Caterpillar sells $200 million; primary action thins; Time Warner flat; AT&T, Duke soften

By Cristal Cody

Eureka Springs, Ark., Dec. 16 – Caterpillar Financial Services Corp. tapped the high-grade primary market on Friday as the lone reported issuer with a $200 million offering of two-year floating-rate notes.

UnitedHealth Group Inc. provided additional details of its $1.5 billion two-tranche notes sale brought to market on Thursday.

The high-grade market is expected to wind down headed into the Christmas holiday with little to no deal volume expected in the week ahead, according to market sources.

The Markit CDX North American Investment Grade index closed on Friday mostly unchanged at a spread of 69 basis points.

Bonds from Time Warner Inc. and AT&T Inc., which announced plans to acquire Time Warner in October in a deal that U.S. president-elect Donald Trump has opposed, traded flat to modestly weaker on Friday.

Duke Energy Corp.’s 2.65% senior notes due 2026 eased about 1 bp.

Caterpillar sells floaters

Caterpillar Financial Services (A3/A/) priced $200 million of series H two-year floating-rate medium-term notes at par to yield Libor plus 45 bps on Friday, according to an FWP filing with the Securities and Exchange Commission.

The notes are due Dec. 21, 2018.

BofA Merrill Lynch was the bookrunner.

Nashville-based Caterpillar Financial Services is a financing arm of Caterpillar Inc.

UnitedHealth details deal

UnitedHealth Group provided additional details of its previously reported $1.5 billion two-part offering on Thursday of fixed-rate notes (A3/A+/A-) in an FWP filing with the SEC.

The company sold $750 million of 3.45% 10-year notes at 99.896 to yield 3.462% and a spread of 85 bps over Treasuries.

UnitedHealth priced $750 million of 4.2% 30-year notes at 99.253 to yield 4.244%. The bonds priced with a Treasuries plus 105 bps spread.

The notes priced on the tight side of guidance, according to a market source.

BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the bookrunners.

The Minnetonka, Minn.-based diversified health company plans to use the proceeds from the offering to repay commercial paper borrowings and for other general corporate purposes.

AT&T eases

AT&T’s 4.125% notes due 2026 eased about 1 bp on Friday to 157 bps bid, according to a market source.

AT&T (Baa1/BBB+/A-) priced a $900 million add-on to the bonds on May 3, 2016 at Treasuries plus 150 bps. The notes originally were sold on Jan. 29, 2016 in a $1.5 billion offering at 195 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner flat

Time Warner’s existing 2.95% notes due 2026 were unchanged on the day at 143 bps bid, a market source said.

Time Warner (Baa2/BBB/BBB+) sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.

The media and entertainment company is based in New York.

Duke Energy softens

Duke Energy’s 2.65% notes due 2026 eased 1 bp to 104 bps bid in secondary trading, a market source said.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps plus Treasuries.

The diversified energy company is based in Charlotte, N.C.

© 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.