JPMorgan, Starbucks, Textron, Duke Indiana sell paper as market recovers; credit spreads firm

By Cristal Cody

Tupelo, Miss., March 10 – After the rollercoaster ride in the financial markets on Monday sent stocks teetering and credit spreads more than 30 basis points wider, issuers found a window on Tuesday to price $5.2 billion of high-grade bonds.

JPMorgan Chase & Co. priced $2.25 billion of six-year fixed-to-floating rate senior notes.

Starbucks Corp. sold $1.75 billion of senior notes in three tranches.

Duke Energy Indiana, LLC brought $550 million of 30-year first mortgage bonds to the primary market. The issue came at a new record low coupon for a 30-year utility and a record low yield for a 30-year corporate bond and attracted a final book size of $2.4 billion, a source said.

In other supply on Tuesday, Textron Inc. priced $650 million of 10-year notes.

Meanwhile, Florida Power & Light Co. is marketing 50-year registered floating-rate notes.

There was no issuance on Monday with stock indexes down 7% and Treasury yields at new all-time lows on coronavirus-related concerns and an oil price war.

Equities rebounded on Tuesday with the indexes all up nearly 5% in response to the U.S. president’s economic stimulus response measures.

Treasuries gave back some of the gains during the session with the benchmark 10-year note yield finishing up 24.9 bps at 0.748%.

Investment-grade credit spreads also gained some ground after widening over 30 bps on Monday.

The Markit CDX North American Investment Grade 33 index firmed more than 7 bps to close Tuesday at a spread of 106.2 bps.

High-grade bonds were mixed in secondary trading but mostly better compared to Monday’s levels, a market source said.

Apple Inc.’s bonds (Aa1/AA+/) tightened about 4 bps to 12 bps.

The company announced in February that it does not expect to meet revenue guidance for the March quarter following impacted manufacturing facilities and product demand in China due to the coronavirus.

JPMorgan prices $2.25 billion

At the top of supply on Tuesday, JPMorgan Chase priced $2.25 billion of 2.005% fixed-to-floating rate senior notes due March 13, 2026 (A2/A-/AA-) at a spread of Treasuries plus 145 bps, according to a market source.

Initial price guidance was in the Treasuries plus 160 bps area.

The notes will reset after the fixed-rate period to a floating rate of SOFR plus 158.5 bps.

J.P. Morgan Securities LLC was the bookrunner.

The financial services firm is based in New York.

Starbucks prints $1.75 billion

Starbucks sold $1.75 billion of senior notes (Baa1/BBB+/BBB+) in three parts during the session, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $500 million tranche of 2% seven-year notes priced at 99.591 to yield 2.063%, or a spread of 140 bps over Treasuries. The notes were initially talked at a 160 bps spread.

A $750 million tranche of 2.25% 10-year notes priced at 99.414 to yield 2.316%. The notes priced with a Treasuries plus 165 bps spread versus initial talk in the 180 bps area.

Starbucks sold $500 million of 3.35% 30-year notes at 99.232 to yield 3.391%. The bonds priced at a spread of 225 bps over Treasuries. Initial price talk was in the Treasuries plus 245 bps area.

BofA Securities, Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, U.S. Bancorp Investments Inc. and Citigroup Global Markets Inc. were the bookrunners.

Starbucks is a Seattle-based specialty coffee retailer.

Duke Energy Indiana sells bonds

Duke Energy Indiana sold $550 million of 2.75% 30-year first mortgage bonds (Aa3/A/) at a spread of Treasuries plus 165 bps, compared to talk in the Treasuries plus 190 bps area, according to a market source and an FWP filing.

The notes priced at 99.877 to yield 2.756%.

Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs, Mizuho Securities USA Inc., RBC Capital Markets, LLC and U.S. Bancorp Investments Inc. were the bookrunners.

The electricity provider is based in Plainfield, Ind.

Textron raises $650 million

Textron priced $650 million of 3% 10-year notes (Baa2/BBB/) at 99.523 to yield 3.054%, or a spread of Treasuries plus 237.5 bps, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 250 bps area.

J.P. Morgan, BofA Securities, Inc., MUFG, SMBC Nikko Securities America, Inc., U.S. Bancorp and Wells Fargo Securities, LLC were the bookrunners.

The Providence, R.I.-based multi-industry company operates global aircraft, defense, industrial and finance units.

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