KfW prices upsized $1.5 billion green notes; Duke Energy, Time Warner notes firm; Abbott eases

By Cristal Cody

Eureka Springs, Ark., Nov. 22 – KfW priced an upsized $1.5 billion of five-year global notes on Tuesday as the sole high-grade bond issuer in the U.S. primary market.

In the Canadian primary market, CI Financial Corp. priced C$200 million of 2.775% five-year debentures at par to yield a spread of 177 basis points over the interpolated Government of Canada bond curve.

“Tomorrow is still a good day, certainly opportunities for issuance, but that would likely be it for the week,” a Canadian syndicate source said.

The U.S. bond markets will be closed on Thursday for the Thanksgiving Day holiday and will close early on Friday.

The Markit CDX North American Investment Grade index tightened 2 bps to close the day at a spread of 74 bps.

In the secondary market, Duke Energy Corp.’s 2.65% senior notes due 2026 traded about 3 bps better on Tuesday.

AT&T Inc.’s 4.125% notes due 2026 were modestly better, and Time Warner Inc.’s 2.95% notes due 2026 firmed about 3 bps.

Abbott Laboratories’ tranche of 3.75% notes due 2026 traded softer earlier in the day.

KfW upsizes

KfW (Aaa/AAA) sold an upsized $1.5 billion of 2% five-year global dollar-denominated notes at 99.749 and a spread of Treasuries plus 28.4 bps on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The green bonds due Nov. 30, 2021 were talked to price in the mid-swaps plus 31 bps area.

The deal was upsized from $1 billion.

BofA Merrill Lynch, Goldman Sachs International and Societe Generale were the bookrunners.

The notes are guaranteed by the Federal Republic of Germany.

Proceeds will be used for general business purposes. KfW plans to allocate an amount equal to the net proceeds to an internal account used to track allocation of funds from its green bond issuances.

KfW is a government-backed bank based in Frankfurt.

Duke Energy improves

Duke Energy’s 2.65% notes due 2026 tightened about 3 bps over the day to trade at 112 bps bid, a market source said.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps plus Treasuries.

The diversified energy company is based in Charlotte, N.C.

AT&T modestly better

AT&T’s 4.125% notes due 2026 traded about 1 bp tighter on Tuesday at 167 bps bid, according to a market source.

The notes were quoted trading at 146 bps bid on Oct. 21 before AT&T announced plans to acquire Time Warner.

AT&T priced a $900 million add-on to the bonds on May 3, 2016 at Treasuries plus 150 bps. The notes originally were sold on Jan. 29, 2016 in a $1.5 billion offering at 195 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner firms

Time Warner’s 2.95% notes due 2026 firmed about 3 bps on Tuesday to 143 bps bid, a market source said.

The 10-year notes traded in the 112 bps bid area before the merger deal with AT&T was announced in October.

Time Warner sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.

The media and entertainment company is based in New York.

Abbott notes ease

Abbott Laboratories’ 3.75% notes due 2026 were quoted about 5 bps softer at 154 bps offered earlier in the session, according to a market source.

Abbott Laboratories sold $3 billion of the notes (Baa3/A+) on Thursday at a spread of 155 bps over Treasuries.

The pharmaceutical health-care products company is based in Abbott Park, Ill.

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