High-grade deal action heavy; UBS, Duke Energy, Enterprise, Kraft, American Water price

By Cristal Cody

Tupelo, Miss., Aug. 7 – Investment-grade issuers flooded the primary market on Monday with several $1 billion-plus bond deals.

UBS Group Funding (Switzerland) AG priced $3.25 billion of notes in two parts.

Duke Energy Corp. sold $1.75 billion of senior notes in three tranches.

Enterprise Products Operating LLC came with $1.7 billion of 60-year fixed-to-floating rate junior subordinated notes in two parts.

Kraft Heinz Foods Co. sold $1.5 billion of floating-rate notes in three tranches on Monday.

American Water Capital Corp. sold $1.35 billion of senior notes in two parts.

Regions Financial Corp. tapped the primary market with a $1 billion deal.

Aetna Inc. placed $1 billion of 30-year senior notes.

Ares Capital Corp., CenterPoint Energy, Inc., CNA Financial Corp., Ecolab Inc., DDR Corp. and Paccar Financial Corp. also priced new notes.

Heavy supply is expected by market sources over the week with about $35 billion of issuance forecast.

The Markit CDX North American Investment Grade index was mostly unchanged on the day at a spread of 58 basis points.

UBS sells $3.25 billion

UBS Group Funding (Switzerland) priced $3.25 billion of notes (/A-/A) in two tranches on Monday, according to a market source.

UBS priced $1.25 billion of floating-rate notes due Aug. 15, 2023 at par to yield Libor plus 95 bps.

The company sold $2 billion of 2.859% six-year fixed-to-floating-rate notes at par to yield a spread of 105 bps over Treasuries.

UBS Securities LLC was the bookrunner.

UBS Group Funding is a Swiss financing arm and subsidiary of UBS Group AG.

Duke brings $1.75 billion

Duke Energy priced $1.75 billion of senior notes (Baa1/BBB+/BBB+) in three tranches on Monday, according to a market source and an FWP filed with the Securities and Exchange Commission.

Duke Energy priced $500 million of 2.4% five-year notes at 99.793 to yield 2.444% and a spread of 63 bps over Treasuries.

The company sold $750 million of 3.15% 10-year notes at a Treasuries plus 93 bps spread. The notes priced at 99.719 to yield 3.183%.

In the final 30-year tranche, Duke Energy priced $500 million of 3.95% notes at 99.598 to yield 3.973% and with a Treasuries plus 113 bps spread.

The notes priced on the tight side of talk.

Barclays, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and MUFG were the bookrunners.

Proceeds will be used to repay at maturity $700 million of 1.625% senior notes due Aug. 15, 2017, to repay commercial paper and for general corporate purposes.

Enterprise Products 60-year notes

Enterprise Products Operating sold $1.7 billion of fixed-to-floating rate junior subordinated notes due Aug. 16, 2077 (Baa2/BBB-/) in two tranches on Monday, according to a market source and an FWP filing with the SEC.

The company priced $700 million of 4.875% series D notes at par to yield a spread of Treasuries plus 298.6 bps.

The series D notes will convert to a floating-rate Aug. 16, 2022 of Libor plus 298.6 bps and will be reset quarterly.

Enterprise Products sold $1 billion of 5.25% series E notes at par to yield a Treasuries plus 299.2 bps spread.

The series E notes will convert Aug. 16, 2027 to a floating rate of Libor plus 303.3 bps and will be reset quarterly.

Citigroup Global Markets Inc., Barclays, Mizuho Securities USA Inc., MUFG, Credit Suisse Securities (USA), RBC Capital Markets, LLC, SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC were the bookrunners.

The notes will be guaranteed by Enterprise Products Partners LP.

Proceeds will be used for debt repayment and general company purposes.

The midstream energy services provider is based in Houston.

Kraft Heinz sells floaters

Kraft Heinz Foods priced $1.5 billion of floating-rate notes (Baa3/BBB-/) in three tranches on Monday, according to a market source.

The company sold $350 million of two-year floaters at Libor plus 42 bps.

Kraft Heinz priced $650 million of short four-year floaters at Libor plus 57 bps.

The $500 million tranche of five-year floating-rate notes priced at Libor plus 82 bps.

The notes priced on the tightest side of guidance.

Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co., Morgan Stanley & Co. LLC and Wells Fargo Securities were the bookrunners.

The notes are non-callable.

Proceeds will be used to repay debt under the company's term loan facility, to refinance some commercial paper borrowings and for other general corporate purposes.

Kraft Heinz is a Chicago-based food company.

American Water Capital prints

American Water Capital sold $1.35 billion of senior notes (A3/A) in two tranches on Monday, according to a market source and an FWP filing with the SEC.

The company priced $600 million of 2.95% 10-year notes at 99.671 to yield 2.988% and a spread of 73 bps over Treasuries.

American Water Capital brought $750 million of 3.75% 30-year notes to the primary market at 99.693 to yield 3.767%, or a spread of Treasuries plus 93 bps.

Both tranches priced on the tight side of guidance.

