Lloyds, Welltower, CNH, Charter price; United Technologies, Elanco hold calls

By Cristal Cody

Tupelo, Miss., Aug. 9 – Lloyds Banking Group plc led pricing action in the high-grade bond market on Thursday with a $3 billion two-tranche offering of senior notes.

Welltower Inc. also was in the primary market with $1.3 billion of senior notes in three tranches.

Two issuers priced split-rated bonds during the session.

CNH Industrial Capital LLC sold $500 million of long five-year senior notes (Ba1/BBB/BBB-).

Charter Communications, Inc. subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. reopened their senior secured floating-rate notes due Feb. 1, 2024 (Ba1/BBB-/BBB-) in a $500 million tap on Thursday.

In other action, United Technologies Corp. is holding fixed-income investor calls through Friday for an offering to help fund the company’s long-planned acquisition of Rockwell Collins, Inc.

Also on Thursday, Elanco Animal Health Inc. (Baa3/BB+/) held fixed-income investor calls for a potential $2.5 billion offering of senior notes to finance its spin-off from Eli Lilly & Co., according to a market source.

Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC are the arrangers.

High-grade volume week to date totals more than $35 billion, exceeding market forecasts of about $20 billion to $25 billion of new supply for the week.

New issue performance “continues to be strong despite the heavy volumes,” Yunyi Zhang, a BofA Merrill Lynch analyst, said in a report released on Thursday. “The average new issue concession narrowed to 0.6 [basis point] from 2.9 bps last week. This week’s new issue bonds are trading 2.6 bps tighter on average from their pricing spreads.”

The Markit CDX North American Investment Grade 30 index softened about 1 bp to close the day at a spread of 59 bps.

Lloyds prices $3 billion

Lloyds Banking Group priced $3 billion of non-callable senior notes (A3/BBB+/A+) in two tranches on Thursday, according to an FWP filing with the Securities and Exchange Commission.

Lloyds sold $1.75 billion of 4.05% five-year notes at 99.973 to yield 4.056%, or a spread of Treasuries plus 125 bps.

The company priced a $1.25 billion tranche of 4.55% 10-year notes at 99.698 to yield 4.588%. The notes were placed with a spread of 165 bps over Treasuries.

Barclays, Citigroup Global Markets, Lloyds Securities Inc. and RBC Capital Markets, LLC were the bookrunners on the five-year notes.

Barclays, Citigroup Global Markets, Lloyds Securities and UBS Securities LLC were the bookrunners for the 10-year notes.

Lloyds Banking Group is a bank and financial services company based in London.

Welltower sells three tranches

Welltower sold $1.3 billion of senior notes (Baa1/BBB+/BBB+) in three tranches on Thursday, according to a market source.

The company priced $600 million of 3.95% five-year notes on top of guidance at a spread of Treasuries plus 115 bps.

It also sold a $200 million add-on to its 4.25% notes due April 15, 2028 on the tight side of guidance at a spread of 145 bps over Treasuries.

The company originally sold $550 million of the 4.25% notes on April 3 at 99.959 to yield 4.255%, and a spread of 148 bps over Treasuries. The total outstanding is now $750 million.

Welltower also priced $500 million of 4.95% 30-year notes on the tight side of guidance with a spread of 190 bps over Treasuries.

Barclays, Citigroup Global Markets and MUFG were the bookrunners.

Welltower is a senior housing and health care real estate investment trust based in Toledo, Ohio.

Charter brings add-on

Charter Communications priced a $500 million reopening of senior secured floating-rate notes due Feb. 1, 2024 at 101.479 on Thursday, according to an FWP filing with the SEC.

The notes (Ba1/BBB-/BBB-) have a coupon of Libor plus 165 bps.

Charter originally sold $400 million of the floating-rate notes on June 28 at par to yield Libor plus 165 bps. The total outstanding is now $900 million.

Morgan Stanley & Co. LLC was the bookrunner.

Charter is a Stamford, Conn.-based broadband communications company.

CNH sells split-rated notes

CNH Industrial Capital sold $500 million of 4.2% senior notes due Jan. 15, 2024 (Ba1/BBB/BBB-) on Thursday at a spread of 145 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.701 to yield 4.263%.

BofA Merrill Lynch, Goldman Sachs, RBC Capital Markets, Wells Fargo Securities LLC, J.P. Morgan Securities and Santander Investment Securities Inc. were the bookrunners.

Racine, Wis.-based CNH Industrial Capital is a financing arm of CNH Industrial America LLC.

United Technologies in pipeline

United Technologies (Baa1/A-/) started the first of a two-day round of fixed-income investor calls on Thursday for a bond offering via BofA Merrill Lynch, HSBC Securities (USA) Inc. and Morgan Stanley, a market source said.

The company is expected to issue $14 billion of new debt to fund the cash portion of the acquisition of Rockwell Collins, which was first announced in September 2017.

United Technologies will acquire the company for $140 per share in cash and stock, including the assumption of $7 billion of debt, in a deal valued at about $30 billion.

United Technologies is a Hartford, Conn.-based company that provides technology products and services to the building and aerospace industries.

Fund inflows continue

Investment-grade corporate mutual funds and exchange-traded funds continued to see solid inflows with $2.804 billion entering the space, according to data for the week ended Aug. 8 generated by AMG Data Services Inc.

The gain follows inflows of $1.211 billion in the week ending Aug. 1 and $1.986 billion in the week ending July 25, which came after a similarly sized inflow of $2.021 billion the week before, according to a Prospect News analysis of the reports by the Arcata, Calif.-based unit of Thomson Reuters Corp’s Lipper analytics division.

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