Meiji Yasuda, CSX, Dollar General see demand; bank, financial paper mostly flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 15 – Meiji Yasuda Life Insurance Co., CSX Corp. and Dollar General Corp. entered the high-grade primary on Thursday, offering $3.1 billion of bonds during a slower session for the market.

One source had noted the possibility of a new issue from a large financial institution pricing on Thursday following the slew of third-quarter earnings announcements this week, though no deal from the sector ultimately came to market.

The three new corporate deals that did enter Thursday’s primary were met with a strong reception from investors, with each pricing tight of initial talk and posting oversubscribed order books.

Meiji Yasuda Life Insurance garnered more than $9 billion of orders for its new $2 billion 30-year subordinated notes offering and transportation company CSX Corp. sold $600 million of bonds at the tight end of talk.

Dollar General sold a $500 million of 10-year issue of notes around 40 basis points tight of the mid-point of talk following the raising of its credit rating to BBB from BBB- by Standard & Poor’s earlier during the day.

In the secondary, investment-grade bank and financial paper traded mostly unchanged on Thursday following mixed earnings results.

JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 were flat after the company announced weaker than expected third quarter earnings.

Goldman Sachs Group Inc.’s 3.5% notes due 2025 headed out unchanged after the company announced a third quarter profit miss.

Citigroup Inc.’s 3.3% senior notes due 2025 eased 1 bp in the secondary market despite the release of stronger than expected third quarter earnings results.

The Markit CDX North American Investment Grade 25 index closed the day 2 bps tighter at a spread of 83 bps.

Meiji subordinated notes

Meiji Yasuda Life Insurance priced $2 billion of 30-year subordinated notes on Thursday at par to yield 5.2%, at the tight end of talk set in the 5.25% area.

Initially, a source said, the notes were guided in a range of 5.5% to 5.625%.

J.P. Morgan Securities LLC and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S notes, which will be non-callable for 10 years.

The insurance services company is based in Tokyo.

CSX’s new issue

CSX Corp. was also in Thursday’s market, pricing a $600 million offering of 3.35% 10-year senior notes (Baa1/BBB+/) at a 135 bps spread over Treasuries, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.763 to yield 3.378%.

The notes were guided in the Treasuries plus 140 bps area after being talked in the area of Treasuries plus 150 basis points.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes.

The transportation company is based in Jacksonville, Fla.

Dollar General prices tight

The primary market also hosted Goodlettsville, Tenn.-based discount retailer Dollar General, which sold $500 million of 4.15% 10-year senior notes (Baa3/BBB) during Thursday’s session at a spread of Treasuries plus 215 bps, according to a market source and a FWP filing with the Securities and Exchange Commission.

The notes sold at the tight end of guidance set in the Treasuries plus 220 bps area. Initially, the notes were talked in the range of Treasuries plus 250 bps to 262.5 bps.

Pricing was at 99.844 to yield 4.169%.

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

Proceeds will be used to repay outstanding borrowings under the company’s existing credit facilities and for general corporate purposes.

Together with the note offering, the company intends to refinance its existing credit facilities with a new senior unsecured credit facility consisting of a $425 million five-year term loan facility and a $1 billion five-year cash-flow based revolving credit facility, a company release stated.

Fannie Mae sells benchmark

In other new issue happenings, Fannie Mae priced $3 billion of 1.5% Benchmark Notes due Nov. 30, 2020 on Thursday at a spread of Treasuries plus 20 basis points, according to a company press release.

The issue sold at 99.907 to yield 1.519%.

Barclays, J.P. Morgan Securities LLC and Nomura Securities are the joint lead managers.

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

Bank/brokerage CDS costs lower

Investment-grade bank and brokerage CDS prices were lower on Thursday, according to a market source.

Bank of America Corp.’s CDS costs fell 2 bps to 87 bps bid, 91 bps offered. Citigroup Inc.’s CDS costs were 3 bps lower at 96 bps bid, 100 bps offered. JPMorgan Chase & Co.’s CDS costs were down 2 bps to 84 bps bid, 88 bps offered. Wells Fargo & Co.’s CDS costs decreased 1 bp to 58 bps bid, 62 bps offered.

Merrill Lynch’s CDS costs were 2 bps lower at 90 bps bid, 92 bps offered. Morgan Stanley’s CDS costs were also down 2 bps to 93 bps bid, 97 bps offered. Goldman Sachs Group, Inc.’s CDS costs ended 2 bps lower at 94 bps bid, 98 bps offered.

JPMorgan stable

Meanwhile in the cash market, JPMorgan Chase’s 3.9% notes due 2025 were unchanged on Thursday at 157 bps bid, a market source said.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at 155 bps plus Treasuries.

The financial services company is based in New York City.

Goldman steady

Goldman Sachs’ 3.5% notes due 2025 headed out flat in secondary trading at 163 bps bid, a market source said.

Goldman sold $800 million of the notes (Baa1/A-/A) in a March 25 tap at Treasuries plus 145 bps.

The issue originally priced on Jan. 20 in a $1.7 billion offering at 170 bps plus Treasuries.

The financial services company is based in New York City.

Citigroup soft

Citigroup’s 3.3% senior notes due 2025 traded 1 bp softer over the session at 156 bps bid, a market source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

-Paul Deckelman contributed to this review

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