Texas Instruments, NextEra tap market; busy pipeline eyed; new issues mostly improve

By Cristal Cody

Tupelo, Miss., March 1 – The investment-grade primary market remained active for a second consecutive Friday with new issuance priced during the session.

Texas Instruments Inc. sold $750 million of notes due March 15, 2039 on the tight side of guidance.

NextEra Energy Capital Holdings Inc. came with $400 million of three-year guaranteed debentures. The company previously was in the primary market on Feb. 22 with an $800 million two-part bond deal.

In other activity on Friday, Leggett & Platt, Inc. (Baa1/BBB) held fixed income investor calls for a possible deal, a source said. J.P. Morgan Securities LLC, MUFG, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the arrangers.

More than $24 billion of high-grade bonds have priced week to date, compared to forecasts of about $25 billion to $30 billion of weekly supply.

In the week ahead, syndicate sources expect a busy calendar with volume forecasts of about $25 billion to $30 billion.

About $100 billion to $120 billion of overall corporate investment-grade issuance is expected for March, according to market sources.

“March is usually one of the busiest months for new issue supply, accounting for 11% of annual supply on average since 2010,” BofA Merrill Lynch credit strategist Yunyi Zhang said in a report released on Friday. “However, with a number of issuers front-loading supply into February given strong market tone, as well as heightened reverse Yankee volumes, we expect this March to be lighter than usual.”

The Markit CDX North American Investment Grade 31 index improved more than 1 basis point over the day to head out at a spread of 59 bps.

In the secondary market, Texas Instruments’ new 3.875% notes due March 15, 2039 traded about 1 bp tighter.

New issues priced this week were mostly tighter in secondary trading, a source said.

Mitsubishi UFJ Financial Group, Inc.’s $5.5 billion five-part offering of senior notes (A1/A-/A) that priced on Tuesday was mixed with the floating-rate notes about 1 bp softer and the fixed-rate tranches about 2 bps to 7 bps tighter.

J.B. Hunt Transport Services Inc.’s $700 million of 3.875% senior notes due March 1, 2026 that priced on Tuesday firmed about 7 bps on the bid side.

In other market activity, for the week ended Feb. 27, Lipper US Fund Flows reported inflows climbed to $3.9 billion for corporate investment-grade funds from $1.95 billion in the previous week and $1.89 billion in the prior week.

The week saw “another big inflow to high grade,” Yuri Seliger, an analyst with BofA Merrill Lynch, said in a research report released on Friday.

Inflows to U.S. high grade mutual funds and ETFs jumped to $5.01 billion for the week ended Wednesday, up from a $990 million inflow a week earlier.

The jump followed a $6.51 billion inflow in the first week of February that was the fourth largest on record, Seliger said.

“This past week, the increase in buying of high grade was about equally split between short-term and [excluding] short-term,” Seliger said.

Short-term buying rose to $2.7 billion for the past week from $710 million in the previous week, while ETF inflows rose to $1.47 billion from $1.12 billion a week earlier.

Texas Instruments prices

In pricing action on Friday, Texas Instruments sold $750 million of 3.875% notes due March 15, 2039 (A1/A+) at 99.106 to yield 3.94%, or a spread of 82 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced on the tight side of guidance in the Treasuries plus 85 bps spread area and better than initial talk in the 100 bps spread area.

Barclays, JPMorgan, MUFG, Citigroup Global Markets Inc., BofA Merrill Lynch, Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

The notes firmed to 81 bps bid in the secondary market.

Texas Instruments is a Dallas-based semiconductor designer and manufacturer.

NextEra sells $400 million

Also, NextEra Energy Capital priced $400 million of 3.3% debentures due Aug. 15. 2022 at a spread of Treasuries plus 80 bps on Friday, according to an FWP filing.

The notes (Baa1/BBB+) priced at 99.956 to yield 3.314%.

Credit Suisse Securities (USA) LLC was the bookrunner.

NextEra Energy, Inc. will guarantee the notes.

NextEra Energy Capital is a subsidiary of the Juno Beach, Fla.-based energy company.

MUFG active

In the secondary market, Mitsubishi UFJ Financial Group’s 3.407% notes due March 7, 2024 traded on Friday at 92 bps bid, 88 bps offered, a source said.

The company sold $1.5 billion of the five-year notes on Tuesday at par to yield a spread of 95 bps over Treasuries.

The bank is based in Tokyo.

J.B. Hunt firms

J.B. Hunt Transport Services’ 3.875% senior notes due March 1, 2026 were quoted in the secondary market at 128 bps bid, 123 bps offered, a market source said.

The notes (BBB+) priced in a $700 million offering on Tuesday at a spread of 135 bps over Treasuries.

The issue is guaranteed by J.B. Hunt Transport, Inc.

J.B. Hunt is a Lowell, Ark.-based provider of supply chain solutions.

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