Brighthouse Financial prices $3 billion; supply thins; Suntory deal ahead; energy bonds mixed

By Cristal Cody

Tupelo, Miss., June 15 – Brighthouse Financial Inc. priced a $3 billion two-part offering of senior notes on Thursday as the sole issuer in the investment-grade primary market.

Issuance has been light over the week and no volume was seen on Wednesday with the day’s focus on the Federal Reserve’s monetary policy announcement.

In other activity, FirstEnergy Corp. concluded a second day of investor calls on Thursday for an expected offering of notes.

Looking ahead to the upcoming week, Suntory Holdings Ltd. is preparing to hold investors calls and meetings for a Rule 144A and Regulation S deal.

In secondary market activity, Chevron Corp.’s senior notes (Aa2/AA-/) traded flat to modestly softer on Thursday.

Duke Energy Ohio, Inc.’s 3.7% first mortgage bonds due June 15, 2046 eased 3 basis points.

The Markit CDX North American Investment Grade index closed about 1 bp softer at a spread of 60 bps.

Brighthouse sells notes

Brighthouse Financial priced $3 billion of senior notes (Baa3/BBB+/BBB) in two tranches on Thursday, according to market sources.

The company sold $1.5 billion of 3.7% 10-year notes at a spread of Treasuries plus 155 bps.

Brighthouse Financial sold $1.5 billion of 4.7% 30-year notes at a Treasuries plus 195 bps spread.

Both tranches priced on the tight side of guidance and to strong demand. The 10-year notes had a final order book of $4.3 billion, while the 30-year bonds had a $3.9 billion book size.

BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

The notes are initially guaranteed by parent company MetLife Inc.

Proceeds will be used to pay a dividend to MetLife as part of MetLife’s distribution of Brighthouse stock and for general corporate purposes.

MetLife’s guarantee of the bonds will terminate upon its distribution of Brighthouse stock, according to S&P Global Ratings. If the distribution does not occur by Dec. 31, Brighthouse will be required to redeem the notes at 101 plus accrued and unpaid interest.

Charlotte, N.C.-based Brighthouse Financial is an insurance and annuity company launched in March as the separated U.S. retail business of MetLife.

FirstEnergy mulls offering

FirstEnergy (Baa3/BBB-/) wrapped a two-day round of investor calls on Thursday ahead of an expected dollar-denominated notes offering, according to a market source.

BofA Merrill Lynch, Barclays, J.P. Morgan Securities and Morgan Stanley & Co. LLC are the arrangers.

FirstEnergy is an electric utility based in Akron, Ohio.

Suntory eyes deal

Suntory Holdings (Baa2/BBB/) intends to hold U.S. investor calls on Monday and meetings on Tuesday for a Rule 144A and Regulation S dollar-denominated offering of five-year senior notes, a market source said.

Citigroup Global Markets Inc., J.P. Morgan Securities and Morgan Stanley are arranging the calls and meetings.

Suntory is an alcoholic beverage brewing and distillery company founded in 1899 and based in Tokyo.

Chevron mixed

Chevron’s 2.498% notes due March 3, 2022 eased 2 bps in secondary trading to 47 bps bid, according to a market source.

Chevron sold $700 million of the five-year notes on Feb. 28 at a Treasuries plus 60 bps spread.

Chevron’s 2.895% notes due March 3, 2024 were flat on the day at 66 bps bid.

The company priced $1 billion of the notes in the Feb. 28 offering at a spread of 70 bps over Treasuries.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

Duke Energy eases

Duke Energy Ohio’s 3.7% first mortgage bonds due June 15, 2046 (A2/A/) traded 3 bps softer on Thursday at 98 bps bid, according to a market source.

The bonds priced in a $100 million reopening on March 22 at a spread of Treasuries plus 107 bps.

The company originally sold $250 million of the bonds at a 125 bps spread over Treasuries on June 20, 2016.

The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a subsidiary of Duke Energy Corp.

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