Yahoo Finance 
September record issuance month after latest bond surge
By Shankar Ramakrishnan
Sept 25 (IFR) - A deluge of USD17.3bn in US investment-grade bond deals made September the biggest new issuance month ever on Wednesday, with USD139bn tallied so far and three sessions still to go.
Borrowers, whipped into an issuance frenzy by the Fed's non-taper surprise last week, are pulling forward deals that were scheduled as far away as next year, for fear that this might be the last time they see Treasury yields at current levels.
Issuance so far this week is now at USD28.713bn - the second busiest week this year.
Even so, signs of investor fatigue are emerging.
Syndicate managers reported deals were taking longer to get done, structures were being changed last minute to chase down the most liquid pools of demand, and issuers were unable to tighten pricing as much from initial price thoughts as they have been able to do of late.
Issuers should adopt a more defensive pricing approach going forward, said bankers, by putting out IPTs at wider levels and then pulling in pricing from there if the book size allows.
"Some issuers did not do that today, so the pushback immediately became evident," said one banker.
Nonetheless, the rush of deals is expected to continue.
"There was some pushback today, but that may not necessarily scupper the current issuance momentum because at the end of the day, the underlying tone is fairly positive," said another banker.
"Issuers are also mindful that rates are on their way up but at the moment, borrowing levels are still attractive - so they are unlikely to wait."
Highlights included BHP Billiton (NYSE: BBL - news) 's USD5bn offering of threes, fives, 10s and 30-year securities, which attracted a USD18bn order book. It moved pricing in by about 10bp-25bp from the IPT levels at final pricing.
Walmart's USD1.75bn two-part deal, however, attracted only USD3bn of orders. Meanwhile concessions were in the high single digits, after investors saw its stock plunge as much as 2.1% on a news report that it was cutting orders with some suppliers for this quarter and next.
AIG on the other hand paid just 2bp in concession for USD1bn in 10-year bonds, on orders of USD5bn. The company was able to tighten pricing by about 15bp from IPT levels.
Thursday is expected to bring at least USD5bn more of supply, according to some bankers.
BHP BILLITON
BHP Billiton Finance (USA) Ltd (BHP), A1/A+/A+ (s/s/s), announced a USD benchmark SEC registered four-part offering that consists of a 3-year FRN, 5-year, 10-year and 30-year senior notes. The notes are guaranteed by BHP Billiton Ltd and BHP Billiton plc.
The active bookrunners are Barclays (LSE: BARC.L - news) , Goldman Sachs (NYSE: GS-PB - news) and JP Morgan (Other OTC: MGHL - news) . UOP: general corporate purposes. Settle: T+3.
IPTs: 3-year FRN 3ml+50bp area, 5-year T+95bp area, 10-year T+135bp area, and 30-year T+150bp area
PRICE GUIDANCE: 3-year FRN 3mL+30 area, 5-year T+75bp area, 10-year T+130bp area, 30-year T+135bp area. Area = +/- 5bp
LAUNCH: USD5bn 4-part deal
- USD500m 3-year FRN at 3mL+25bp
- USD500m 5-year fixed at T+70bp
- USD1.5bn 10-year at T+125bp
- USD2.5bn 30-year at T+130bp
PRICED: USD5bn 4-part deal
- USD500m. Cpn 3mL+25bp. Due 9/30/16. Ip par. Yld 3mL+25bp
- USD500m. Cpn 2.05%. Due 9/30/18. Ip 99.854. Yld 2.081%. T+70bp. MWC T+15bp
- USD1.5bn. Cpn 3.85%. Due 9/30/23. Ip 99.877. Yld 3.865%. T+125bp. MWC T+20bp
- USD2.5bn. Cpn 5.00%. Due 9/30/43. Ip 99.985. Yld 5.001%. T+130bp. MWC T+20bp
BOOK SIZE: USD18bn total
NIC (NasdaqGS: EGOV - news) : 5-year: 5bp; 10-year: 4bp; 30-year: 37bp
COMPS: BHP Billiton 5.4% 2017 at G+65bp BHP Billiton 2.875% February 2022 at G+121bp BHP Billiton 4.125% February 2042 at T+93bp
WALMART
Wal-Mart Stores, Aa2/AA/AA (s/s/s), announced a USD benchmark SEC-Reg issue via BofA Merrill Lynch, Deutsche Bank (LSE: 0H7D.L - news) , RBS (LSE: RBS.L - news) . Structure will consist of a long 5-year (12/15/2018) and 30-year (10/2/2043). Optional redemption on 30-year at par six months prior to maturity. UOP: GCP. Settlement date 10/02.
