AstraZeneca, Atmos Energy, ConEd, Dr Pepper Snapple tap primary market; credit spreads steady

By Cristal Cody

Tupelo, Miss., June 5 – Pricing action stayed strong in the investment-grade bond market on Monday led by a $2 billion three-part notes deal from AstraZeneca plc.

In other new issuance, Atmos Energy Corp. priced $750 million of senior notes in a new 10-year tranche and a reopening of its 4.125% bonds due Oct. 15, 2044.

Air Lease Corp. sold $600 million of five-year senior notes.

Autodesk, Inc. tapped the primary market with a $500 million offering of 3.5% 10-year senior notes.

Consolidated Edison Co. of New York, Inc. sold $500 million of 30-year debentures.

San Diego Gas & Electric Co. placed $400 million of 30-year first mortgage bonds.

Dr Pepper Snapple Group, Inc. came with $400 million add-ons to two existing tranches of senior notes.

Also, Astoria Financial Corp. priced $200 million of three-year senior notes on Monday.

About $25 billion to $30 billion of deal volume is forecast by syndicate sources for the week.

The Markit CDX North American Investment Grade index ended mostly unchanged at a spread of 60 basis points.

AstraZeneca prices

AstraZeneca sold $2 billion of notes (A3/A-/) in three tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

The company priced $250 million of five-year floating-rate notes at par to yield Libor plus 62 bps.

AstraZeneca sold $1 billion of 2.375% five-year fixed-rate notes at 99.682 to yield 2.443% and a spread of Treasuries plus 70 bps.

In the final tranche, the company priced $750 million of 3.125% 10-year notes at 99.49 to yield 3.185%, or a Treasuries plus 100 bps spread.

The bookrunners were Barclays, HSBC Securities (USA) Inc., BofA Merrill Lynch and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, which may include the refinancing of existing debt.

The biopharmaceutical company is based in Cambridge.

Atmos sells new paper, add-on

Atmos Energy priced $750 million of senior notes (A2/A/) in a new 10-year tranche and a reopening of its 4.125% bonds due Oct. 15, 2044 on Monday, according to a market source and an FWP filing with the SEC.

Atmos Energy sold $500 million of 3% notes due June 15, 2027 at 99.725 to yield 3.032% and a spread of 85 bps over Treasuries.

The company priced $250 million in a tap of the 4.125% notes due Oct. 15, 2044 at 103.907 to yield 3.889% and a Treasuries plus 105 bps spread.

Atmos Energy originally issued $500 million of the 4.125% notes on Oct. 15, 2014 at 99.812 to yield 4.136% and a spread of Treasuries plus 103 bps. The total outstanding now is $750 million.

Both tranches priced on the tight side of guidance.

BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Mizuho Securities USA LLC, MUFG and U.S. Bancorp Investments, Inc. were the bookrunners.

Proceeds will be used to repay $250 million of 6.35% senior notes at maturity on June 15 and for general corporate purposes, including repayment of working capital borrowings under its commercial paper program. As of June 2, Amos Energy had about $630 million of commercial paper outstanding with a weighted average annual interest rate of 1.16%.

Atmos Energy is a natural gas distributor and pipeline company based in Dallas.

Air Lease prices notes

Air Lease sold $600 million of 2.625% five-year senior notes (/BBB/BBB) on Monday at 99.553 to yield 2.72%, or a spread of Treasuries plus 98 bps, according to an FWP filing with the SEC.

Citigroup Global Markets, Inc., Goldman Sachs & Co. LLC, JPMorgan and SunTrust Robinson Humphrey, Inc. were the bookrunners.

The Los Angeles aircraft leasing company plans to use the proceeds for general corporate purposes, which may include the purchase of commercial aircraft and the repayment of existing debt.

