Morning Commentary: Gaming & Leisure units to sell notes; Baltimore Gas offering on tap

By Devika Patel

Knoxville, Tenn., Sept. 17 – The high-grade bond primary market stayed relatively quiet over the morning on Monday, with only two new deals announced.

Wyomissing, Pa.-based gaming-oriented real estate investment trust Gaming & Leisure Properties Inc. subsidiaries GLP Capital, LP and GLP Financing II, Inc. will conduct a two-tranche offering of split-rated fixed-rate senior notes, including an add-on to its 5.25% notes due June 1, 2025.

Meanwhile, Baltimore Gas and Electric Co., the Baltimore-based subsidiary of Exelon Corp., intends to sell notes due Sept. 15, 2048.

Looking ahead, market sources expect steady supply of about $25 billion to $30 billion for the week.

Volume is expected to thin over the back half of the month following heavy issuance in the first two weeks when nearly $90 billion of bonds priced, sources said.

Gaming & Leisure on tap

Gaming & Leisure subsidiaries GLP Capital and GLP Financing will sell split-rated fixed-rate senior notes (Ba1/BBB-) in two parts.

The notes will be sold in two tranches consisting of notes due 2029 and an add-on to the company’s 5.25% notes due June 1, 2025. The company sold $500 million of the 2025 notes on May 21.

Price talk for the 2029 bonds is in the 250 bps to 262.5 bps area over Treasuries, and talk for the tap of 2025 notes is in 212.5 bps area over Treasuries. Pricing was expected on Monday.

Both of the notes will have a make-whole call.

BofA Merrill Lynch, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Citizens Capital Markets, Fifth Third Securities Inc., SunTrust Robinson Humphrey Inc., Siebert Capital Markets, Credit Agricole CIB, Goldman Sachs & Co. and Barclays are the joint bookrunners.

Proceeds will be used, along with borrowings under the company’s revolver, to acquire certain gaming properties and real estate assets.

Baltimore Gas plans notes

Baltimore Gas said it will offer notes due Sept. 15, 2048, which feature a make-whole call until March 15, 2048 and then a par call.

BNP Paribas Securities Corp., Credit Agricole, Credit Suisse Securities (USA) LLC, SMBC Nikko and TD Securities (USA) LLC are the bookrunners. BNY Mellon Capital Markets LLC is the senior co-manager.

Proceeds will be used to repay commercial paper and for general corporate purposes.

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