Starbucks, ConEd, Kansas City Southern bring new deals; AbbVie firms; credit spreads soften

By Cristal Cody

Eureka Springs, Ark., May 11 – The high-grade primary market saw new deals on Wednesday from issuers including Starbucks Corp., Consolidated Edison, Inc., Kansas City Southern and Boardwalk Pipelines, LP.

Starbucks sold $750 million in a tap of its 2.1% five-year notes and in new 10-year sustainability notes during the session.

Consolidated Edison brought $500 million of five-year debentures.

Boardwalk Pipelines sold $550 million of 10-year notes.

Kansas City Southern tapped the market with a $250 million sale of 10-year notes.

Credit spreads softened on Wednesday. The Markit CDX North American Investment Grade index eased 2 basis points to a spread of 82 bps.

AbbVie Inc.’s notes priced on Monday were tighter in secondary trading.

Starbucks sells two tranches

Starbucks sold $750 million in a tap of its 2.1% five-year notes and in new 10-year sustainability notes on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

Starbucks priced $250 million of the 2.1% notes due Feb. 4, 2021 at 102.391 to yield 1.563% and a spread of 37 bps plus Treasuries.

The company originally sold the notes on Feb. 1 in a $500 million tranche at 99.943 to yield 2.112% and a spread of 75 bps over Treasuries. The total outstanding is $750 million.

Starbucks also priced $500 million of 2.45% 10-year senior notes at 99.768 to yield 2.476% and a spread of 75 bps over Treasuries.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC were the bookrunners.

Proceeds from the add-on will be used for general corporate purposes. Proceeds from the new notes will be used for eligible sustainability projects, including in coffee purchases, development and operation of farmer support centers and new and refinanced loans through Starbucks’ $50 million global farmer fund.

Starbucks is a Seattle-based coffee retailer.

ConEd prints $500 million

Consolidated Edison sold $500 million of 2% five-year series 2016A debentures (A3/BBB+/BBB+) at 99.939 to yield 2.013% on Wednesday, according to an FWP filing with the SEC on Wednesday.

The debentures priced with a spread of 83 bps over Treasuries.

Barclays, Mizuho Securities (USA) Inc., Wells Fargo, BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Consolidated Edison is a New York-based holding company for Consolidated Edison of New York, Inc.

Boardwalk Pipelines prices

Boardwalk Pipelines sold $550 million of 5.95% 10-year senior notes on Wednesday at 98.86 to yield 6.103%, according to an FWP filing with the SEC.

The notes priced with a spread of 437.5 bps over Treasuries.

Barclays, Deutsche Bank Securities Inc., JPMorgan, Citigroup, MUFG, Mizuho, RBC Capital Markets, LLC and Wells Fargo were the lead managers.

The bonds are fully and unconditionally guaranteed by Boardwalk Pipeline Partners, LP.

Proceeds will be used for general partnership purposes, which may include growth capital expenditures, repayment of future maturities of long-term debt and additions to working capital. Pending such use, the company intends to temporarily use the proceeds to reduce borrowings under its revolving credit facility.

Boardwalk Pipelines is a subsidiary of Houston-based Boardwalk Pipeline Partners.

Kansas City Southern prices

Kansas City Southern priced $250 million of 3.125% 10-year senior notes on Wednesday at 99.487 to yield 3.185%, according to an FWP filing with the SEC.

The notes priced with a spread of 145 bps over Treasuries.

JPMorgan, BofA Merrill Lynch, Morgan Stanley and Citigroup were the bookrunners.

The bonds are fully and unconditionally guaranteed by some Kansas City Southern domestic subsidiaries.

Proceeds will be used to repay at maturity Kansas City Southern de Mexico, SA de CV’s outstanding floating-rate senior notes due 2016 and Kansas City Southern’s outstanding floating-rate notes due 2016 and for general corporate purposes.

The rail transportation holding company for Kansas City Southern Railway Co. is based in Kansas City, Mo.

AbbVie tightens

In secondary trading, AbbVie’s 2.3% notes due 2021 were seen early in the day at 109 bps offered, according to a market source.

The company sold $1.8 billion of the notes at a spread of 115 bps over Treasuries on Monday.

Abbie’s $2 billion tranche of 3.2% notes due 2026 traded tighter at 141 bps offered. The notes priced on Monday at Treasuries plus 150 bps.

The biopharmaceutical company is based in Abbott Park, Ill.

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