Eversource Energy prices; Mercy Health sells bonds; December on target to hit deal low

By Cristal Cody

Tupelo, Miss., Dec. 10 – Two issuers tapped the high-grade primary market on Monday in what may be one of the busiest sessions left in the year.

Eversource Energy sold $900 million of senior notes in two parts on the tight side of guidance. The company was last in the primary market at the start of the year when it priced a $650 million two-tranche offering of senior notes on Jan. 3, 2018.

In the new offering on Monday, the company placed a $500 million tranche of long 10-year notes with a spread of Treasuries plus 147 basis points. In the Jan. 3 offering, a $450 million tranche of 3.3% notes due Jan. 15, 2028 priced at a spread of Treasuries plus 85 bps.

In other issuance on Monday, Mercy Health sold $304.11 million of taxable bonds.

Supply is expected to remain light this week with syndicate sources predicting up to about $5 billion of issuance.

Just over $4 billion of investment-grade bonds priced last week.

Little, if any, issuance is expected over the final two weeks of December.

The first week of the month typically is the strongest deal volume week in December, according to a BofA Merrill Lynch research note released on Monday.

“This means there is not much room to add to this week's low volume for the remainder of the month,” the note said. “This suggests December supply of less than $10 [billion], which would be the lowest supply volume for any month on record going back to 1998.”

Since 1998, the issuance low in the high-grade bond market has been $13 billion of bonds brought to the market in December 1999, according to the report.

Looking ahead, market sources expect a rate hike at the Federal Reserve’s next monetary policy meeting on Dec. 19.

The Markit CDX North American Investment Grade 31 index eased about 1 bp to close the day at a spread of 82 bps.

Eversource Energy prices

Eversource Energy sold $900 million of the senior notes (Baa1/A/BBB+) on Monday on the tight side of guidance, according to a market source and FWP filings with the Securities and Exchange Commission.

A $400 million tranche of 3.8% five-year notes was placed at 99.638 to yield 3.881%. The notes priced with a spread of 117 bps over Treasuries. Price guidance was in the Treasuries plus 120 bps area, plus or minus 3 bps, slightly tighter than initial price talk in the Treasuries plus 125 bps area.

The company sold $500 million of 4.25% notes due April 1, 2029 at 99.305 to yield 4.335% and a spread of Treasuries plus 147 bps. Price guidance was in the Treasuries plus 150 bps area, plus or minus 3 bps. The notes were initially talked in the 155 bps over Treasuries spread area.

Barclays, Goldman Sachs & Co. LLC, PNC Capital Markets LLC, RBC Capital Markets LLC, TD Securities (USA) LLC, BNY Mellon Capital Markets LLC and U.S. Bancorp Investments Inc. were the bookrunners.

Boston-based Eversource Energy is engaged in the energy delivery business through utility subsidiaries.

Mercy Health sells bonds

Mercy Health priced $304.11 million of 4.302% taxable bonds due July 1, 2028 (A2/A+/AA-) at a spread of Treasuries plus 145 bps on Monday, according to a market source.

J.P. Morgan Securities LLC was the bookrunner.

Mercy Health is a Cincinnati-based health care company.

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