IPTs: 5-year T+60-65bp, 30-year T+105bp area
PRICE GUIDANCE: 5-year T+60-65bp and 30-year T+110bp area (+/- 3bp)
LAUNCH: USD1.75bn total
- USD1bn 5-year at T+60bp
- USD750m 30-year at T+110bp
PRICED: USD1.75bn total
- USD1bn. Cpn 1.95%. Due 12/15/2018. Ip 99.810. Yld 1.988%. T+60bp
- USD750m. Cpn 4.75%. Due 10/2/2043. Ip 99.304. Yld 4.794%.T+110bp
BOOK SIZE: USD3bn total
NIC: 5-year: 9-12bp (adding 10bp to 2018s for curve extension); 30-year: 7bp-8bp (fair value around 102bp)
COMPS: WMT 1.125% April 2018 at T+23bp, G+38bp WMT 4.00% April 2043 at T+90bp WMT 2041s at T+103bp WMT 2040s at T+100bp
ENBRIDGE (Toronto: ENB.TO - news)
Enbridge Inc., Baa1/A- (s/s), USD benchmark SEC-registered 3-year (10/1/2016) and 10-year senior unsecured offering. The 3-year FRN will be led via JP Morgan (Other OTC: JPYYL - news) , Citigroup (NYSE: C - news) , HSBC (LSE: HSBA.L - news) (active), Bank of America Merrill Lynch, Deutsche Bank, Morgan Stanley (Xetra: 885836 - news) (passive). The 10-year tranche will be sold via BofA Merrill Lynch, JP Morgan, Deutsche Bank, Morgan Stanley (active), Citigroup, HSBC (passive). Make-whole call and par call 3-months prior to maturity. UOP: For capital expenditures and GCP. Settlement date T+5 (10/02).
IPTs: mid high 60s/high 130s
PRICE GUIDANCE: 3-year FRN 3mL+65bp and 10-year fixed T+150bp
LAUNCH: USD1.15bn 2-part
- USD350m 3-year FRN at 3mL+65bp
- USD800m 10-year fixed at T+150bp
PRICED: USD1.15bn 2-part
- USD350m. Cpn 3mL+65bp. Due 10/1/2016. Ip par. Yld 3mL+65bp
- USD800m. Cpn 4.00%. Due 10/1/2023. Ip 99.001. Yld 4.123%. T+150bp. MWC T+25bp
BOOK SIZE: 10-year USD1.5bn, 3-year USD950m
NIC: 10-year: 15bp (after accounting for rating differential)
COMPS: TRPCN (A3/A-) 2.5% 08/2022 T+93bp, G+115bp USD91.871
AIG
American International Group (NYSE: AIG - news) , Inc, Baa1/A-/BBB (s/n/s), announced a USD benchmark SEC registered long 10-year (2/15/2024) senior note. The notes contain a make-whole call. The active bookrunners are Barclays, Deutsche Bank, Goldman Sachs and Morgan Stanley. UOP: general corporate purposes. Settle: T+5 (10/2/13)
IPT: T+165bp area
PRICE GUIDANCE: T+155bp area (+/- 5bp)
LAUNCH: USD1bn at T+150bp
PRICED: USD1bn 4.125% 10-year (2/15/24). At 99.937, yld 4.133%. T+150bp. 1st pay: 2/15/14
BOOK SIZE: USD5bn
NIC: 2bp
COMPS: AIG 4.875% 2022s at T+124bp, G+148bp AIG 3.375% 2020s at T+134bp, G+129bp
ROGERS COMMUNICATION
Rogers Communications Inc (NYSE: RCI - news) (RCICN), Baa1/BBB+/ BBB+ (s/s/s), announced a USD benchmark SEC registered two-part offering that consists of 10-year and 30-year senior unsecured notes. The notes are guaranteed by Rogers Communications Partnership.
The notes also contain a make-whole call and a 3-month par call prior to maturity and 6mo par call prior to maturity on the 30-year. The active bookrunners are BofAML, Citi and JP Morgan. UOP: general corporate purposes. Settle: T+5 (10/02/13).
