High-grade volume heavy; Oracle prices $20 billion notes; TJX, Sysco, B.A.T., Exelon print

By Cristal Cody

Tupelo, Miss., March 30 – High-grade corporate issuers priced more than $37 billion of bonds over Monday’s session.

The volume was led by a $20 billion six-tranche offering of senior notes from Oracle Corp. in the largest deal of the year.

Also during the session, TJX Cos., Inc. priced $4 billion of senior notes in four tranches.

Sysco Corp. sold $4 billion of senior notes in four parts, including two tranches with 6.6% coupons.

British American Tobacco plc subsidiary B.A.T. Capital Corp. priced $2.4 billion of senior notes in three tranches.

Exelon Corp. brought $2 billion of senior notes in two tranches.

Anglo American Capital plc priced $1.5 billion of notes in two parts.

Aflac Inc. sold $1 billion of 10-year senior notes.

Southern California Edison Co. priced an upsized $600 million reopening of its 3.7% first and refunding mortgage bonds due Aug. 1, 2025.

AEP Transmission Co. placed $525 million of 30-year senior notes.

Ventas Realty LP sold $500 million of long 10-year guaranteed senior notes.

Wisconsin Power & Light Co. priced $350 million of 30-year debentures.

In addition, Oklahoma Gas & Electric Co. sold $300 million of 10-year senior notes.

About $30 billion to as much as $60 billion of deal volume is expected this week, according to market sources.

Supply totaled more than $109 billion last week.

Issuance is expected to slow in April as companies go into earnings reporting-related blackout periods, sources said.

High-grade supply has been heavy over the back half of March following Federal Reserve measures that includes plans to buy back corporate bonds and U.S. government stimulus measures due to the coronavirus that has caused the closure of non-essential businesses.

On Sunday, president Donald Trump extended social distancing guidelines to April 30 as the number of U.S. infections grows daily and the death toll in Italy topped 10,000 over the weekend.

Financial market tone was positive at the start of the session with high-grade corporate bond exchange-traded funds and stocks up.

The iShares iBoxx Investment Grade Corporate Bond ETF climbed 1.36% early Monday and closed the day 1.22% better.

The Markit CDX North American Investment Grade 33 index eased moderately to a spread of 108.1 basis points on Monday from 106.97 bps on Friday and a spread of 125.86 bps in the same session a week ago.

The Dow Jones industrial average was up 1.81% over the morning and finished with a 3.19% gain.

Oracle prices $20 billion

Oracle sold $20 billion of senior notes (A3/A+/A-) in six tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $3.5 billion tranche of 2.5% five-year notes priced at 99.963 to yield 2.58%, or a spread of Treasuries plus 210 bps.

The company sold $2.25 billion of 2.8% seven-year notes at 99.785 to yield 2.834%, or a 225 bps over Treasuries spread.

Oracle priced $3.25 billion of 2.95% 10-year notes at 99.897 to yield 2.962%. The notes were sold with a Treasuries plus 225 bps spread.

A $3 billion tranche of 3.6% 20-year notes priced at 99.731 to yield 3.619%, or Treasuries plus 225 bps.

The company placed $4.5 billion of 3.6% 30-year notes at 99.654 to yield 3.619%. The bonds priced at a spread of 225 bps over Treasuries.

Finally, $3.5 billion of 3.85% notes due April 1, 2060 priced at 99.615 to yield 3.869%, or Treasuries plus 250 bps.

Initial price talk on the five-year notes was in the Treasuries plus 250 bps area.

The seven-, 10-, 20- and 30-year notes were talked at the Treasuries plus 265 bps area. The 40-year bonds were talked at the Treasuries plus 290 bps area.

BNY Mellon Capital Markets LLC, BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

The computer software and technology company is based in Redwood City, Calif.

TJX brings $4 billion

TJX priced $4 billion of senior notes (A2/A/) in four tranches on Monday, according to a market source and an FWP filing.

The company sold $1.25 billion of 3.5% five-year notes at 99.596 to yield 3.588%, or a spread of 320 bps over Treasuries.

A $750 million tranche of 3.75% seven-year notes came at 99.931 to yield 3.761% and a Treasuries plus 320 bps spread.

TJX brought $1.25 billion of 3.875% 10-year notes at 99.875 to yield 3.89%, or 320 bps over Treasuries.

The company also sold $750 million of 4.5% 30-year notes at 99.411 to yield 4.536%, or a Treasuries plus 320 bps spread.

The five-, seven- and 10-year tranches were talked to print at the Treasuries plus 350 bps area, while the 30-year notes were talked at the 362.5 bps spread area.

BofA Securities, Deutsche Bank Securities Inc., U.S. Bancorp Investments Inc., HSBC Securities (USA) Inc. and J.P. Morgan were the bookrunners.

The retailer of off-price apparel and home fashions is based in Framingham, Mass.

B.A.T. Capital raises $2.4 billion

B.A.T. Capital priced $2.4 billion of registered senior notes (Baa2/BBB+/) in three tranches on Monday, according to a market source.

BAT Capital sold $900 million of 4.7% seven-year notes with a Treasuries plus 415 bps spread.

A $1 billion tranche of 4.906% 10-year notes priced at a Treasuries plus 425 bps spread.

In the final tranche, the company sold $500 million of 5.282% 30-year notes at a 400 bps spread over Treasuries.

All three tranches were initially talked at the Treasuries plus 450 bps area.

Barclays, BofA Securities, Citigroup Global Markets Inc., Mizuho Securities USA LLC and Santander Investment Securities Inc. were the bookrunners.

