US IG CLOSE-Two high-grade deals raise US$10.5bn

By Mike Gambale

NEW YORK, July 15 (IFR) - Below is a recap of primary issuance activity in the US high-grade market on Wednesday:

Number of deals priced: 2

Total (Swiss: FP.SW - news) issuance volume: US$10.5bn

Average new issue concession: 12

Average book to cover: 2.77

IMPERIAL TOBACCO FINANCE

Imperial Tobacco Finance PLC (IMTLN), Baa3/BBB, announced a US$ benchmark 144/RegS (w/o reg rights) 4-part senior unsecured note offering that includes a 3-year (7/20/2018), 5-year (7/21/2020), 7-year (7/21/2022), and 10-year (7/21/2025). Active bookrunners include Bank of America, BNP Paribas (Xetra: 887771 - news) , HSBC and Mizuho. Guarantor: Imperial Tobacco Group PLC and Imperial Tobacco Limited. Covenants: Change of Control, and the notes contain a MWC and a 2mo par call on the 7yr tranche and 3mo par call on the 10yr tranche. Coupon Step: one-time 125bps step-up if Moody's or S&P downgrades sub-IG (LSE: IGG.L - news) .

Use of Proceeds: To refinance a portion of the aggregate borrowings drawn under the committed bank facilities used to fund the Acquisition, and to reduce the aggregate commitments under the Facilities Agreement and for General Corporate Purposes. Settlement T+4 (Jul 21, 2015).

IPTs:3yr T+135-140bp, 5yr T+165-170bp, 7yr T+205-210bp, 10yr T+225-230bp

PRICE GUIDANCE: 3yr T+120-125bp, 5yr T+155-160bp, 7yr T+195-200bp, 10yr T+215-220bp

LAUNCH: US$4.5bn 4-part. US$500m 3yr at T+120bp, US$1.25bn 5yr at T+155bp, US$1.25bn 7yr at T+195bp, US$1.5bn 10yr T+215bp

PRICED: US$4.5bn 4-part deal.

- US$500m. Cpn 2.05%. Due 7/20/2018. Ip US$99.503. Yld 2.221%. T+120bp. MWC T+20bp.

- US$1.25bn. Cpn 2.95%. Due 7/21/2020. Ip US$98.917. Yld 3.185%. T+155bp. MWC T+25bp.

- US$1.25bn. Cpn 3.75%. Due 7/21/2022. Ip US$98.385. Yld 4.016%. T+195bp. MWC T+30bp.

- US$1.5bn. Cpn 4.25%. Due 7/21/2025. Ip US$97.886. Yld 4.515%. T+215bp. MWC T+35bp.

BOOK: US$11bn total

NIC (NasdaqGS: EGOV - news) : 3-year: 10bp (3/5s curve worth 33bp, FV=G+110bp)

5-year: 12bp (vs. 3.25% '20s at G+143bp)

7-year: 15bp (7/10s curve worth 20bp, FV=G+180bp)

10-year: 15bp (vs. 4.45% '25s at G+200bp)

COMPS:

RAI (Baa3/BBB-) 3.250% June 12, 2020 at G+143bp

RAI (Baa3/BBB-) 4.450% June 12, 2025 at G+200bp

RAI (Baa3/BBB-) 5.850% August 15, 2045 at T+250bp

WELLS FARGO & CO

Wells Fargo & Co announced a US$ benchmark SEC registered multi-part offering that includes a 5-year (7/22/2020) Fixed and/or FRN senior holdco (A2/A+/AA-) and a 12-year (7/22/2027) Fixed subordinate holdco (A3/A/A+). Wells Fargo is sole books on the deal. UOP: GCP. Settle: 7/22/2015.

IPTs: 5yr FXD T+110bp, 5yr FRN Libor equiv, 12yr T+205-210bp.

PRICE GUIDANCE: 5yr FXD T+100bp (the #), 5yr FRN Libor equiv, 12yr T+200bp (the #)

LAUNCH: US$6bn 3-part. US$2.75bn 5yr FXD at T+100bp, US$750m 5yr FRN at 3mL+88bp, US$2.5bn 12yr at T+200bp.

PRICED: US$6bn 3-part total.

- US$2.75bn 2.60% cpn 5yr FXD (7/22/2020). At 99.944, yld 2.612%. T+100bp. 1st pay: 1/22/16.

- US$750m 5yr FRN (7/22/2020). At 100, floats at 3mL+88bp. 1st pay: 10/22/15.

- US$2.5bn 4.30% cpn 12yr (7/22/2027). At 99.620, yld 4.341%. T+200bp. 1st pay: 1/22/16.

BOOK: US$11bn total

NIC: 5-year: 10bp (vs. 2.150% '20s at G+90bp)

12-year: 10bp (vs. 4.10% '26s at G+190bp)

5YR COMPS:

2.150% January 30, 2020 at G+90bp (holdco)

3.300% September 9, 2024 at G+130bp (holdco)

4.100% June 3, 2026 at G+190bp (sub) (Reporting By Michael Gambale; Editing by Varghese Joseph)