IPTs: 10-year T+155bp area and 30-year T+180bp area
PRICE GUIDANCE: 10yr at T+155bp area, 30yr at T+180bp area. Area = (+/-5bps)
LAUNCH: USD1.5bn total
- USD850m 10-year at T+150bp
- USD650m 30-year at T+180bp
PRICED: USD1.5bn total
- USD850m 4.10% 10-year (10/01/2023). At 99.813, yld 4.123%. T+150bp MWC+25bp. 1st pay: 4/01/2014
- USD650m 5.45% 30-year (10/01/2043). At 99.401, yld 5.491%. At T+180bp. MWC+30bp. 1st pay: 4/01/2014
BOOK SIZE: USD3.8bn total. 10-year USD2bn, 30-year USD1.8bn
NIC: 10-year: 11bp; 30-year: 17bp
COMPS: Rogers 3% March 2023 at G+139bp Rogers 4.5% March 2043 at T+163bp
KOREA HYDRO & NUCLEAR POWER
Korea Hydro and Nuclear Power (A1/A+/AA-) announced a US$500m five-year Reg S/144A. Leads are Citigroup, Deutsche Bank, Goldman Sachs and UBS (Berlin: UBRA.BE - news) .
IPTs: T+170bp
PRICE GUIDANCE: T+160bp/165bp
LAUNCH: USD500m at plus 160bp
PRICED: USD500m. Cpn 2.875%. Due 10/2/18. Ip 99.405. Yld 2.892%. T+160bp. Settlement date 10/02
BOOK SIZE: USD1.6bn
NIC: 10bp
COMPS: Korea Hydro 3% 2022 at G+154bp Korea Gas (KSE: 036460.KS - news) 2.875% 2018 at G+150bp
BMO
Bank of Montreal (Toronto: BMO.TO - news) (BMO), Aa3/A+/AA- (s/s/s), announced a USD benchmark SEC registered two-part offering that includes a 2-year (9/30/2015) FRN and long 5-year (1/25/2019) senior unsecured notes. The active bookrunners are BMO, Credit Suisse (NYSE: CS - news) , Goldman Sachs and JP Morgan. UOP: general corporate purposes. Settle: T+3 (9/30/2013).
IPTs: 2-year T+30bp area and 5-year T+105bp area
PRICE GUIDANCE: 2-year FRN 3mL+27bp area (+/- 2bp) and long 5-year T+100-105bp
LAUNCH: USD2.5bn 2-part
- USD1.5bn 2-year (9/24/2015) FRN at 3mL+25bp
- USD1.0bn 5-year fixed at T+100bp
PRICED: USD2.5bn 2-part. Settlement date 09/30
- USD1.5bn. Cpn 3mL+25bp. Due 9/24/15. Ip par. Yld 3mL+25bp
- USD1.0bn. Cpn 2.375%. Due 1/25/19. Ip 99.972. Yld 2.381%. T+100bp
BOOK SIZE: USD5.3bn total. 2-year USD2.7bn; 5-year USD2.6bn
NIC: 11-12bp (after adjusting for swap curve which makes fair value on a straight five year around T+88bp)
COMPS: BMO 1.75% April 2014 G+19bp BMO 1.3% October 2014 G+17bp BMO 0.8% November (Xetra: A0Z24E - news) 2015 at G+52bp, Z+40bp BMO 2.625% January 2016 at G+30bp, Z+51bp BMO 2.5% January 2017 at G+75bp BMO 1.45% April 2018 at G+77bp BMO 2.55% November 2022 at G+106bp
NEWS AMERICA
News America, Baa1/BBB+, announced a USD benchmark 144A w/reg rights 2-part offering that consists of a 10-year and 30-year. JP Morgan (active), BofA Merrill Lynch, Citigroup, Goldman Sachs, Morgan Stanley. Settle: 9/30/13.
