Anglo American, Hartford, Idaho Power sell notes; Sprint, Welltower hold investor calls

By Cristal Cody

Tupelo, Miss., March 13 – At least three high-grade bond issuers tapped the primary market on Tuesday following more than $14 billion of volume in the previous session.

Anglo American Capital plc came with $650 million of 10-year notes after launching the issue on Monday.

Hartford Financial Services Group, Inc. sold $500 million of 30-year senior notes.

Idaho Power Co. priced $220 million of 30-year first mortgage bonds.

Several deals are forming as issuers complete roadshows, according to market sources.

Sprint Corp. subsidiaries Sprint Spectrum Co. LLC, Sprint Spectrum Co. II LLC and Sprint Spectrum Co. III LLC plan to price $3.9 billion of wireless spectrum-backed senior secured notes (Baa2//BBB) in two tranches following a telephone roadshow on Monday and Tuesday, a source said.

Also on Tuesday, Toledo, Ohio-based real estate investment trust Welltower Inc. (Baa1/BBB+/BBB+) held fixed income investor calls arranged by BofA Merrill Lynch, Deutsche Bank Securities Inc. and MUFG, according to a market source.

On Monday, Valero Energy Partners LP (Baa3/BBB-/BBB-) held fixed income investor calls, a source said. Barclays, Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc. and MUFG are the arrangers.

London-based Rio Tinto plc (A3/A/A-) completed a weeklong roadshow in the United States on Friday, a source said. J.P. Morgan Securities LLC was the arranger.

Supply is expected to be in the $30 billion to $35 billion range over the week, according to market sources.

There “is issuance everywhere,” Hans Mikkelsen, an analyst with BofA Merrill Lynch, said in a note released on Tuesday.

High-yield, European government and U.S. Treasury supply all are busy this week, according to the note.

“On top of that, demand has weakened, as inflows to U.S. high grade bond funds have declined materially and their European counterparts are actually seeing outflows,” Mikkelsen said. “At the same time a lot of foreign investors are sidelined due to the high cost of dollar hedging and being in the last part of the Japanese fiscal year.”

The Markit CDX North American Investment Grade 29 index closed modestly softer on Tuesday at a spread of 54 basis points after tightening about 1 bp in the previous session.

Anglo American in primary

Anglo American Capital priced $650 million of 4.5% 10-year notes (Baa3/BBB-/BBB-) on Tuesday on top of guidance at a spread of 170 bps over Treasuries, according to a market source.

Credit Suisse Securities, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were the bookrunners.

Parent company Anglo American plc priced its first bond offering as an investment-grade rated issuer on Sept. 6, 2017 when it brought $1.3 billion of notes in two tranches to the primary market. Anglo American was upgraded to investment grade in August by S&P Global Ratings and Fitch Ratings and in September by Moody’s Investors Service.

Anglo American Capital is a financing arm of the London-based mining company.

Hartford prices $500 million

Hartford Financial Services priced $500 million of 4.4% 30-year senior notes (Baa2/BBB+) on Tuesday at a spread of 135 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes came at 98.997 to yield 4.461%.

Initial price talk on the notes was in the Treasuries plus 135 bps to 140 bps spread area.

Citigroup Global Markets Inc., BofA Merrill Lynch, JPMorgan and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds from the deal will be used to repay at maturity the company’s $320 million of senior notes due 2018 on March 15 and for general corporate purposes.

Hartford Financial is a Hartford, Conn., financial services holding company and parent company of Hartford Insurance Co.

Idaho Power taps market

Idaho Power priced $220 million of 4.2% 30-year first mortgage bonds, series K secured medium-term notes, on Tuesday at 99.63 and a spread of Treasuries plus 110 bps, according to a market source and an FWP filing with the SEC.

The bonds (A1/A-) were talked to price with a spread in the Treasuries plus 105 bps to 110 bps range.

JPMorgan, Wells Fargo, KeyBanc Capital Markets Inc., BofA Merrill Lynch, MUFG, U.S. Bancorp and BNY Mellon Capital Markets, LLC were the underwriters.

Proceeds will be used to pay at or prior to maturity $130 million of the company’s 4.5% first mortgage bonds due March 2020 and to fund a portion of its capital requirements.

Idaho Power is an electric power utility based in Boise, Idaho.

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