PayPal, Volkswagen, Walmart, Allegion, Interstate Power, Desjardins price; EBRD eyed

By Cristal Cody

Tupelo, Miss., Sept. 19 – The investment-grade bond market roared back to life on Thursday with more than $11 billion of bonds priced after issuance paused on Wednesday for the Federal Reserve’s rate cut.

PayPal Holdings Inc. priced $5 billion of notes in four tranches, dropping a floating-rate tranche from the deal.

Volkswagen Group of America Finance LLC brought $3 billion of notes in five tranches to the primary market.

Walmart Inc. priced $1.5 billion of senior notes in two tranches.

Allegion plc priced $400 million of 10-year senior notes.

Interstate Power and Light Co. sold $300 million of 30-year green senior debentures.

In addition, the Federation des caisses Desjardins du Quebec priced $1 billion of three-year covered bonds.

In other market activity on Thursday, Hudson Pacific Properties Inc. held fixed income investor calls for a possible bond deal.

Fannie Mae announced that it did not utilize its Sept. 19 Benchmark Notes announcement date.

Meanwhile, the European Bank for Reconstruction and Development is marketing $500 million of five-year green climate resilience bonds that are expected to price on Friday.

Initial price talk is in the mid-swaps plus 16 basis points area.

High-grade corporate issuers have priced more than $18 billion of bonds week to date. Market sources expected about $25 million of deal volume for the week.

The Markit CDX North American Investment Grade 32 index eased about 1 bp to close the day at a spread of 52 bps.

PayPal prices $5 billion

PayPal Holdings priced $5 billion of notes (BBB+/BBB+) in four tranches on Thursday on the tight side of guidance, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $1 billion of 2.2% three-year notes at 99.873 to yield 2.244%, or a spread of 55 bps over Treasuries.

PayPal priced $1.25 billion of 2.4% five-year notes at 99.939 to yield 2.413%. The notes came at a Treasuries plus 75 bps spread.

A $1.25 billion tranche of 2.65% seven-year notes priced at a Treasuries plus 95 bps spread, or 99.752 to yield 2.689%.

In the final tranche, PayPal sold $1.5 billion of 2.85% 10-year notes at 99.663 to yield 2.889%. The notes priced with a 110 bps over Treasuries spread.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., BofA Securities, Inc., HSBC Securities (USA) Inc. and MUFG were the bookrunners.

PayPal is a San Jose, Calif.-based online payments system operator.

Volkswagen raises $3 billion

Volkswagen Group of America Finance (A3/BBB+) priced a $3 billion five-part Rule 144A and Regulation S offering of notes on Thursday, according to a market source.

A $500 million tranche of two-year floating-rate notes priced at Libor plus 86 bps.

The company sold $500 million of 2.5% two-year fixed-rate notes at a spread of Treasuries plus 83 bps.

Volkswagen priced $1 billion of 2.7% three-year notes at a spread of Treasuries plus 103 bps.

A $500 million tranche of 2.85% five-year notes priced with a Treasuries plus 123 bps spread.

The company also sold $500 million of 3.2% seven-year notes at a spread of 148 bps over Treasuries.

BofA Securities, Barclays, MUFG, TD Securities (USA) LLC and Wells Fargo Securities LLC were the bookrunners.

Volkswagen Group of America Finance is a Herndon, Va.-based financing arm and subsidiary of Volkswagen Group of America, Inc.

Walmart sells $1.5 billion

Walmart sold $1.5 billion of fixed-rate senior notes (Aa2/AA/AA) in two tranches on Thursday, according to an FWP filing.

A $500 million tranche of 2.375% 10-year notes priced at 99.894 to yield 2.387%, or a Treasuries plus 60 bps spread.

Walmart placed $1 billion of 2.95% 30-year notes at 99.528 to yield 3.025%. The notes priced with a spread of 80 bps over Treasuries.

Barclays, BofA Securities, Citigroup Global Markets Inc., HSBC Securities, JPMorgan and Wells Fargo were the bookrunners.

The discount retailer is based in Bentonville, Ark.

Allegion prints notes

Allegion priced $400 million of 3.5% 10-year senior notes (Baa3/BBB/BBB-) on Thursday at 99.966 to yield 3.504%, or a spread of Treasuries plus 173 bps, according to an FWP filing.

BofA Securities, Goldman Sachs, JPMorgan, BNP Paribas, Citigroup and Wells Fargo were the bookrunners.

Allegion subsidiary Allegion US Holding Co. Inc. will fully and unconditionally guarantee the notes.

Allegion is a security products company based in Carmel, Ind.

Interstate Power prices

Interstate Power and Light sold $300 million of 3.5% 30-year green senior debentures (Baa1/A-) on Thursday at a spread of 130 bps over Treasuries, according to an FWP filing.

The bonds priced at 99.668 to yield 3.518%.

JPMorgan, MUFG and Wells Fargo were the bookrunners.

The electric and natural gas subsidiary of Alliant Energy Corp. is based in Cedar Rapids, Iowa.

Desjardins du Quebec prices

The Federation des caisses Desjardins du Quebec priced $1 billion of 1.95% three-year covered bonds (Aaa//AAA) in a Rule 144A and Regulation S offering on Thursday at mid-swaps plus 34 bps, or a Treasuries plus 28.6 bps spread, according to a market source.

Initial price talk was in the mid-swaps plus 36 bps area.

BMO Capital Markets Corp., Goldman Sachs, Morgan Stanley and UBS Securities LLC were the bookrunners.

The Montreal-based organization supports the Desjardins caisses.

EBRD readies deal

Coming up on Friday, the European Bank for Reconstruction and Development (Aaa/AAA/AAA) plans to price $500 million of five-year green climate resilience bonds, according to a market source.

The notes due Sept. 27, 2024 were initially talked to price in the mid-swaps plus 16 bps area.

BNP Paribas Securities, Goldman Sachs International and Skandinaviska Enskilda Banken are the bookrunners.

The financial institution is based in London.

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