IPTs: 10-year T+160bp area and 30-year T+190bp area
PRICED: USD1bn total
- USD300m 4.0% 10-year (10/01/2023). At 99.397, yld 4.074%. T+145bp. MWC+25bp. 1st cpn 4/01/2014
- USD700m 5.4% 30-year (10/01/2043). At 99.455, yld 5.437%. T+175bp. MWC+30bp. 1st cpn 4/01/2014
NIC: 10-year: 3bp; 30-year: 8bp
COMPS: FOXA 3.00% September 2022 at T+123bp, G+142bp FOXA 6.15% February 2041 at T+167bp
SOUTHERN CALIFORNIA
Southern California Edison, A1/A/A+ (s/s/s), announced a USD benchmark FMB SEC-Reg 3-part deal via Barclays, JP Morgan, Loop, Mitsubishi-UFJ (active), BNP Paribas (Milan: BNP.MI - news) , BNY, RBS, Wells Fargo (Other OTC: WFCNO - news) (passive).
Structure will consist of a 364-day (not countable), 10-year and 30-year tranches. Make-whole call applies, along with a par call three months on the 10-year, and six months on the 30-year. UOP: Repayment of debt and GCP. Settlement date T+5 (10/02).
IPTs: 10-year mid-hi 90s and 30-year T+110bp area
LAUNCH: USD1.6bn 3-part deal
- USD200m 364-day FRN at 3mL+5bp
- USD600m 10-year at T+90bp
- USD800m 30-year at T+100bp
PRICED: USD1.6bn total
- USD200m 1-year (10/01/2014) FRN. At 100, floats 3mL+5bp. 1st pay: 1/01/2014
- USD600m 3.50% 10-year (10/01/2023). At 99.824, yld 3.521%. T+90bp. MWC+15bp. 1st pay: 1/01/2014
- USD800m 4.65% 30-year (10/01/2043). At 99.312, yld 4.693%. T+100bp. MWC+15bp. 1st pay: 1/01/2014
BOOK SIZE: USD4.2bn total
- 1-year USD900m; 10-year USD1.4bn; 30-year USD1.9bn
NIC: 30-year: 10-15bp
COMPS: SOCALED 3.9% March 2043 at T+82bp
JACKSON NATIONAL
Jackson National Life Global Funding (JACLIF), A1/AA/AA (s/s/s), announced a USD250m 144a/Reg S (no reg rights) 5-year due 10/15/2018. The provider is Jackson National Life Insurance Company. The active bookrunners are UBS and USB. Settle: T+5 (10/01/2013).
IPTs: mid 90s
LAUNCH: USD350m 2-year FRN at 3mL+35bp. Note that the structure was changed from a 5-year fixed to a 2-year FRN
PRICED: USD350m. Cpn 3mL+35bp. Due 10/15/2016. Ip par. Yld 3mL+35bp
BOOK SIZE: Over USD400m
NIC: Flat (fair value versus Pricoa was seen at plus 35bp)
COMP Pricoa 2-year floater at T+25bp
DEUTSCHE ANNINGTON
Deutsche Annington Finance, Nr/BBB, announced a USD 144a/RegS 2-part deal via JP Morgan, Morgan Stanley. Structure will include a 4-year and 10-year. UOP: To repay debt under term loan and GCP. Settlement date 10/02.
PRICED: USD1bn 2-part deal
- USD750m. Cpn 3.20%. Due 10/2/17. Ip par. Yld 3.20%. T+180bp. MWC T+30bp
- USD250m. Cpn 5.00%. Due 10/2/23. Ip 98.993. Yld 5.13%. T+250bp. MWC T+40bp
BOOK SIZE: USD1.8bn
RLI Corp, Baa2/BBB+, announced a USD150m SEC registered senior note offering due 2023. The notes contain a make-whole call. JPM and KBW are the active bookrunners. UOP: repay USD100m 5.95% senior notes due Jan 2014 and for GCP.
PRICED: USD150m 4.875% 10-year (9/15/23). At 99.714, yld 4.912%. T+230bp. MWC+35bp. 1st cpn: 3/15/14
DEALS NOT COUNTED IN IFR LEAGUE TABLES:
Country Garden
Country Garden has launched its USD750m 7.5/NC4 issue to yield 7.25%, the tight end of guidance at 7.25% to 7.375% and through an initial 7.75%. Pricing in the New York morning via Goldman Sachs and JP Morgan (joint global coordinators as well as joint lead managers and bookrunners) and BoC International, HSBC and ICBC International.
PRICED: USD750m. Cpn 7.25%. Due 4/4/21 NC3. Ip par. Yld 7.25%. MWC T+100bp. Settlement date 10/04 (Reporting by Shankar Ramakrishnan; Additional reporting by Anthony Rodriguez and Mike Gambale; Editing by Marc Carnegie)
