BP sells four tranches; CMS, Freddie Mac price; Canada primary quiet; Duke Energy softens

By Cristal Cody

Tupelo, Miss., Feb. 8 – U.S. high-grade bond deal action remained steady on Wednesday with four new reported offerings.

BP Capital Markets plc tapped the primary market with a $2.85 billion four-part sale of notes.

CMS Energy Corp. placed $350 million of long 10-year senior notes.

Bank Nederlandse Gemeenten NV came with $2.25 billion of two-year dollar notes.

Freddie Mac reopened its 1.5% three-year reference notes in a $500 million add-on.

In other activity, Citigroup, Inc. released additional details of its previously reported $750 million reopening of 30-year subordinated notes.

Also, Parker-Hannifin Corp. announced plans to price up to $2.5 billion of senior notes in private transactions to partially finance its acquisition of Clarcor Inc.

The Canadian investment-grade corporate bond market has been quiet since a Jan. 31 C$1 billion sale of seven-year notes from Morgan Stanley.

“January was a good month with probably C$8.5 billion in supply, but it has not continued into February,” a syndicate source said.

The Markit CDX North American Investment Grade index closed about 1 basis point weaker at a spread of 67 bps on Wednesday.

Duke Energy Corp.’s 2.65% senior notes due 2026 softened about 3 bps.

MPLX LP’s $2.25 billion of senior notes (Baa3/BBB-/BBB-), priced in two tranches on Tuesday, traded about 3 bps to 8 bps tighter than issuance.

BP prices $2.85 billion

BP Capital Markets priced $2.85 billion of notes (A2/A-/A) in four tranches on Wednesday, adding a floating-rate tranche to an earlier planned three-part deal, according to a market source.

The company sold $500 million of floating-rate notes due Aug. 14, 2018 at Libor plus 35 bps.

BP Capital Markets priced $500 million of a tap of its 2.315% notes due Feb. 13, 2020 at a spread of 65 bps over Treasuries.

The company originally sold $850 million of the notes on Feb. 10, 2015 at par to yield a spread of 80 bps over Treasuries. The total outstanding is $1.35 billion.

In the third tranche, BP Capital priced $1 billion of 3.224% notes due April 14, 2024 at a spread of Treasuries plus 110 bps.

The final $850 million tranche of 3.588% notes due April 14, 2027 priced at a Treasuries plus 125 bps spread.

The notes due 2018, 2020 and 2024 priced on the tight side of guidance, while the 10-year notes priced in line with talk.

BofA Merrill Lynch, Barclays, BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and MUFG were the bookrunners.

The notes are guaranteed by parent company BP plc.

BP Capital Markets is a financing arm of the London-based oil and gas company.

BNG sells $2.25 billion

Bank Nederlandse Gemeenten (Aaa/AAA/AA+) priced $2.25 billion of 1.5% two-year dollar notes on Wednesday at a spread of 44.25 bps over Treasuries, according to a market source.

BMO Capital Markets Corp., BNP Paribas Securities, Goldman, Sachs & Co. and Nomura Securities International, Inc. were the lead managers of the Rule 144A and Regulation S offering.

The banking services company is based in The Hague, Netherlands.

Freddie Mac taps notes

Freddie Mac priced a $500 million reopening of its 1.5% three-year reference notes at 100.057 to yield 1.48% via a competitive offering on Wednesday, according to a news release.

The notes are due Jan. 17, 2020.

The reopening was conducted via an internet-based Dutch auction. The bid-to-cover ratio on the deal was 3.95 to 1.

Freddie Mac originally sold $3 billion of the notes on Jan. 12 at 99.892 to yield 1.537%. The total outstanding is $3.5 billion.

The government-backed mortgage lender is based in McLean, Va.

CMS in primary

CMS Energy sold $350 million of 3.45% senior notes due Aug. 15, 2027 at 99.851 to yield 3.467% on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa2/BBB/BBB) priced with a spread of 110 bps over Treasuries.

BNP Paribas Securities, J.P. Morgan Securities LLC, Mizuho Securities USA Inc., MUFG and RBC Capital Markets LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The parent company of electric and gas utility subsidiaries is based in Jackson, Mich.

Citigroup details add-on

Citigroup released additional details of its previously reported $750 million reopening of 4.75% 30-year subordinated notes (Baa3/BBB/A-) in an FWP filing with the SEC on Wednesday.

The notes due May 18, 2046 priced at 99.742 to yield 4.766% and a spread of 173 bps over Treasuries on Tuesday.

The notes priced to the tight side of guidance in the Treasuries plus 175 bps area, plus or minus 2 bps, according to a market source.

Citigroup Global Markets Inc. was the bookrunner.

Citigroup originally sold $1 billion of the notes on May 11, 2016 at 98.927 to yield 4.818%, or Treasuries plus 225 bps. The total outstanding now is $1.75 billion.

Citigroup is a financial services company based in New York.

Duke Energy eases

Duke Energy’s 2.65% notes due 2026 eased about 3 bps in secondary trading to 104 bps bid, a source said on Wednesday.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps plus Treasuries.

The diversified energy company is based in Charlotte, N.C.

MPLX firms

MPLX’s 4.125% notes due March 1, 2027 were seen early Wednesday at 172 bps offered in the secondary market, a source said.

The $1.25 billion tranche of 10-year notes priced on Tuesday at a spread of Treasuries plus 175 bps.

MPLX’s 5.2% notes due March 1, 2047 tightened to 212 bps offered in secondary trading.

The company sold $1 billion of the 30-year notes in Tuesday’s offering at Treasuries plus 220 bps.

MPLX is a Findlay, Ohio-based owner, operator and developer of crude oil pipeline and midstream assets in the United States.

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