High-grade supply strong; FMS, Telefonica, Chevron, Becton, Anthem, Marsh, Essex price

By Cristal Cody

Tupelo, Miss., Feb. 27 – High-grade deal action remained busy on Tuesday with strong volume expected by market sources over the week.

In SSA supply, FMS Wertmanagement priced $1.5 billion of five-year senior notes tighter than initial talk.

Telefonica Emisiones SAU tapped the primary market with $2 billion of guaranteed senior notes in two parts.

Chevron Phillips Chemical Co. LLC/Chevron Phillips Chemical Co. LP priced $1.05 billion of senior notes in two tranches.

Becton, Dickinson and Co. sold $1 billion of floating-rate notes due Dec. 29, 2020.

Anthem, Inc. priced $850 million of 30-year notes.

Marsh & McLennan Cos., Inc. placed an upsized $600 million of 30-year senior notes.

Essex Portfolio, LP brought $300 million of 30-year guaranteed senior notes to the primary market.

For the week, syndicate sources expect about $25 billion to $30 billion of bond issuance.

There also is talk of a major bond deal in the near future from CVS Health Corp., an informed source said. The company’s $69 billion cash and stock acquisition of Aetna Inc. is expected to close in the second half of 2018. CVS Health and Aetna both have shareholder meetings scheduled on March 13 to approve the merger.

The Markit CDX North American Investment Grade 29 index eased more than 1 basis point to close the day at a spread of 54 bps.

FMS raises $1.5 billion

In the sole reported SSA deal on Tuesday, FMS Wertmanagement priced $1.5 billion of 2.75% five-year senior notes (Aaa/AAA) at a spread of mid-swaps plus 10 bps or Treasuries plus 22.1 bps, according to a market source and an FWP filing with the SEC.

The notes were initially talked to print in the mid-swaps plus 12 bps area.

The issue priced at 99.579 to yield 2.841%.

Barclays, Goldman Sachs International, HSBC Bank plc and Merrill Lynch International were the bookrunners.

Munich-based FMS Wertmanagement is a German state-owned wind-down agency.

Telefonica brings $2 billion

In corporate supply, Telefonica Emisiones priced $2 billion of guaranteed senior notes (Baa3/BBB/BBB) in two tranches during the session, according to a market source.

The company sold $750 million of 4.665% notes due March 6, 2038 at a spread of Treasuries plus 150 bps, on the tight side of guidance in the Treasuries plus 155 bps area.

Telefonica priced $1.25 billion of 4.895% notes due March 6, 2048 with a Treasuries plus 173 bps spread. The bonds were talked to price in the Treasuries plus 175 bps spread area.

Barclays, BofA Merrill Lynch, Commerzbank Capital Markets Corp., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and SMBC Nikko Securities America Inc. were the bookrunners.

The notes are guaranteed by Telefonica SA.

The telecommunications group is based in Madrid.

Chevron Phillips Chemical prices

Chevron Phillips Chemical sold $1.05 billion of senior notes (A2/A-/) in two tranches on Tuesday, according to market sources.

The company sold $500 million of 3.3% notes due May 1, 2023 at a Treasuries plus 65 bps spread.

Chevron Phillips Chemical priced $550 million of 3.7% notes due June 1, 2028 with a spread of 85 bps over Treasuries.

Both tranches priced on the tight side of guidance.

J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and MUFG were the lead managers.

Chevron Phillips Chemical held fixed income investor calls on Monday.

The Woodlands, Texas-based Chevron Phillips Chemical Co. LLC is a petrochemical company owned by Chevron Corp. and Phillips 66.

Becton Dickinson sells $1 billion

Becton, Dickinson priced $1 billion of floating-rate notes due Dec. 29, 2020 at par to yield Libor plus 87.5 bps on Tuesday, on the tight side of spread talk in the Libor plus 90 bps area, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold the notes (Ba1/BBB/BBB-) with an initial interest rate of 2.94364% for the first interest period and Libor plus 87.5 bps thereafter.

Barclays and Wells Fargo Securities LLC were the bookrunners.

Becton, Dickinson is a medical technology company based in Franklin Lakes, N.J.

Anthem taps primary market

Anthem priced $850 million of 4.55% 30-year notes (Baa2/A/BBB) on Tuesday at a spread of Treasuries plus 140 bps, according to a market source.

The company sold the notes on the tight side of guidance in the Treasuries plus 145 bps area.

Credit Suisse Securities (USA) LLC, Barclays and Morgan Stanley & Co. LLC were the bookrunners.

In addition to the 30-year issue, selling noteholders will sell $1.25 billion of notes due 2028 in a remarketing of the securities for 1.9% remarketable subordinated notes, according to a 424B3 filing with the Securities and Exchange Commission.

Indianapolis-based Anthem is a health benefits company.

Marsh & McLennan upsize

Marsh & McLennan priced an upsized $600 million of 4.2% 30-year senior notes (Baa1/A-/) on Tuesday at a spread of 103 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The deal was upsized from $500 million and priced on the tight side of guidance in the Treasuries plus 105 bps area.

The company sold the notes at 99.594 to yield 4.224%.

Citigroup Global Markets Inc., Goldman Sachs & Co., Barclays and HSBC Securities (USA) Inc. were the bookrunners.

The professional services firm is based in New York.

Essex sells 30-year notes

Essex Portfolio sold $300 million of 4.5% 30-year guaranteed senior notes at a spread of Treasuries plus 133 bps on Tuesday, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/BBB+) priced at 99.591 to yield 4.525%.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, Jefferies & Co. and MUFG were the bookrunners.

The notes are guaranteed by Essex Property Trust, Inc.

Palo Alto, Calif.-based Essex Portfolio is a real estate investment trust.

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