Ares, BGC, Blackstone/GSO, Protective Life, JBIC price; PVH, Realty Income, Simon improve

By Cristal Cody

Tupelo, Miss., July 8 – A few issuers priced corporate and sovereign, supranational and agency bonds in the high-grade primary market on Wednesday.

Ares Capital Corp. sold $750 million of senior notes due Jan. 15, 2026 (Baa3/BBB-/BBB) more than 17 basis points tighter than talk.

Protective Life Global Funding came by with $400 million of five-year senior secured notes (A1/AA-/A+) in an offering upsized from $300 million.

Blackstone/GSO Secured Lending Fund priced an upsized $400 million of three-year senior notes (Baa3//BBB-) on Wednesday. The deal was increased from $300 million.

Also on Wednesday, BGC Partners, Inc. (/BBB-/BBB-) sold $300 million of long five-year senior notes 25 bps better than initial talk.

In SSA pricing action during the session, Japan Bank for International Cooperation sold $2.5 billion of five-year guaranteed bonds (A1/A+/) tighter than guidance.

In addition, Fannie Mae priced $7 billion of three-year Benchmark notes on Wednesday.

Additional SSA supply is expected from Tokyo Metropolitan Government (/A+/) on Thursday. The issuer is marketing a dollar-denominated offering of five-year senior notes with initial talk in the mid-swaps plus 54 bps area.

Also, International Finance Corp. (Aaa/AAA/) is offering dollar-denominated five-year global notes with talk in the mid-swaps plus 14 bps area.

About $17 billion of corporate high-grade bonds and nearly $15 billion of SSA notes have priced week to date.

About $20 billion to $25 billion of deal volume is expected this week.

The Markit CDX North American Investment Grade 33 index eased nearly 1 bp to close the day at a spread of 73.47 bps.

High-grade credit spreads are forecast to tighten back to pre-covid-19 levels in the second half of the year based on the extensive policy support given to the corporate markets from the Federal Reserve, according to a BNP Paribas research note released on Wednesday.

Fallen angel risk for high-grade issuers also is declining with 3% of issuers now expected to lose their rating versus a previous estimate of 5.5%, according to the report.

U.S. fallen angel volumes should total no more than $160 billion in 2020 versus the $134 billion year to date – “still the biggest downgrade wave ever, but well short of our $210 [billion] estimate at the start of the Covid-19 crisis,” the BNP analysts said.

New issues tighten

New issues are trading mostly steady to stronger in the secondary market this week, sources report.

PVH Corp. 4.625% senior notes due July 10, 2025 (Baa3/BBB-/) that priced on Monday were last seen tighter at 412 bps bid.

The company sold $500 million of the notes in a Rule 144A and Regulation S offering on Monday at a spread of 440 bps over Treasuries.

Initial price talk was in the 475 bps to 500 bps area.

The deal was upsized from $400 million.

Realty Income Corp.’s 3.25% senior notes due Jan. 15, 2031 (A3/A-/BBB+) reopened on Monday have firmed about 8 bps in secondary trading.

The company priced a $350 million add-on to the notes on Monday at 108.241 to yield 2.341% and a spread of 165 bps over Treasuries.

The issue was first priced in a $600 million offering on May 6 at 98.987 to yield 3.364%, or Treasuries plus 265 bps. The total outstanding is now $950 million.

Simon Property Group LP’s $2 billion of notes (A2/A/) priced in three parts on Monday also were better in secondary trading.

The company’s reopened 3.5% notes due Sept. 1, 2025 were seen late afternoon trading with a 109 handle.

Simon Property priced a $500 million add-on on Monday at 107.396 to yield 1.91%, or a Treasuries plus 160 bps spread.

The issue originally priced in a $600 million tranche on Aug. 10, 2015 at 99.354 to yield 3.577% and a spread of 135 bps over Treasuries. The total outstanding is now $1.1 billion.

The company’s 3.8% notes due July 15, 2050 climbed to 102.17 over Wednesday’s session.

Simon Property sold $750 million of the 30-year notes at 99.308 to yield 3.839%, or a spread of 240 bps over Treasuries.

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