By John Balassi
May 28 (IFR) – Three benchmark deals – including a jumbo
offering that was sidelined last week – were making the rounds
in the US primary high-grade market on Tuesday, as risk-appetite
was back in full effect amid supportive central bank liquidity
policies and upbeat economic reports.
On the economic front, consumer confidence strengthened in
May to the highest level since February 2008, while
single-family home prices posted their best annual gains in
nearly seven years. The data sent equity and credit prices
soaring, (Dow up 150 pts, CDX IG narrowed 2bp), while Treasury
yields hit their highest levels in 13 months. The 10yr (2.108%)
is currently quoted above the S&P; 500 yield.
Pfizer Inc, A1/AA/A+, announced a USD benchmark
multi-tranche SEC-registered senior unsecured note offering that
consists of a long 3-year fixed (1/15/17), a 5-year (6/15/18)
fixed and/or FRN, a 10-year fixed (6/15/23) and a 30-year
(6/15/43) fixed. The bookrunners include CS, Citi, GS and RBS.
Initial price talk was high 40s on the long 3yr, low 50s on the
5yr fixed (Libor equivalent on the FRN), high 80s on the 10yr
fixed, and 100bp area on the 30yr fixed.
Proceeds of the deal will be used for general corporate
purposes, including repayment at maturity of the EUR1.85bn
outstanding of the 3.625% notes due June 2013 and the repayment
of a portion of the outstanding 4.50% notes due February 2014
and 5.50% notes due February 2014, and the repayment of a
portion of the outstanding commercial paper.
Agrium Inc, Baa2/BBB, announced a USD benchmark
SEC-registered two-part offering that consists of a 10-year and
30-year senior unsecured notes. The notes contain a 101% put
upon COC and downgrade to below IG. The active books are BofAML,
RBS and Scotia. Proceeds of the deal will be used to fund
anticipated capital expenditures, to reduce outstanding
indebtedness under the short-term credit facilities and for GCP.
The Agrium books have gone over USD6bn, with price guidance
tightening to T+145bp area on the 10yr and T+175bp area on the
30yr (area +/- 5bp). Initial price thoughts had been T+160bp
area on the 10yr and T+190bp area on the 30yr.
Northrop Grumman Corp, Baa2/BBB, announced a USD
benchmark SEC-registered three-part offering that consists of a
5-year (6/01/18), a 10-year (8/01/23) and a 30-year (6/01/43)
senior notes.
Active joint books are WFS, Citi, JPM and RBS. Proceeds are
being used for GCP, including debt repayment, share repurchase,
pension plan funding, acquisitions and working capital. The debt
repayment may include the make-whole redemption of the
outstanding 3.7% 2014s and 1.85% 2015s.
U.S. Treasuries……….
U.S. Treasury outlook…
U.S. corporate bonds….
U.S. agencies………..
U.S. mortgage-backeds…
U.S. asset-backeds……
U.S. municipal bonds…
(Reporting by John Balassi; Editing by Marc Carnegie)