J.P. Morgan Securities, U.S. Bancorp Investments Inc., Wells Fargo Securities and MUFG were the bookrunners.

Proceeds will be used to lend funds to parent company American Water Works Co., Inc. and its subsidiaries, to repay $524 million of the issuer’s 6.085% senior notes due 2017 upon maturity on Oct. 15, 2017, to redeem up to $327 million of the issuer’s long-term debt securities due in 2018 and 2021, which have a weighted-average interest rate of 5.71%, to repay commercial paper obligations and for general corporate purposes.

The investor-owned water and wastewater utility is based in Voorhees, N.J.

Regions prices $1 billion

Regions Financial sold $1 billion of 2.75% five-year senior notes (Baa2/BBB/BBB) on Monday at 99.949 to yield 2.761% and a spread of 95 bps over Treasuries, according to an FWP filing with the SEC.

The company dropped a planned tranche of five-year floating-rate notes from the final sale.

Goldman Sachs, J.P. Morgan Securities, Morgan Stanley & Co. LLC, RBC Capital Markets and Regions Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Regions is a financial services company based in Birmingham, Ala.

Aetna sells $1 billion

Aetna priced $1 billion of 3.875% 30-year senior notes (/A/A-) on Monday at 99.682 to yield 3.893%, according to an FWP filing with the SEC.

The notes priced with a spread of Treasuries plus 105 bps.

J.P. Morgan Securities, BofA Merrill Lynch, Mizuho Securities USA Inc. and Morgan Stanley were the bookrunners.

Proceeds will be used to repay portions of the company's 1.5% senior notes due 2017 and floating-rate senior notes due 2017 and for general corporate purposes.

Aetna is a health care benefits company based in Hartford, Conn.

Ares Capital in primary

Ares Capital sold $750 million of 3.5% senior notes due Feb. 10, 2023 (/BBB/BBB) on Monday at 99.921 to yield 3.516%, according to a press release and a 497AD filing with the SEC.

The notes priced with a spread of Treasuries plus 170 bps.

BofA Merrill Lynch, J.P. Morgan Securities, SunTrust Robinson Humphrey Inc. and RBC Capital Markets were the bookrunners.

The New York specialty finance company intends to use the proceeds to repay debt under its revolving credit facility.

CenterPoint sells notes

CenterPoint Energy priced a $500 million offering of 2.5% five-year senior notes on Monday at a spread of 70 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/BBB) priced at 99.971 to yield 2.506%.

Barclays, Goldman Sachs, Morgan Stanley and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes.

CenterPoint Energy is a public utility holding company based in Houston.

CNA Financial prices

CNA Financial (Baa2/BBB/BBB+) priced $500 million of 3.45% 10-year senior notes on Monday at 99.773 to yield 3.477%, according to an FWP filed with the SEC.

The notes priced with a spread of Treasuries plus 122 bps.

Barclays, Wells Fargo Securities, Citigroup Global Markets, Credit Suisse Securities (USA), J.P. Morgan Securities, BofA Merrill Lynch and U.S. Bancorp Investments were the bookrunners.

Proceeds will be used to repay at maturity the company’s $150 million of 6.95% senior notes due Jan. 15, 2018 and repurchase, redeem, repay or otherwise retire its $350 million of 7.35% senior notes due Nov. 15, 2019. The insurance company is based in Chicago.

Ecolab prices tight

Ecolab sold $500 million of 2.375% five-year notes (Baa1/A-/) on Monday on the tight side of guidance, according to a market source.

The notes priced with a spread of Treasuries plus 57 bps, compared to talk in the 60 bps area.

The bookrunners were BofA Merrill Lynch, Credit Suisse Securities (USA) and Wells Fargo Securities.

Proceeds will be to repay some commercial paper borrowings, for the company’s planned acquisition of Laboratoires Anios and for general corporate purposes.

The cleaning and sanitizing company is based in St. Paul, Minn.

DDR prices $350 million

DDR sold $350 million of 3.9% seven-year senior notes (Baa2/BBB-/BBB-) on Monday at 99.703 to yield 3.949% and a spread of Treasuries plus 187.5 bps, according to an FWP filing with the SEC.

The bookrunners were Citigroup Global Markets, Goldman Sachs, U.S. Bancorp Investments and J.P. Morgan Securities.

Proceeds will be used to redeem all $300 million of the company’s 7.875% notes due 2020 and for general corporate purposes.

DDR is a Beachwood, Ohio-based real estate investment trust that owns and manages shopping centers.

Paccar brings $300 million

Paccar Financial (A1/A+/) sold $300 million of 2.3% series O five-year medium-term notes at 99.934 to yield 2.314% and a spread of Treasuries plus 50 bps on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced on the tight side of talk.

BofA Merrill Lynch, Lloyds Securities Inc., RBC Capital Markets, U.S. Bancorp Investments, Williams Capital Group, LP, ANZ Securities, Inc. and Westpac Capital Markets, LLC were the bookrunners.

Paccar Financial is a financing arm of Bellevue, Wash.-based Paccar Inc.

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