Lively primary brings week’s supply to over $33 billion; Morgan Stanley firms; Lowe’s flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 3 – The investment-grade primary market showed no signs of a slowdown on Wednesday following Tuesday’s onslaught of issuance.

Another packed primary session brought the week’s total to more than $33 billion of new issuance, already topping what sources had expected to be a $20 billion to $25 billion week.

Financial names made another strong showing on Wednesday, with Landwirtschaftliche Rentenbank, Bank Nederlandse Gemeenten NV, Ford Motor Credit Co. and Morgan Stanley & Co. Inc. pricing new deals.

JPMorgan Chase & Co., Abbey National Treasury and Standard Chartered also brought new issues to the primary market, though details of the sales were unavailable at press time.

The session also saw new deals from Simon Property Group LP, Camden Property Trust, Lowe’s Cos. Inc. and Marsh & McLennan Cos., Inc.

In forward calendar news, California Resources Corp. is planning to price a $5 billion issue of notes to fund an acquisition, while Fannie Mae announced price talk on Wednesday for a 10-year issue of Benchmark Notes.

Even with the deluge of new issuance the primary market has seen this week, one source noted that the market has shown “basically no signs” of fatigue.

The rush of issuance is not expected to slow as the week moves on, market sources said.

“Expecting mostly financial names this week,” the source said.

High-grade credit spreads were mostly unchanged on the day, according to a market source.

The Markit CDX North American Investment Grade series 22 index headed out flat at a spread of 57 basis points.

In the secondary market, Morgan Stanley’s new subordinated notes tightened more than 5 bps, a trader noted.

JPMorgan’s offering traded 1 bp softer in the secondary market.

The notes were quoted in aftermarket trading at 154 bps bid, 150 bps offered, a trader said.

Ford Motor Credit’s fixed-rate notes were quoted wrapped around issuance to 1 bp weaker.

Lowe’s notes headed out wrapped around issuance in aftermarket trading, a trader said.

In other new issue trading, Camden Property’s 3.5% notes due 2024 tightened 3 bps, according to a trader.

Simon Property’s two-part offering of notes was flat to 3 bps tighter in the secondary market.

Marsh & McLennan’s two tranches of notes firmed on the offered side, a trader said.

Ford Motor Credit hits primary

Ford Motor Credit sold a $2.4 billion three-part offering of senior notes (Baa3/BBB-/) on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes sold at the tight end of talk, which had firmed around 15 bps from initial guidance.

A $650 million tranche of floating-rate notes due 2017 priced at par to yield Libor plus 52 bps.

The company sold $1 billion of 1.684% three-year notes at par to yield Treasuries plus 72 bps.

There was also $850 million of 3.664% notes due 2024 priced at par to yield Treasuries plus 127 bps.

Ford Motor Credit’s 1.684% notes due 2017 traded mostly flat at 72 bps bid, 71 bps offered, a trader said.

The company’s 3.664% notes due 2024 were quoted in secondary trading at 128 bps bid, 125 bps offered.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and HSBC Securities (USA) Inc. are the joint bookrunners.

Proceeds will be added to the general funds of Ford Credit and will be available for the purchase of receivables, for loans and for use in connection with the retirement of debt.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Morgan Stanley sells sub notes

In another financial deal, Morgan Stanley sold $2.25 billion of 4.35% subordinated global medium-term notes, series F, (Baa3/BBB+/BBB+) due 2026 at 99.824, according to an FWP filed with the SEC.

Morgan Stanley’s notes tightened to 189 bps bid, 187 bps offered, a trader said.

Morgan Stanley & Co. LLC is the bookrunner.

The financial services company is based in New York City.

Simon Property two-parter

Simon Property Group sold $1.3 billion of senior notes (A2/A/) in tranches due 2024 and 2044 on Wednesday, according to a market source.

Both tranches of the sale sold tight of price guidance.

The company sold $900 million of 3.75% notes due 2024 at 99.804 to yield 3.398%, or Treasuries plus 100 bps.

A second tranche was $400 million of 4.25% 30-year bonds priced at 99.409 to yield 4.285%, or Treasuries plus 115 bps.

In the secondary market, Simon Property’s 3.75% notes due 2024 traded at 100 bps bid, a trader said.

The company’s 4.25% notes due 2044 firmed to 112 bps offered.

Citigroup Global Markets, Deutsche Bank Securities Inc. and RBS Securities Inc. are the joint bookrunners.

Proceeds will be used to fund a tender offer and for general corporate purposes.

The real estate investment trust for retail properties is based in Indianapolis.

