Citibank, Coach, Sempra Energy, Harley-Davidson Financial price notes; credit spreads soften

By Cristal Cody

Tupelo, Miss., June 6 – High-grade companies priced more than $5 billion of bonds over the session on Tuesday.

Citibank, NA came with $2.5 billion of three-year bank notes fixed- and floating-rate tranches.

Coach, Inc. priced a $1 billion two-part offering of senior notes to fund its acquisition of Kate Spade & Co.

Deals in the energy sector also continued on Tuesday with two new transactions.

Sempra Energy sold $750 million of 10-year senior notes, while Union Electric Co., doing business as Ameren Missouri, priced $400 million of 10-year senior secured notes.

In bank pricing action, KeyBank NA sold $600 million of five-year senior notes on Tuesday.

Also, Harley-Davidson Financial Services, Inc. placed $400 million of five-year senior medium-term notes.

The Markit CDX North American Investment Grade index softened about 1 basis point to close at a spread of 61 bps.

Citibank sells notes

Citibank priced $2.5 billion of three-year bank notes (A1/A+/) in two parts on Tuesday, a market source said.

The company sold $500 million of floating-rate notes due June 12, 2020 at par to yield Libor plus 50 bps.

Citibank priced $2 billion of 2.1% five-year fixed-rate notes at 99.957 to yield 2.115%, or a spread of Treasuries plus 70 bps.

Citigroup Global Markets Inc. was the bookrunner.

Citibank is a Sioux Falls, S.D.-based commercial and consumer banking products and services company.

Coach prices $1 billion

Coach sold $1 billion of senior notes (Baa2/BBB-/BBB) in two tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company priced $400 million of 3% five-year notes at 99.505 to yield 3.106% and a spread of 140 bps over Treasuries.

Coach sold $600 million of 4.125% 10-year notes at 99.858 to yield 4.142%, or a Treasuries plus 200 bps spread.

Both tranches priced on the tight side of guidance.

BofA Merrill Lynch, J.P. Morgan Securities LLC and HSBC Securities (USA) Inc. were the bookrunners.

Coach announced in May plans to acquire Kate Spade for $18.50 a share in cash. Proceeds from the offering will be used, along with cash on hand, cash on hand at Kate Spade and about $1.1 billion of expected term loans, to fund the acquisition. If the merger has not closed by Feb. 7, 2018, the notes have a special mandatory redemption at 101.

Coach is a New York City-based designer of luxury goods.

Sempra taps primary

Sempra Energy sold $750 million of 3.25% 10-year senior notes (Baa1/BBB+/BBB+) on Tuesday at a spread of Treasuries plus 115 bps, on the tight side of talk, according to a market source and an FWP filing with the SEC.

The notes priced at 99.694 to yield 3.286%.

Citigroup Global Markets, RBC Capital Markets, LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used to repay outstanding commercial paper that bears interest rates of 1.4% per year or less and matures at various dates in June.

The holding company for gas and electric utility subsidiaries is based in San Diego.

Union Electric sells notes

Union Electric, doing business as Ameren Missouri, priced $400 million of 2.95% 10-year senior secured notes at 99.674 to yield 2.988%, according to an FWP filing with the SEC on Tuesday.

The notes (A2/A/) priced with a spread of 85 bps over Treasuries.

Barclays, RBC Capital Markets, Wells Fargo Securities, Goldman Sachs, Morgan Stanley and SMBC Nikko Securities America, Inc. were the bookrunners.

Proceeds will be used together with available funds to repay at maturity $425 million outstanding of the company’s 6.4% senior secured notes due June 15, 2017.

Union Electric, doing business as Ameren Missouri, is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

KeyBank places deal

KeyBank priced $600 million of 2.4% five-year senior notes (A3/A-/A-) on Tuesday at a spread of 70 bps over Treasuries, on the tight side of guidance, according to a market source.

The company dropped an earlier planned five-year floating-rate tranche from the final deal.

Goldman Sachs, J.P. Morgan Securities, KeyBank Capital Markets Inc. and Morgan Stanley were the lead managers.

KeyBank is a Cleveland, Ohio-based regional bank.

Harley-Davidson prints

Harley-Davidson Financial Services priced $400 million of 2.55% five-year senior medium-term notes (A3/A-/A) on Tuesday at a spread of 88 bps over Treasuries, according to a market source.

The notes were talked to price in the Treasuries plus 90 bps area, plus or minus 2 bps.

Citigroup Global Markets, J.P. Morgan Securities, MUFG and U.S. Bancorp Investments were the bookrunners.

Proceeds will be used for general corporate purposes.

The Chicago-based company is the financing arm of Harley-Davidson Inc.

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