixed tranches will include make-whole calls.

UOP: General corporate purposes, including to return capital to shareholders pursuant to our previously-announced capital allocation strategy through the repurchase of shares of our common stock and the payment of cash dividends. Settlement date 6/17/2015.

IPTs: 3-year T+65bp area, 3-year FRN 3mL+equivalent, 5-year T+80bp area, 7-year T+105bp area, 10-year T+125bp area

PRICE GUIDANCE: 3yr FXD T+60bp area (+/- 5bp), 3yr FRN 3mL+36bp area (+/- 5bp), 5yr T+75bp area (+/- 5bp), 7yr T+90bp area (+/- 2bp), 10yr T+110bp area (+/- 2bp).

LAUNCH: US$5bn 5-part total. US$1.6bn 3yr FXD at T+55bp, US$900m 3yr FRN at 3mL+31bp, US$1.5bn 5yr at T+70bp, US$500m 7yr at T+88bp, US$500m 10yr at T+105bp.

PRICED: US$5bn 5-part total. 1st pay: 12/15/2015.

- US$1.6bn 1.65% cpn 3yr FXD (6/15/2018). At 99.983, yld 1.656%. T+55bp. MWC+10bp.

- US$900m 3yr FRN (6/15/2018). At 100, floats at 3mL+31bp

- US$1.5bn 2.45% cpn 5yr (6/15/2020). At 99.865, yld 2.479%. T+70bp. MWC+15bp.

- US$500m 3.0% cpn 7yr (6/15/2022). At 99.463, yld 3.086%. T+88bp. MWC+15bp.

- US$500m 3.50% cpn 10yr (6/15/2025). At 99.733, yld 3.532%. T+105bp. MWC+20bp.

BOOK: 12.1bn total

3-year FRN US$1.1bn

3-year FXD US$2.8bn

5-year FXD US$3.2bn

7-year FXD US$2bn

10-year FXD US$3bn

NIC (NasdaqGS: EGOV - news) : 3-year: 4bp (3/5s curve worth 15bp, FV=G+51bp)

5-year: 4bp (vs. 2.125% '19s at G+56bp, add 10bp for maturity differential, FV=G+66bp)

7-year: 6bp (7/10s curve worth 20bp, FV=G+82bp)

10-year: 3bp (vs. 3.625% '24s at G+91bp, add 11bp for maturity differential, FV=G+102bp)

COMPS:

1.100% March 3, 2017 at G+33bp

2.125% March 1, 2019 at G+56bp

2.900% March 4, 2021 at G+54bp

3.625% March 4, 2024 at G+91bp

ORCL (A1/AA-) 3.875% July 15, 2020 at G+61bp

ORCL (A1/AA-) 2.500% May 15, 2022 at G+85bp

ORCL (A1/AA-) 2.950% May 15, 2025 at G+104bp

IBM (Swiss: IBM.SW - news) (Aa3/AA-) 1.125% February 6, 2018 at G+44bp

IBM (Aa3/AA-) 1.625% May 15, 2020 at G+49bp

IBM (Aa3/AA-) 3.625% February 12, 2024 at G+110bp

AAPL (Aa1/AA+) 0.900% May 12, 2017 at G+22bp

AAPL (Aa1/AA+) 2.000% May 6, 2020 at G+48bp

AAPL (Aa1/AA+) 2.700% May 13, 2022 at G+71bp

BAT INTERNATIONAL FINANCE PLC

BAT International Finance PLC (BATSLN), A3/A-/A-, announced a US$ benchmark 144A/RegS 5-part senior unsecured note offering that includes a 3-year fixed and/or floating (6/15/2018), 5-year FXD (6/15/2020), 7-year FXD (6/15/2022), and 10-year (6/15/2025). Active bookrunners include Deutsche Bank (Xetra: 514000 - news) , Citigroup, HSBC and JP Morgan.

