KfW prices $4 billion; National Rural Utilities taps primary market; Whole Foods notes ease

By Cristal Cody

Tupelo, Miss., Aug. 23 – KfW led pricing action in the high-grade market on Wednesday with a $4 billion offering of two-year global senior notes.

Also on Wednesday, National Rural Utilities Cooperative Finance Corp. tapped the primary market with a $350 million offering of five-year senior medium-term notes.

Development Bank of Japan was expected to price $1.8 billion of five- and 10-year notes with the five-year tranche set to price at mid-swaps plus 42 basis points and the 10-year tranche to print at mid-swaps plus 59 bps.

Deal volume remains thin and is expected to stay light until after the Labor Day holiday.

The Markit CDX North American Investment Grade index eased about 1 bp to a spread of 61 bps during the session.

In the secondary market, Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) headed out about 1 bp softer at 77 bps bid following the company clearing two hurdles with its merger with Amazon.com, Inc., a source said.

Amazon.com announced in June it plans to purchase the organic and natural foods grocer for $13.7 billion in cash.

The company priced $16 billion of bonds in seven tranches in the previous week to finance the acquisition.

On Wednesday, the Federal Trade Commission said in a statement it looked at whether the deal would “substantially” lessen competition and has elected to let the acquisition continue.

Whole Foods shareholders also approved the merger on Wednesday.

Austin, Texas-based Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at 99.861 to yield 5.218% and a spread of Treasuries plus 300 bps.

KfW sells $4 billion

KfW (Aaa/AAA/AAA) priced $4 billion of 1.5% two-year global senior notes at 99.952 and a spread of mid-swaps minus 4 bps, according to a market source and an FWP filing with the Securities and Exchange Commission on Wednesday.

KfW earlier set the spread for the notes at mid-swaps minus 4 bps.

BofA Merrill Lynch, BNP Paribas Securities Corp. and J.P. Morgan Securities LLC were the bookrunners.

Demand for the issue was more than $4.5 billion, the source said.

KfW is a Frankfurt-based government-backed bank.

National Rural prices

National Rural Utilities Cooperative Finance sold $350 million of 2.3% series D five-year senior medium-term notes (A1/A/A+) on Wednesday at a spread of 55 bps over Treasuries, according to an FWP filing with the SEC.

The notes (A2/A/A) priced at 99.98 to yield 2.304%.

The agents were MUFG, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc., PNC Capital Markets LLC, J.P. Morgan Securities, KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, Regions Securities LLC, SunTrust Robinson Humphrey, Inc. and ICBC Standard Bank Plc.

The market lender for electric cooperatives is based in Herndon, Va.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.