In the fourth offering so far in July totaling $3 billion or more, eBay launched a $3 billion, four-part offering of SEC-registered senior notes at the narrow end of guidance levels, including $250 million of 2015 notes at T+40, $1 billion each of 2017 notes at T+75 and 2022 notes at T+110, and $750 million of 30-year bonds at T+145, sources said.
After no June offerings were in excess of the $2.75 billion placed by Wells Fargo on June 20, today’s $3 billion issue follows Yankee jumbo offerings this month for Anheuser-Busch InBev ($7.5 billion), Takeda Pharmaceutical ($3 billion), and Sumitomo Mitsui Banking ($3 billion).
Alongside the smallest individual tranche sizes of the year last month, average total offering sizes shrank to $862 million in June, from $1.4 billion in May and a year-to-date average of $1.2 billion, according to LCD data.
Talk levels for the eBay deal points to reoffer yields of 0.7%, 1.36%, 2.61%, and 4.06%, respectively. As reported, prints at those levels would establish a new record low at the three-year tenor, below the 0.72% for IBM 0.55% notes due 2015 placed in early February at T+42, LCD data show. Implied reoffers for the longer tranches are all comfortably among the 10 lowest on record, including the fourth-lowest reoffer for a five-year issue, behind the 1.1% reoffer yield for 3M 1% notes due 2017 placed last month..
The company will easily best the already exceptionally low funding costs it garnered in October 2010, when it placed 0.875% notes due 2013 at T+42, 1.625% notes due 2015 at T+57, and 3.25% notes due 2020 at T+77. The three issues currently represent the only senior debt on the company’s balance sheet.
The company yesterday reported second-quarter earnings that were modestly above expectations, and reaffirmed third-quarter guidance.
Bookrunners for today’s A/A2 offering are Citi, Credit Suisse, Deutsche Bank, and J.P. Morgan. The 10-year tranche is callable at par from three months prior to maturity, while the 30-year bonds are callable at par from six months prior to maturity. – John Atkins