Dollar General brings $1.3 billion of senior notes; FedEx sells $750 million of 10-year notes

By Sheri Kasprzak

New York, April 8 - Dollar General Corp. led an active day for pricings, selling $1.3 billion of senior notes in two tranches.

The company sold $400 million of 1.875% senior notes due in 2018 and $900 million of 3.25% senior notes due in 2023.

Elsewhere during the session, FedEx Corp. came to market with $750 million of notes in a two-tranche offering.

The company sold $250 million of 10-year notes due 2023 at a 2.7% coupon priced at 99.73 to yield 2.73%. The spread came in at Treasuries plus 100 basis points,

The Dollar General 2018 notes priced at a spread of Treasuries plus 120 basis points after being talked at 118 to 122 bps. The 2023 notes priced at a spread of Treasuries plus 155 bps after being talked at 154 to 159 bps.

The notes due 2018 were quoted 2 bps wider at 122 bps bid, 118 bps offered, a trader said, while the notes due 2023 at 159 bps bid, 154 bps offered late during the session.

BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the joint bookrunners for the deal.

Proceeds from the deal will be used together with term loan borrowings under new credit facilities to repay all of the company's outstanding borrowings under existing senior secured credit facilities, to pay related fees and expenses and for general corporate purposes.

Together with the note offering, the company intends to enter into a new senior unsecured credit facility, consisting of $1 billion five-year term loan facility and an $850 million five-year cash-flow based revolving credit facility. The note deal, the statement said, is not conditioned upon the completion of the credit facilities and related refinancing.

Based in Goodlettsville, Tenn., Dollar General is a discount retailer.

FedEx brings $750 million

FedEx's $750 million of notes (Baa1/BBB/) were sold through joint bookrunners Merrill Lynch, Fenner, Pierce & Smith, Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC.

The deal also included $500 million of 30-year notes, which are due 2043, at a 4.1% coupon priced at 99.742 to yield 4.115%. The spread came in at Treasuries plus 120 bps.

Proceeds will be used for working capital and general corporate purposes.

Located in Memphis, Tenn., FedEx is a shipping and logistics management company.

Wal-Mart notes firm

The secondary market saw Wal-Mart Stores Inc.'s recent $5 billion deal was quoted mostly tighter on Monday.

Wal-Mart's $1 billion tranche of 0.6% three-year notes was quoted 2 basis points tighter at midday at 22 bps bid, 21 bps offered.

The notes were sold at a spread of Treasuries plus 30 bps on Thursday.

Meanwhile, the $1 billion of 1.125% five-year notes, which priced at 45 bps over Treasuries, traded 2 bps better on the day at 41 bps bid, 40 bps offered.

The $1 billion tranche of 2.55% 10-year notes was quoted 1 bp wider at 80 bps bid, 76 bps offered.

The notes were sold at a spread of Treasuries plus 82 bps.

In other trading, the $1 billion of 4% 30-year bonds traded flat at 100 bps bid, 95 bps offered following Thursday's pricing at Treasuries plus 102 bps.

The discount retailer is based in Bentonville, Ark.

Bank CDs mostly tighter

Investment-grade bank and brokerage credit default swaps costs were mostly tighter on Monday.

Bank of America's CDS costs were 5 bps tighter at 128 bps bid, 132 bid. Citigroup's CDS costs were 6 bps tighter at 109 bps bid, 114 bps offered. J.P. Morgan's CDS costs declined 3 bps to 84 bps bid, 88 bps offered. Wells Fargo's CDS costs tightened 2 bps to 67 bps bid, 71 bps offered.

Merrill Lynch's CDS costs were flat at 107 bps bid, 117 bps offered. Morgan Stanley's CDS costs declined 9 bps to 140 bps bid, 145 bps offered. Goldman Sachs' CDS costs tightened 5 bps to 129 bps bid, 133 bps offered.

Paul Deckelman contributed to this review

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