Guarantor British American Tobacco PLC, British American Tobacco Holdings (The Netherlands) B.V. and BAT International Netherlands Finance B.V. Special Redemption: 101% M&A call if Reynolds American (NYSE: RAI - news) has not completed acquisition of Lorillard (NYSE: LO - news) on or prior to January 15, 2016 (101 call only included on 2022 and 2025 Fixed Rate Notes.

The notes also contain a MWC. Use of Proceeds: To indirectly finance the subscription for Reynolds American shares and for GCP, including the repayment of debt. Settlement: T+3 (Jun 15, 2015).

IPTs: 3yr FXD T+100bp area, 3yr FRN Libor equiv, 5-year T+125bp area, 7yr T+155bp area, 10yr T+170bp area

PRICE GUIDANCE: 3yr FXD T+80bp area, 3yr FRN Libor equiv, 5yr T+105bp area, 7yr T+135bp area, 10yr T+155bp area. Area is +/- 5bp.

LAUNCH: US$4.5bn 5-part. US$750m 3yr FXD at T+75bp, US$500m 3yr FRN at 3mL+51bp, US$1.25bn 5yr at T+100bp, US$500m 7yr at T+130bp, US$1.5bn 10yr at T+150bp.

PRICED: US$4.5bn 5-part total.

- US$750m 1.85% cpn 3yr FXD (6/15/2018). At 99.942, yld 1.87%. T+75bp. MWC+12.5bp

- US$500m 3yr FRN (6/15/2018). At 100, floats at 3mL+51bp

- US$1.25bn 2.75% cpn 5yr (6/15/2020). At 99.842, yld 2.784%. T+100bp. MWC+15bp.

- US$500m 3.50% cpn 7yr (6/15/2022). At 99.908, yld 3.515%. T+130bp. MWC+20bp.

- US$1.5bn 3.95% cpn 10yr (6/15/2025). At 99.697, yld 3.987%. T+150bp. MWC+25bp.

BOOK: Total US$11.8bn

3-year FRN US$750m

3-year FXD US$2.5bn

5-year FXD US$2.8bn

7-year FXD US$2bn

10-year FXD US$3.75bn

NIC: 3-year: Flat (3/5s curve worth 25bp, FV=G+75bp)

5-year: Flat (5/7s curve worth 30bp, FV=G+100bp)

7-year: Flat (vs. 3.25% '22s at G+130bp)

10-year: Flat (7/10s curve worth 20bp, FV=G+150bp)

COMPS:

3.250% June 7, 2022 at G+130bp

MO (Baa1/BBB+) 2.625% January 14, 2020 at G+114bp

MO (Baa1/BBB+) 4.750% May 5, 2021 at G+122bp

MO (Baa1/BBB+) 2.950% May 2, 2023 at G+151bp

MO (Baa1/BBB+) 4.000% January 31, 2024 at G+160bp

LIMA METRO

Lima Metro Line 2 Finance Limited is out with a 19.1-year senior secured bond. The amortizing bond is being sold under a 144A/RegS format. It has a weighted average life of 12.8 years and principal grace period of 4.1 years. The listing will be in Luxembourg and the bond will be governed by New York law. Ratings are Baa1/BBB/BBB. Final maturity falls on July 5 2034.

Global coordinators are Citigroup, Morgan Stanley and Santander, while Banca IMI, Bank of America Merrill Lynch, BBVA, Credit Agricole, Natixis (Paris: FR0000120685 - news) and Societe Generale (Paris: FR0000130809 - news) are coming in as joint bookrunners. Co managers are Deutsche Bank and SMBC.

IPTs 6% area

GUIDANCE: US$1.146bn 19-year bond at 6% area (+/- 12.5bp)

LAUNCH: US$1.155bn 19-year bond at 5.875%

PRICED: US$1.155bn 19-year; par; 5.875%Y; CT10+337.8bp - maturity date July 5, 2034; WAL: 12.8 years.

BOOK: Just over US$2.5bn (Reporting By Michael Gambale; editing by Shankar Ramakrishnan)