TPG prices $300 million; Wells Fargo firms; Walmart tightens; credit spreads, inflows improve

By Cristal Cody

Tupelo, Miss., Oct. 25 – TPG Specialty Lending Inc. priced $300 million of five-year notes on Friday in its first high-grade bond offering since Jan. 17, 2018.

The new issue came at a spread of 245 basis points over Treasuries.

In the company’s 2018 offering, TPG sold $150 million of 4.5% notes due Jan. 22, 2023 at a spread of 212.5 bps over Treasuries.

More than $12 billion of investment-grade bonds priced over the week, compared to about $15 billion to $20 billion of supply anticipated by sources.

A rush of issuance in the previous session pushed the week’s deal totals into double digits.

Wells Fargo & Co.’s $6.5 billion of medium-term notes priced in two tranches in the week’s biggest bond offering tightened about 3 bps to 4 bps in the secondary market, a source said.

The company’s $3 billion tranche of 2.406% fixed-to-floating-rate notes due Oct. 20, 2025, which priced Thursday at a spread of 82 bps over Treasuries, improved about 3 bps.

The rate on the notes will convert to a floating rate of Libor plus 82.5 bps on Oct. 30, 2024.

Initial price talk on the tranche was in the Treasuries plus 100 bps to 105 bps spread area.

In other secondary trading, bonds in the retail sector were steady to tighter on the day after Amazon.com, Inc. posted softer-than-expected third quarter earnings in the previous session.

Kroger Co.’s senior notes (Baa1/BBB/BBB) were flat to about 1 bp better on Friday, a market source said.

Walmart Inc.’s notes traded flat to about 6 bps tighter.

The retailer’s 3.25% notes due July 8, 2029 firmed 6 bps during the session.

The Markit CDX North American Investment Grade 33 index headed out before the weekend 1 bp tighter at a spread of 53.5 bps.

Elsewhere, flows improved for the past week ended Wednesday for all fixed income sectors excluding high yield, according to a BofA Merrill Lynch research note released Friday.

Overall inflows to bonds rose to $7.75 billion from $6.42 billion in the previous week.

High-grade inflows for corporates, agencies, Treasuries and mortgages rose to $4.21 billion from $3.79 billion in the previous week.

Higher inflows to the short-term high-grade space of $1.6 billion from $780 million in the prior week offset slower, excluding short-term, inflows that softened to $2.61 billion from $3.01 billion a week earlier, according to the report.

Inflows to high-grade funds rose to $2.3 billion this past week from $1.5 billion, while inflows to ETFs declined to $1.91 billion from $2.29 billion in the prior week, the report said.

TPG taps primary

TPG Specialty Lending priced $300 million of 3.875% five-year notes (Baa3/BBB-/BBB-) on Friday at a spread of 245 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.032 to yield 4.091%.

Bookrunners were BofA Securities, Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., SunTrust Robinson Humphrey, Inc., Mizuho Securities USA LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, SMBC Nikko Securities America, Inc., MUFG and HSBC Securities (USA) Inc.

TPG Specialty Lending is a Fort Worth, Texas-based specialty finance company focused on lending to middle-market companies.

Walmart firms

Walmart’s 3.25% notes due July 8, 2029 traded about 6 bps tighter on Friday at 57 bps bid in the secondary market, a source said.

Walmart sold $1.25 billion of the notes (Aa2/AA/AA) on April 16 at a Treasuries plus 67 bps spread.

The discount retailer is based in Bentonville, Ark.

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