Autodesk sells $500 million

Autodesk priced a $500 million offering of 3.5% 10-year senior notes on Monday at a spread of Treasuries plus 140 bps, on the tight side of talk in the Treasuries plus 145 bps area, plus or minus 5 bps, according to a market source and an FWP filing with the SEC.

The notes (Baa2/BBB/) priced at 99.372 to yield 3.575%.

The bookrunners were Citigroup, Morgan Stanley, U.S. Bancorp Investments, Inc., JPMorgan, BofA Merrill Lynch and Wells Fargo.

Proceeds will be used for general corporate purposes, which includes repaying $400 million of 1.95% notes due Dec. 15, 2017.

Autodesk is a design software and services company based in San Rafael, Calif.

ConEd sells debentures

Consolidated Edison Co. of New York sold $500 million of 3.875% 30-year series 2017A debentures (A2/A-/A-) at 99.63 to yield 3.896%, according to an FWP filing with the SEC on Monday.

The bonds priced with a Treasuries plus 105 bps spread.

BofA Merrill Lynch, Wells Fargo, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, including to repay short-term debt bearing interest at variable rates.

The New York-based electric, gas and steam company is a subsidiary of holding company Consolidated Edison, Inc.

San Diego Gas sells notes

San Diego Gas & Electric priced $400 million of 3.75% 30-year series RRR first mortgage bonds on Monday at 99.554 to yield 3.775%, according to a market source and an FWP filing with the SEC.

The bonds (A2/A+/AA-) priced with a spread of 93 bps over Treasuries.

The bookrunners were CastleOak Securities, LP, Credit Agricole Securities, Credit Suisse Securities (USA) LLC, Goldman Sachs and SMBC Nikko Securities America, Inc.

Proceeds will become part of the company’s general treasury funds and used to repay outstanding commercial paper that bears interest rates up to 1% annually and matures at various dates in June.

The San Diego-based gas and electric utility is a subsidiary of Sempra Energy.

Dr Pepper reopens

Dr Pepper Snapple Group priced $400 million add-ons to its senior notes (Baa1/BBB+/) due 2027 and 2045 in a private Rule 144A and Regulation S offering on Monday, according to a market source.

The company sold $100 million in the reopening of its 3.43% senior notes due June 15, 2027 at a spread of 108 bps over Treasuries, on the tight side of talk.

Dr Pepper originally sold $400 million of the notes on Dec. 5 at 99.956 to yield 3.435% and a spread of Treasuries plus 105 bps.

Dr Pepper priced a $300 million reopening of its 4.5% senior notes due Nov. 15, 2045 at a Treasuries plus 135 bps spread. The notes priced on the tight side of guidance.

The company originally sold $250 million of the 2045 notes on Oct. 29, 2015 at 99.738 to yield 4.516%, or Treasuries plus 155 bps.

The active bookrunners were Goldman Sachs, JPMorgan and Morgan Stanley. BofA Merrill Lynch was passive.

Proceeds will be used to fund the purchase of the company’s outstanding 7.45% notes due 2038 and 6.82% notes due 2018 in a tender offer, according to a company news release. Any proceeds not used in the notes purchase will be used for general corporate purposes.

Dr. Pepper is a maker of non-alcoholic beverages based in Plano, Texas.

Astoria prices $200 million

Astoria Financial (Baa3/BBB-/BBB-) sold $200 million of 3.5% three-year senior notes on Monday at par to yield a spread of Treasuries plus 206 bps, according to an FWP filing with the SEC.

Sandler O’Neill + Partners, LP was the bookrunner.

Proceeds will be used to repay the company’s 5% senior notes due June 19, 2017 and for general corporate purposes. As of March 31, the notes had $250 million outstanding, according to a press release from Astoria Financial on Monday.

Astoria Financial is a Lake Success, N.Y.-based savings and loan holding company of Astoria Bank and subsidiaries. Astoria Financial entered into a merger agreement in March with Montebello, N.Y.-based Sterling Bancorp, with Sterling National Bank to be the surviving bank following the merger.

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