Dow Chemical, British Sky price; Amphenol firms; Dow mixed; spreads ease

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 9 – The pace of issuance in the high-grade market continued on Tuesday, with more than $7.1 billion of supply pricing during the session.

Dow Chemical Co. and British Sky Broadcasting Group plc sold the day’s largest new issues, each pricing multi-tranche, $2 billion offerings at the tight end of price talk.

Many of the deals priced during the session were upsized from initial thoughts, including those priced by Air Lease Corp., National Penn Bancshares Inc., Amphenol Corp. and Hospitality Properties Trust.

Air Lease came to market with $1 billion of senior notes in two parts, while National Penn sold an upsized $125 million offering of 10-year notes.

Both new deals from Amphenol and Hospitality Properties sold tight of initial guidance.

Meanwhile, Buckeye Partners, LP priced a $600 million offering of notes in two tranches, and Verizon Communications Inc. issued $870 million of 30-year bonds.

Nederlandse Waterschapsbank NV was also in Tuesday’s market, pricing an offering of three-year notes on Tuesday at the tight end of price talk.

The week’s total new issuance sits at roughly $15 billion following two active days, nearly halfway to what sources had predicted to be a $30 billion week.

However, with the market showing some signs of fatigue following the onslaught of new issuance seen so far this month, that prediction may prove to be optimistic.

Investment-grade credit spreads continued the soft streak started on Monday and headed out about 2 basis points to 3 bps wider on the day, sources said.

The Markit CDX North American Investment Grade series 22 index eased 3 bps to a spread of 60 bps on Tuesday.

In the secondary market, Amphenol’s two-part offering firmed 2 bps after the notes were freed to trade, a trader said.

Air Lease’s 4.25% notes due 2024 traded wrapped around issuance, a trader said.

Buckeye Partners’ notes due 2024 eased 2.5 bps in aftermarket trading, a trader said. The company’s tranche of 5.65% notes due 2044 were not seen in late day trading.

Hospitality Properties’ 4.5% notes due 2025 firmed 1 bp over the afternoon, a trader said.

Dow Chemical’s three-part offering of notes was mixed at the end of the day, with the company’s long bonds quoted 4 bps wider, a trader said.

Dow Chemical brings $2 billion

Dow Chemical sold a $2 billion three-part offering of senior notes (Baa2/BBB/BBB) on Tuesday, according to a market source.

All three tranches of the offering sold at the tight end of price talk.

There was $900 million of 3.5% 10-year notes priced at 98.73 to yield 3.652%. The notes sold with a spread of Treasuries plus 115 bps. There was also $600 million of 4.25% notes due 2034 priced at 97.636 to yield 4.429%, or Treasuries plus 120 bps.

Finally, $500 million of 4.625% 30-year bonds sold at 98.338 to yield 4.729%, or Treasuries plus 150 bps.

Dow Chemical’s 3.5% notes due 2024 traded at 114 bps offered in aftermarket trading, a trader said.

The tranche of 4.25% notes due 2034 were quoted trading at 117 bps offered.

The company’s 4.625% notes due 2044 eased to 154 bps bid, 150 bps offered in the secondary market, the trader said.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities and RBS Securities Inc. are the bookrunners.

Proceeds will be used for general corporate purposes.

The specialty chemicals company is based in Midland, Mich.

British Sky new issue

In other primary action, British Sky Broadcasting Group priced $2 billion of senior notes (Baa1/BBB+/) in tranches due 2019 and 2024 on Tuesday, according to an informed source.

A $750 million tranche of 2.625% notes due 2019 sold at 99.851 to yield 2.657%, or Treasuries plus 90 bps.

Pricing was at the tight end of talk, which was set at Treasuries plus 90 bps to 95 bps.

There was also $1.25 billion of 3.75% 10-year notes sold at 99.62 to yield 3.796%, or Treasuries plus 130 bps.

The notes sold at the tight end of the Treasuries plus 130 bps to 135 bps talk.

Bookrunners were Barclays, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Societe Generale, BNP Paribas Securities Corp., BOCI, Santander Investment Securities Inc., Lloyds Securities LLC, RBS Securities, HSBC Securities, MUFG, Mizuho Securities, DnB NOR Markets Inc., UniCredit and SMBC.

The mass media, broadband and telecommunications company is based in London.

Air Lease upsizes

Air Lease sold an upsized $1 billion of senior notes (/BBB-/) in tranches due 2018 and 2024, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $500 million tranche of 2.125% notes due 2018 sold at 99.65 to yield 2.235%, or Treasuries plus 120 bps.

A $500 million tranche of 4.25% 10-year notes priced at Treasuries plus 185 bps. The notes sold at 99.196 to yield 4.35%.

Both tranches sold tighter than guidance.

Air Lease’s 4.25% notes due 2024 were quoted mostly unchanged in secondary trading at 185 bps bid, 181 bps offered, according to a trader.

