Becton Dickinson sells $9.68 billion; Citizens, Simon, Coca-Cola price; credit spreads firm

By Cristal Cody

Tupelo, Miss., May 22 – Becton, Dickinson and Co. led the deal action on Monday with a $9,675,000,000 seven-part offering of senior notes.

The deal received split ratings from Moody’s Investors Service, which assigned the bulk of the notes a high-yield rating. Moody’s gave one tranche a high-grade rating.

Pricing activity was strong over the session and is expected to remain heavy for the rest of the shortened week.

Citizens Bank, NA came with $1.5 billion of notes in four tranches.

Simon Property Group, LP brought a $1.35 billion two-tranche offering of notes to the primary market.

Coca-Cola Co. placed $1 billion of senior notes in two tranches on Monday.

TC Pipelines, LP sold $500 million of 10-year senior notes.

Also, Norfolk Southern Corp. priced $300 million of 10-year senior notes.

Syndicate sources expect about $30 billion to $35 billion of supply for the week.

The Markit CDX North American Investment Grade index firmed about 2 basis points to close the day at a spread of 62 bps.

Becton Dickinson prices

Becton Dickinson sold $9,675,000,000 of senior notes in seven tranches on Monday, according to a market source.

The company priced $725 million of 2.133% two-year notes at a spread of Treasuries plus 85 bps.

The $1 billion tranche of 2.404% three-year notes was sold with a Treasuries plus 95 bps spread.

Becton Dickinson priced $500 million of five-year floating-rate notes at Libor plus 103 bps.

The company sold $1.8 billion of 2.894% five-year fixed-rate notes at a spread of 110 bps over Treasuries.

The $1.75 billion offering of 3.363% seven-year notes was placed with a Treasuries plus 130 bps spread.

Becton Dickinson brought the $2.4 billion tranche of 3.7% 10-year notes at a 145 bps spread over Treasuries.

In the final tranche, the company priced $1.5 billion of 4.669% 30-year notes at a spread of 175 bps over Treasuries.

Citigroup Global Markets Inc., BNP Paribas Securities Corp., Barclays, MUFG and Wells Fargo Securities, LLC were the bookrunners.

Proceeds from Monday’s offering will be used to help finance the cash portion of the company’s acquisition of C.R. Bard Inc. Proceeds also will be used to redeem various series of Becton Dickinson’s outstanding senior notes.

Becton, Dickinson announced in April it plans to acquire C.R. Bard for $24 billion in cash and stock. If the deal does not close on or before April 23, 2018, Becton Dickinson will be required to redeem all of the notes at 101, plus accrued and unpaid interest.

Moody’s Investors Service gave most of the deal Ba1 ratings with one tranche given a high-grade rating. Moody’s said it expects to also downgrade the Baa2 rating for the two-year notes to Ba1 if the transaction closes as currently proposed.

Becton, Dickinson is a medical technology company based in Franklin Lakes, N.J.

Citizens Bank sells $1.5 billion

Citizens Bank priced $1.5 billion of notes (Baa1/A-/BBB+) in four tranches on Monday, according to a market source.

Citizens Bank sold $250 million of three-year floating-rate notes at Libor plus 57 bps.

The company priced $500 million of 2.2% three-year fixed-rate notes at a spread of Treasuries plus 78 bps.

Citizens Bank placed $250 million of five-year floating-rate notes at Libor plus 81 bps.

The bank also sold $500 million of 2.65% five-year fixed-rate notes at a Treasuries plus 88 bps spread.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Citizens Capital Markets, Inc., J.P. Morgan Securities LLC, Mizuho and Morgan Stanley & Co. LLC were the bookrunners.

The bank is based in Providence, R.I.

Simon Group brings $1.35 billion

Simon Property Group priced a $1.35 billion two-tranche offering of notes (A2/A/) on Monday, according to a market source and FWP filings with the Securities and Exchange Commission.

The $600 million tranche of 2.625% five-year notes priced at 99.91 to yield 2.644% and a spread of Treasuries plus 85 bps.

Simon Property sold $750 million of 3.375% 10-year notes at 99.384 to yield 3.448%, or a Treasuries plus 120 bps spread.

Both tranches priced on the tight side of talk.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC, BBVA Securities Inc., Credit Suisse Securities (USA) LLC, Mizuho Securities USA LLC, Santander Investment Securities Inc., SG Americas Securities, LLC and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Proceeds will be used to fund the planned optional redemption of the company’s 5.65% notes due 2020 with any additional proceeds used for general corporate purposes.

Simon Property Group is an Indianapolis, Ind.-based real estate property owner and management company.

Coca-Cola prices $1 billion

Coca-Cola sold $1 billion of senior notes (Aa3/AA-/A+) in two tranches on Monday, according to a market source and an FWP filing with the SEC.

The company priced $500 million of 2.2% five-year notes at 99.802 to yield 2.242% and a spread of 45 bps over Treasuries.

Coca-Cola sold $500 million of 2.9% 10-year notes at 99.595 to yield 2.947%, or Treasuries plus 70 bps.

The notes priced on the tight side of guidance.

J.P. Morgan Securities LLC, BofA Merrill Lynch and Santander Investment Securities Inc. were the bookrunners.

Proceeds will be used to purchase any notes tendered and accepted in the company’s tender offer and to pay consent payments in connection with any accepted consents. Any remaining proceeds will be used for general corporate purposes.

Coca-Cola is an Atlanta-based beverage company.

TC Pipelines sells notes

TC Pipelines sold $500 million of 3.9% 10-year senior notes (Baa2/BBB-/) at par to yield a spread of 165 bps over Treasuries, according to a market source and an FWP filing with the SEC on Monday.

BofA Merrill Lynch and MUFG were the bookrunners.

The company announced on May 3 that it plans to purchase a 49.34% interest in Iroquois Gas Transmission System, LP from subsidiaries of TransCanada Corp., including an option to purchase an additional 0.66% interest.

If the company does not close the acquisition on or before Aug. 31, it will have the option to redeem all of the notes at 101, plus accrued and unpaid interest.

Proceeds from the deal will be used to pay a portion of the cash purchase price of the acquisition. If the acquisition is not completed, TC Pipelines will use the proceeds for general partnership purposes.

The Houston-based company is a natural gas pipeline company formed by TransCanada.

Norfolk Southern in primary

Norfolk Southern sold $300 million of 3.15% 10-year senior notes at a spread of 92 bps over Treasuries on Monday, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/) priced at 99.847 to yield 3.168%.

Citigroup Global Markets Inc. and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Norfolk Southern is a Norfolk, Va.-based freight railroad company.

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