British American Tobacco plc, B.A.T. International Finance plc, B.A.T. Netherlands Finance BV and Reynolds American Inc. are the guarantors.

British American Tobacco is a London-based international tobacco company.

Sysco sells $4 billion

Sysco sold $4 billion of senior notes (Baa1/BBB/) in four tranches on Monday, according to a market source.

The company priced $750 million of 5.65% five-year notes at a spread of 525 bps over Treasuries.

Sysco sold $1.25 billion of 5.95% 10-year notes at a Treasuries plus 525 bps spread.

A $750 million tranche of 6.6% 20-year notes priced with a 525 bps over Treasuries spread.

The company also sold $1.25 billion of 30-year notes at a 525 bps spread and a 6.6% coupon.

The tranches were all talked to price in the Treasuries plus 575 bps area.

BofA Securities, Deutsche Bank Securities, Goldman Sachs & Co. LLC, TD Securities (USA) LLC and Wells Fargo were the bookrunners.

Sysco is a Houston-based food service marketing and distribution company.

Exelon prices $2 billion

Exelon priced $2 billion of senior notes (Baa2/BBB+/BBB+) in two tranches on Monday, according to a market source.

A $1.25 billion tranche of 4.05%10-year notes priced with a spread of 337.5 bps over Treasuries.

The company sold $750 million of 4.7% 30-year notes at Treasuries plus 337.5 bps spread.

Both tranches were talked at the Treasuries plus 412.5 bps area.

Barclays, BofA Securities, Goldman Sachs, J.P. Morgan and Wells Fargo were the lead managers.

Exelon is the parent of Exelon Generation and is a utility services holding company based in Chicago.

Anglo American Capital prints

Anglo American Capital priced $1.5 billion of notes (Baa2/BBB/BBB) in two parts on Monday, according to a market source.

The company sold $750 million of 5.375% five-year notes at a spread of 500 bps over Treasuries.

A $750 million tranche of 5.625% 10-year notes priced with a Treasuries plus 500 bps spread.

Both tranches were talked at the 525 bps spread area.

Citigroup, Mizuho and RBC Capital Markets, LLC were the active bookrunners. Standard Chartered Bank was passive.

The company is a financing arm of London-based mining company Anglo American plc.

Aflac prices $1 billion

Aflac sold $1 billion of 3.6% 10-year senior notes (A3/A-/) on Monday at 99.742 to yield 3.631%, or a spread of 295 bps over Treasuries, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 340 bps area.

The bookrunners were Goldman Sachs, Mizuho, Morgan Stanley & Co. LLC, SMBC Nikko Securities America Inc., Wells Fargo, BofA Securities, MUFG and PNC Capital Markets LLC.

The Columbus, Ga.-based company provides supplemental health and life insurance.

Ventas Realty sells notes

Ventas Realty sold $500 million of 4.75% guaranteed senior notes due Nov. 15, 2030 (Baa1/BBB+/BBB+) on Monday at a spread of 430 bps over Treasuries, according to a market source and an FWP filing.

The notes were initially talked to print in the 400 bps spread area.

The notes priced at 97.862 to yield 5.011%.

BofA Securities and Wells Fargo were the bookrunners.

Ventas, Inc. will fully and unconditionally guarantee the notes.

The real estate investment trust for housing and health care properties is based in Chicago.

Edison taps bonds

Southern California Edison (A3/BBB/BBB-) priced an upsized $600 million reopening of its 3.7% first and refunding mortgage bonds due Aug. 1, 2025 on Monday at a spread of 275 bps over Treasuries, according a market source.

Initial guidance was in the Treasuries plus 287.5 bps area.

The deal was upsized from $400 million.

Southern California Edison originally sold $300 million of the 3.7% seven-year bonds on July 30, 2018 at 99.786 to yield 3.735%, or a spread of Treasuries plus 80 bps.

The total outstanding is now $900 million.

J.P. Morgan, Morgan Stanley and TD Securities were the bookrunners.

Southern California Edison is an electric utility company based in Rosemead, Calif.

AEP Transmission prices

AEP Transmission sold $525 million of 3.65% 30-year senior notes (A2/A-/A) on Monday at a spread of Treasuries plus 235 bps, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 275 bps to 287.5 bps area.

The notes priced at 99.964 to yield 3.652%.

Goldman Sachs, KeyBanc Capital Markets Inc., MUFG, SMBC Nikko and U.S. Bancorp were the bookrunners.

Columbus, Ohio-based AEP Transmission is an electric utility and a division of American Electric Power Co., Inc.

Wisconsin Power prints

Wisconsin Power & Light sold $350 million of 3.65% 30-year debentures on Monday at 99.873 to yield 3.657% and a spread of 235 bps over Treasuries, according to a market source and an FWP filing.

The bonds (A3/A/) were initially talked to price at the Treasuries plus 287.5 bps area.

BofA Securities, J.P. Morgan and Wells Fargo were the bookrunners.

The Madison, Wis.-based public utility distributes electricity and natural gas to central and southern Wisconsin.

Oklahoma Gas sells notes

Oklahoma Gas & Electric sold $300 million of 3.25% 10-year senior notes on Monday at 99.949 to yield 3.256% and a spread of 260 bps over Treasuries, according to a market source and an FWP filing.

Initial talk on the notes (A3/A-/A) was in the 300 bps over Treasuries area.

Mizuho, RBC Capital Markets and Wells Fargo were the bookrunners.

The electric utility is based in Oklahoma City.

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