Credit Suisse Securities (USA) LLC, JPMorgan, BofA Merrill Lynch, RBC Capital Markets, LLC, BMO Capital Markets Corp, BNP Paribas Securities, Citigroup Global Markets, Deutsche Bank Securities, Mizuho Securities, Morgan Stanley, RBS Securities, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used for general corporate purposes, which may include the purchase of commercial aircraft and the repayment of debt.

Air Lease is a Los Angeles-based aircraft leasing company.

Verizon offers 30-years

Verizon Communications issued $870 million of 4.8% 30-year bonds at par on Tuesday, according to an FWP filed with the SEC.

Verizon’s 4.8% notes due 2044 traded late afternoon versus the 2043 bond at 166 bps bid, 163 bps offered, a trader said.

E. Sun Commercial Bank Ltd. and MasterLink Securities Corp. were the underwriters.

Proceeds will be used for general corporate purposes, including refinancing debt.

Verizon is a New York City-based telecommunications company.

Amphenol prices tight

Also on Tuesday, Amphenol priced an upsized $750 million issue of senior notes (Baa1/BBB+/) in two tranches, according to a market source and an FWP filed with the SEC.

There was $375 million of 1.55% three-year notes sold at 99.898 to yield 1.585%, or Treasuries plus 55 bps.

The notes sold at the tight end of the Treasuries plus 60 bps area talk, which had firmed from earlier guidance in the low-70 bps area over Treasuries.

A second tranche was $375 million of 3.125% notes due 2021 sold with a spread of Treasuries plus 95 bps.

The notes sold at 99.912 to yield 3.139%.

Pricing was at the tight end of the Treasuries plus 100 bps area talk, which had tightened from initial guidance in the area of 115 bps area over Treasuries.

Amphenol’s 1.55% notes due 2017 firmed to 53 bps bid, 51 bps offered late in the day, a trader said.

The company’s 3.125% notes due 2021 tightened to 93 bps bid, 90 bps offered in aftermarket trading.

Proceeds will be used to repay the company’s $600 million of 4.75% senior notes due November 15, 2014, for general corporate purposes and to repay amounts outstanding under its credit facilities.

JPMorgan, MUFG, TD Securities (USA) LLC and Santander Investment Securities were the bookrunners.

The designer, manufacturer and marketer of electric, electronic and fiber optic components is based in Wallingford, Conn.

Buckeye Partners two-parter

Buckeye Partners sold $600 million of senior notes (Baa3/BBB-/BBB-) in tranches due 2024 and 2044 on Tuesday, according to a market source and an FWP filing with the SEC.

There was $300 million of 4.35% 10-year notes sold at 187.5 bps over Treasuries.

Pricing was at 99.825 to yield 4.371%.

A second tranche was $300 million of 5.6% 30-year bonds sold at 99.876 to yield 5.608%, or Treasuries plus 237.5 bps.

Both tranches sold on top of initial guidance.

Buckeye Partners’ 4.35% notes due 2024 eased to 190 bps bid in secondary trading, a trader said.

The company’s 5.6% notes due 2044 were not seen in aftermarket trading.

JPMorgan, Morgan Stanley, SunTrust Robinson Humphrey and Wells Fargo Securities were the active bookrunners. Passive bookrunners were Barclays, BNP Paribas Securities, Deutsche Bank Securities and RBC Capital Markets.

Proceeds will be used to acquire an 80% membership interest in the entity that owns Trafigura Terminals LLC, to fund the redemption of $275 million of the company’s 5.3% notes due Oct. 15, 2014 and for general partnership purposes.

The refined petroleum products pipeline system is based in Houston.

NWB Bank three-years

Nederlandse Waterschapsbank sold $1.5 billion of 1.25% three-year notes on Tuesday with a spread of mid-swaps plus 2 bps, according to a market source.

Pricing was at the tight end of talk, which was set in the area of mid-swaps plus 3 bps.

The notes sold at 99.974.

Citigroup Global Markets, BofA Merrill Lynch and TD Securities were the bookrunners.

The financial services company for the public sector is based in the Hague, the Netherlands.

Hospitality Properties offering

Hospitality Properties Trust priced an upsized $350 million of 4.5% senior notes (Baa2/BBB-/) due 2025 on Tuesday at Treasuries plus 215 bps, according to a market source and an FWP filed with the SEC.

The notes sold tighter than initial guidance.

Pricing was at 98.78 to yield 4.648%.

In the secondary market, Hospitality Properties’ 4.5% notes due 2025 firmed 1 bp to 214 bps bid, a trader said.

BofA Merrill Lynch, Citigroup Global Markets, RBC Capital Markets, UBS Securities LLC and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay amounts outstanding under the company’s revolving credit facility and for general business purposes.

The real estate investment trust is based in Newton, Mass.

National Penn upsizes

National Penn Bancshares sold an upsized $125 million offering of 4.25% senior notes due 2024 on Tuesday at par to yield Treasuries plus 175 bps, according to a market source and a company news release.

The company was expected to sell $100 million of notes.

Sandler O’Neill + Partners LP and Credit Suisse Securities are the bookrunners.

Proceeds will be used for general corporate purposes.

Located in Boyertown, Pa., National Penn Bancshares is the holding company for National Penn Bank.

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