Commonwealth Edison, Republic Services, Union Electric, Duke Energy price; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., June 20 – Investment-grade primary action was mostly focused in the energy and utilities sector over Monday’s session.

Commonwealth Edison Co. priced a $1.2 billion offering of mortgage bonds (A2/A-/A) in two tranches.

Republic Services, Inc. brought a $500 million offering of 10-year notes.

Duke Energy Ohio, Inc. priced $250 million of 30-year first mortgage bonds.

Union Electric Co. sold a $150 million add-on to its 3.65% senior secured notes due 2045 during the session.

Volume is expected to stay light over the week with issuance predicted to top out at $10 billion, according to market sources.

The Markit CDX North American Investment Grade index ended the day 3 basis points tighter at a spread of 80 bps.

Investment-grade bonds were mixed in the secondary market.

AT&T Inc.’s 4.125% senior notes due 2026 were unchanged on the day.

HSBC Holdings plc’s 3.9% subordinated notes due 2026 traded about 5 bps tighter at the start of the session.

Dell, Inc.’s senior secured notes (Baa3/BBB-/BBB-) were mixed earlier in secondary trading.

Commonwealth Edison prices

Commonwealth Edison priced a $1.2 billion offering of mortgage bonds on Monday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $500 million of 2.55% series 120 10-year bonds at par to yield a spread of 87.5 bps over Treasuries.

The $700 million tranche of 3.65% series 121 30-year bonds priced at 99.351 to yield 3.686%, or 120 bps over Treasuries.

Citigroup Global Markets Inc., Mizuho Securities USA Inc., U.S. Bancorp Investments Inc., CIBC World Markets Inc., Credit Agricole Securities (USA) Inc. and PNC Capital Markets LLC were the bookrunners.

A portion of the proceeds will be used to refinance the $415 million outstanding principal of the company’s 5.95% first mortgage bonds, series 104, due Aug. 15, 2016 and the $250 million outstanding principal of its 1.95% first mortgage bonds, series 111, due Sept. 1, 2016. Remaining proceeds will be used to repay a portion of the company’s outstanding commercial paper obligations and for general corporate purposes.

Commonwealth Edison is a unit of Chicago-based energy provider Exelon Corp.

Republic Services in market

Republic Services sold $500 million of 2.9% 10-year notes at 99.785 to yield 2.925% on Monday, according to an FWP filing with the SEC.

The notes (Baa3/BBB+/BBB) priced with a spread of 125 bps over Treasuries.

Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch, BNP Paribas Securities Corp., Mizuho, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used to fund tender offers.

Republic Services is a waste collection company based in Phoenix.

Duke Energy Ohio prices

Duke Energy Ohio sold $250 million of 3.7% 30-year first mortgage bonds at 99.301 to yield 3.739% on Monday, according to an FWP filing with the SEC.

The bonds (A2/A/A) priced with a spread of 125 bps plus Treasuries.

Citigroup Global Markets Inc., Lebenthal Capital Markets, Loop Capital Markets LLC, Mischler Financial Group, Inc., Samuel A. Ramirez & Co. Inc. and Williams Capital Group LP were the bookrunners.

Proceeds will be used to fund capital expenditures for ongoing construction, for capital maintenance and for general corporate purposes.

The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.

Union Electric reopens bonds

Union Electric sold a $150 million add-on to its 3.65% senior secured notes due 2045 at 120 bps over Treasuries on Monday, according to an FWP filing with the SEC.

The notes priced at 99.501 to yield 3.678%.

BNP Paribas, JPMorgan, RBC Capital Markets LLC and Wells Fargo were the bookrunners.

The company originally sold $250 million of the notes on March 31, 2015 at 99.764 to yield 3.663% and a spread of 112.5 bps over Treasuries. The total outstanding is $400 million.

The public utility holding company and unit of Ameren Corp. is based in St. Louis.

AT&T stable

AT&T’s 4.125% notes due 2026 (Baa1//A-) were unchanged on Monday in secondary trading at 174 bps bid, according to a market source.

The company sold a $900 million reopening of the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were priced on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

HSBC tightens

HSBC’s 3.9% notes due 2026 were quoted about 5 bps tighter early in the day at 214 bps offered, according to a market source.

The company sold $2.5 billion of the notes (A1/A/AA-) on May 18 at Treasuries plus 210 bps.

London-based HSBC is a banking and financial services group.

Dell mixed

Dell’s 4.42% notes due 2021 traded flat to 1 bp softer at 277 bps offered earlier on Monday in the secondary market, a source said.

Dell sold $4.5 billion of the notes on May 17 at Treasuries plus 312.5 bps.

The technology and services company is based in Round Rock, Texas.

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