Lam, Santander, Dominion, USAA, Quest among day’s issuers; credit spreads mostly flat

By Cristal Cody

Eureka Springs, Ark., May 23 – As expected, Monday’s primary market was busy with investment-grade issuers bringing deals ahead of the Memorial Day holiday.

The week’s issuance is expected to be strong through Wednesday with as much as $25 billion of volume forecast.

High-grade issuers including Lam Research Corp., Santander Holdings USA Inc., Dominion Resources Inc., USAA Capital Corp., Northern States Power Co., Quest Diagnostics Inc., Tri-State Generation and Transmission Association, Inc. and Eversource Energy tapped the market on Monday.

Lam Research sold $2.4 billion of notes in three tranches on Monday including $800 million of 2.8% notes due June 15, 2021 with a spread of 145 basis points over Treasuries, $600 million of 3.45% notes due June 15, 2023 with a spread of 185 bps over Treasuries and $1 billion of 3.9% notes due June 15, 2026 at 210 bps over Treasuries.

Proceeds will be used to fund the cash portion of the company’s acquisition of KLA-Tencor Corp. and to prepay KLA-Tencor’s outstanding term loans.

The Markit CDX North American Investment Grade index ended the day mostly unchanged at a spread of 84 basis points.

In the secondary market, AT&T Inc.’s 4.125% senior notes due 2026 headed out 3 bps wider.

Southern Co.’s senior notes (Baa2/BBB+/A-) were quoted flat to about 1 bp softer earlier in the day.

Dell, Inc.’s 6.02% senior secured notes due 2026 were seen 2 bps weaker early Monday.

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