Union Pacific, Fifth Third, Nevada Power, Huntington Bancshares price; credit spreads recover

By Cristal Cody

Tupelo, Miss., Jan. 28 – Union Pacific Corp. led deal volume in the high-grade bond market on Tuesday with a $3 billion four-tranche offering of registered fixed-rate senior notes that priced tighter than talk.

Fifth Third Bank came by with $1.25 billion of fixed-rate notes in two parts.

Also on Tuesday, Nevada Power Co. sold $725 million of general and refunding mortgage notes in two tranches.

Huntington Bancshares Inc. tapped the primary market with a $750 million 10-year issue, while subsidiary Huntington National Bank also brought a $500 million offering of three-year senior notes.

The new high-grade issues bring week to date volume to more than $6 billion.

About $20 billion to $25 billion of high-grade volume was expected for the week with volume front-loaded ahead of the Federal Reserve’s monetary policy decision on Wednesday.

The Markit CDX North American Investment Grade 33 index recovered from Monday’s weakness to firm nearly 3 basis points to close Tuesday at a spread of 46.64 bps.

In other activity, QVC, Inc. started a roadshow on Tuesday for a $500 million split-rated offering of seven-year senior bullet notes (existing Ba2/existing BBB-/confirmed BBB-).

Also, Japan Finance Organization for Municipalities (A1/A+/) is holding a roadshow this week for a dual currency bond deal that includes Rule 144A and Regulation S dollar-denominated green bonds and a debut offering of euro-denominated notes.

Union Pacific prices $3 billion

In Union Pacific’s deal, $3 billion of registered fixed-rate senior notes (Baa1/A-/) were priced in four tranches on Tuesday, according to a market source.

A $500 million tranche of 2.15% notes due Feb. 5, 2027 priced at a spread of 60 bps over Treasuries, versus initial talk in the Treasuries plus 80 bps to 85 bps area.

Union Pacific sold $750 million of 2.4% notes due Feb. 5, 2030 with a Treasuries plus 80 bps spread.

The tranche was initially talked to price in the 95 bps to 100 bps area.

The company sold $1 billion of 3.25% notes due Feb. 5, 2050 at a spread of 115 bps over Treasuries, compared to initial guidance in the 130 bps to 135 bps spread area.

Finally, $750 million of 3.75% notes due Feb. 5, 2070 priced with a 165 bps over Treasuries spread. Initial price talk was in the 185 bps spread area.

Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

The railroad transportation company is based in Omaha.

Fifth Third Bank sells $1.25 billion

Fifth Third Bank priced $1.25 billion of fixed-rate notes (A3/A-/A-) in two parts on Tuesday, according to a market source.

A $650 million tranche of 1.8% notes due Jan. 30, 2023 priced at a spread of Treasuries plus 38 bps.

The notes were initially talked to price in the Treasuries plus 55 bps area.

Fifth Third Bank sold $600 million of 2.25% notes due Feb. 1, 2027 at a Treasuries plus 70 bps spread, compared to initial talk in the 90 bps over Treasuries area.

J.P. Morgan, Morgan Stanley, RBC Capital Markets LLC and Fifth Third Securities, Inc. were the lead managers.

Fifth Third Bank is a regional banking company based in Cincinnati.

Nevada Power brings two tranches

Nevada Power priced $725 million of general and refunding mortgage notes (A2/A+/) in two tranches on Tuesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $425 million tranche of 2.4% notes due May 1, 2030 priced at 99.74 to yield 2.429% and a spread of Treasuries plus 78 bps.

The notes were talked to print in the 95 bps to 100 bps spread area.

Nevada Power sold $300 million of 3.125% notes due Aug. 1, 2050 at 99.961 to yield 3.127%, or a Treasuries plus 102 bps spread.

Initial price talk was in the 115 bps to 120 bps over Treasuries area.

Barclays, BNP Paribas Securities Corp., Mizuho Securities USA Inc., PNC Capital Markets LLC, RBC Capital Markets and SunTrust Robinson Humphrey Inc. were the bookrunners.

The electric utility is a subsidiary of Las Vegas-based NV Energy, Inc.

Huntington Bancshares prices

Huntington Bancshares sold $750 million of 2.55% 10-year senior notes on Tuesday at a spread of 95 bps over Treasuries, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 112.5 bps area.

The notes (Baa1/BBB+/A-) priced at 99.597 to yield 2.596%.

Morgan Stanley, Credit Suisse Securities (USA) LLC, Huntington Investment Co., J.P. Morgan and RBC Capital Markets were the bookrunners.

Huntington Bancshares is a Columbus, Ohio-based regional bank holding company.

Huntington National Bank prints

Huntington National Bank (A3/A-/A-) sold $500 million of 1.8% three-year senior notes on the tight side of guidance at a spread of 38 bps over Treasuries on Tuesday, according to a market source.

Initial price talk was in the Treasuries plus 55 bps area with guidance tightened to the 40 bps spread area.

Morgan Stanley, Credit Suisse, J.P. Morgan and RBC Capital Markets were the bookrunners.

Huntington National Bank is part of Columbus, Ohio-based bank holding company Huntington Bancshares Inc.

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