Lowe’s brings deal

Lowe’s was also in Wednesday’s primary market, pricing a $1.25 billion three-tranche offering of senior notes (A3/A-/), according to a market source and an FWP filing with the SEC.

Both fixed-rate tranches of the offering sold at the tight end of talk, which had firmed around 10 bps to 15 bps from initial guidance.

The company sold $450 million of floating-rate notes due 2019 at par to yield Libor plus 42 bps.

A second tranche was $450 million of 3.125% notes due 2024 priced at 99.133 to yield 3.227%, or Treasuries plus 82 bps.

There was also $350 million of 4.25% notes due 2044 priced at 99.73 to yield 4.266%, or Treasuries plus 112 bps.

Lowe’s 3.125% notes due 2024 traded flat at 82 bps bid, 80 bps offered, according to a trader.

The tranche of 4.25% notes due 2044 were quoted in aftermarket trading at 112 bps bid, 110 bps offered.

Joint bookrunners were Goldman Sachs, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes.

The home improvement company is based in Mooresville, N.C.

Marsh & McLennan offering

Marsh & McLennan priced $800 million of senior notes (Baa1/A-/BBB+) on Wednesday in tranches due 2019 and 2025, according to an informed source.

Both tranches of the deal sold at the tight end of talk, which had firmed around 10 bps from initial guidance.

The sale included $300 million of 2.35% notes due 2019 priced at 99.911 to yield 3.544%, or Treasuries plus 68 bps.

There was also $500 million of 3.5% notes due 2025 sold with a spread of Treasuries plus 113 bps.

Pricing was at 99.617 to yield 3.544%.

Both tranches sold at the tight end of talk.

Marsh & McLennan’s notes due 2019 traded late afternoon at 63 bps offered, a trader said.

The company’s tranche of notes due 2025 were quoted at 111 bps offered.

BofA Merrill Lunch, Goldman Sachs, HSBC Securities, J.P. Morgan Securities LLC, Morgan Stanley, Barclays, Deutsche Bank Securities and Citigroup Global Markets were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The professional services firm is based in New York City.

Rentenbank prices $500 million

The primary also saw Germany’s Landwirtschaftliche Rentenbank sell $500 million of 1.875% notes (Aaa/AAA/AAA) due Jan. 22, 2020 in line with price talk on Wednesday at mid-swaps flat, a market source said.

Pricing was at 99.776 to yield 1.92%.

The bookrunners were Citigroup Global Markets, Morgan Stanley and Societe Generale.

The German development agency for agribusiness is based in Frankfurt.

BNG new issue

Bank Nederlandse Gemeenten NV priced $500 million of 0.625% two-year notes (Aaa/AAA/) at mid-swaps flat, according to a source away from the trade.

The notes sold in line with guidance.

Pricing was at 99.76 to yield 0.746%.

BofA Merrill Lynch was the bookrunner.

The local government funding agency is based in the Hague, the Netherlands.

Camden prices tight

In other primary action, Camden Property Trust sold a $250 million offering of 3.5% senior notes (Baa1/BBB-/) due 2024 with a spread of Treasuries plus 118 bps, according to a market source and an FWP filed with the SEC.

The notes sold at the tight end of the Treasuries plus 120 bps area talk, which had firmed around 15 bps from earlier guidance.

The notes sold at 99.231 to yield 3.592%.

Camden Property’s 3.5% notes due 2024 firmed to 115 bps bid, according to a trader.

BofA Merrill Lynch, JPMorgan and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay any outstanding balance on the company’s unsecured line of credit and other short-term borrowings and for general corporate purposes.

The real estate investment trust for apartment communities is based in Houston.

California Resources’ $5 billion

California Resources, a wholly-owned subsidiary of Occidental Petroleum Corp., is planning to price a $5 billion offering of senior notes, according to an 8-K filed with the SEC.

The sale will be done via Rule 144A and Regulation S.

Proceeds will be used to make a cash distribution to Occidental Petroleum.

Occidental is an oil and gas exploration company based in Los Angeles.

Fannie Mae sets talk

Fannie Mae announced plans to price an offering of Benchmark Notes due Sept. 6, 2024, according to a market source and a company news release.

Price talk is set in the low- to mid-30 bps area over Treasuries.

The issue will settle on Sept. 8.

Deutsche Bank Securities, JPMorgan and Nomura Securities International, Inc. are the joint lead managers.

The co-managers include Barclays, CastleOak Securities, LP, FTN Financial Capital Markets and Multi-Bank Securities Inc.

The government-backed mortgage lender is based in Washington, D.C.

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