AbbieVie brings $16.7 billion deal; AT&T, Microsoft improve; Exxon, Canadian Pacific Rail soft

By Aleesia Forni and Cristal Cody

Virginia Beach, May 5 – AbbVie Inc. was met with overwhelming demand for a new $16.7 billion megadeal that priced on Tuesday to help fund its acquisition of Pharmacyclics, Inc.

Tranches of the new six-part offering sold between 15 basis points to 20 bps tight of initial price thoughts.

“It went very, very well,” a market source said, noting that the deal’s order book reached nearly $60 billion.

The behemoth trade is the third-largest investment-grade new issue of the year, falling behind Actavis Inc.’s $21 billion offering priced in March and AT&T Inc.’s $17.5 billion trade in April.

In other primary happenings on Tuesday, the market hosted Corning Inc., which sold $750 million of notes in three- and seven-year tranches, and Public Service Co. of Colorado, which offered $250 million of 10-year mortgage bonds.

In forward calendar news, Sweden announced price guidance for a planned three-year offering of notes expected to price on Wednesday.

Investment-grade bonds were mixed over the session.

AT&T’s bonds (Baa1/BBB+/A-) traded better.

Verizon Communications Inc.’s notes were mostly unchanged in the secondary market.

In other trading, Microsoft Corp.’s 2.7% notes due 2025 firmed 2 bps.

Exxon Mobil Corp.’s 2.709% notes due 2025 eased 3 bps over the day.

Canadian Pacific Railway Co.’s 2.9% notes due 2025 traded 4 bps weaker.

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