High-grade primary roars to life; Cigna, Toyota, John Deere, Caterpillar, Home Depot price

By Cristal Cody

Tupelo, Miss., Sept. 5 – High-grade issuers flooded the primary market on Tuesday after staying mostly to the sidelines in the previous week.

Issuers including Cigna Corp., Toyota Motor Credit Corp., John Deere Capital Corp., Caterpillar Financial Services Corp., Zoetis Inc., Home Depot Inc., Duke Energy Progress, LLC, Arrow Electronics, Inc. and Southern California Edison Co. priced bonds during the session.

Apple Inc., IBM Credit LLC and Mizuho Financial Group, Inc. also were marketing new notes on Tuesday.

Coming up on Wednesday, Mitsubishi UFJ Lease & Finance Co. Ltd. is expected to kick off a U.S. roadshow for a $500 million dollar-denominated offering of senior notes.

The Markit CDX North American Investment Grade index eased more than 2 basis points on Tuesday to a spread of 59 bps.

Cigna prices $1.6 billion

Cigna sold $1.6 billion fixed-rate senior notes (Baa1/A/BBB+) in two tranches on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $600 million of 3.05% 10-year notes at 99.808 to yield 3.072% and a spread of Treasuries plus 100 bps.

Cigna priced $1 billion of 3.875% 30-year notes at 99.837 to yield 3.884%, or a Treasuries plus 120 bps spread.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for a cash tender offer for up to $1 billion of 8% notes due 2023, 7.65% notes due 2023, 7.875% debentures due 2027, 8.3% step down notes due 2033, 6.15% notes due 2036, 5.875% notes due 2041 and 5.375% notes due 2042 and for general corporate purposes.

Cigna is a Bloomfield, Conn.-based health service company.

Toyota sells two tranches

Toyota Motor Credit (Aa3/AA-/) priced $1.5 billion of series B medium-term notes in two tranches on Tuesday, according to FWP filings with the SEC.

The company sold $600 million of five-year floating-rate notes at par to yield Libor plus 48 bps.

Toyota Motor Credit sold $900 million of 2.15% five-year fixed-rate notes at 99.797 to yield 2.193%, or a spread of Treasuries plus 55 bps.

Citigroup Global Markets, J.P. Morgan Securities, RBC Capital Markets, LLC, Santander Investment Securities Inc. and SMBC Nikko Securities America, Inc. were the lead managers.

Toyota Motor Credit is a Torrance, Calif.-based financing arm and subsidiary of Toyota Motor Corp.

John Deere in primary

John Deere Capital priced $1.5 billion of series G senior medium-term notes (A2/A/A) in three parts on Tuesday, according to FWP filings with the SEC.

The company sold $400 million of five-year floating-rate notes at par to yield Libor plus 48 bps.

John Deere Capital priced $600 million of 2.15% five-year fixed-rate notes at 99.797 to yield 2.193% and a spread of 55 bps over Treasuries.

The company priced $500 million of 2.8% 10-year notes at 99.611 with a 2.845% yield, or Treasuries plus 78 bps.

Goldman Sachs & Co. LLC, BofA Merrill Lynch and MUFG were the bookrunners.

John Deere Capital is a financing arm of Moline, Ill.-based farm equipment supplier Deere & Co.

Caterpillar sells $1.3 billion

Caterpillar Financial Services priced $1.3 billion offering of fixed- and floating-rate series I medium-term notes on Tuesday, according to FWP filings with the SEC.

The company sold $400 million of three-year floating-rate notes at par to yield Libor plus 29 bps.

Caterpillar Financial Services priced $900 million of 1.85% three-year fixed-rate notes at 99.916 to yield 1.879%, or a spread of Treasuries plus 48 bps.

Barclays, J.P. Morgan Securities and Societe Generale were the bookrunners.

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

Zoetis prices $1.25 billion

Zoetis placed $1.25 billion of fixed-rate senior notes (Baa1/BBB/) in two tranches on Tuesday, according to an FWP filing with the SEC.

The company sold $750 million of 3% 10-year notes at 99.444 to yield 3.065% and a spread of Treasuries plus 100 bps.

Zoetis priced $500 million of 3.95% 30-year notes at 9plus 9.408 to yield 3.984%, or a Treasuries 130 bps spread.

Barclays, Citigroup Global Markets, J.P. Morgan Securities, BofA Merrill Lynch, MUFG, BNP Paribas Securities Corp., Goldman Sachs & Co., HSBC Securities (USA) Inc. and TD Securities (USA) LLC were the bookrunners.

Proceeds will be used to repay, prior to maturity, the company’s $750 million of 1.875% senior notes due 2018 and for general corporate purposes.

The real estate investment trust for housing and health care properties is based in Chicago.

Home Depot raises $1 billion

Home Depot sold $1 billion of 2.8% 10-year notes on Tuesday at 99.74 to yield 2.83%, according to an FWP filing with the SEC.

The notes (A2/A/) priced with a spread of Treasuries plus 75 bps.

Barclays, J.P. Morgan Securities, BofA Merrill Lynch and Morgan Stanley were the bookrunners.

Proceeds will be used for general corporate purposes, including repurchases of stock.

Home Depot is an Atlanta-based home improvement retailer.

Duke Energy brings bonds

Duke Energy Progress priced $800 million of first mortgage bonds (Aa3/A/) in two tranches on Tuesday, according to an FWP filed with the SEC.

The company sold $300 million of three-year floating-rate notes at par to yield Libor plus 18 bps.

Duke Energy Progress priced $500 million of 3.6% 30-year bonds at 99.853 to yield 3.608% and a Treasuries plus 92 bps spread.

Goldman Sachs & Co., Mizuho Securities USA Inc., RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used to repay at maturity $200 million of second floating rate series first mortgage bonds due Nov. 20, 2017, to pay down intercompany short-term debt under Duke Energy Progress’ money-pool borrowing arrangement with Duke Energy Corp. and for general corporate purposes.

Raleigh, N.C.-based Duke Energy Progress generates and distributes electricity in North Carolina and South Carolina.

NiSource places notes

NiSource Finance sold $750 million of 3.95% guaranteed notes due March 30, 2048 (Baa2/BBB+/BBB) on Tuesday at a spread of 128 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.892 to yield 3.956%.

Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used to repurchase the company’s 6.125% notes due 2022, up to $175 million of its 6.4% notes due 2018, up to $200 million of its 6.8% notes due 2019 and up to $220 million of its 5.45% notes due 2020 and for general corporate purposes.

The securities are guaranteed by Merrillville, Ind., parent NiSource, a company with businesses in natural gas transmission, storage and distribution, and electricity generation, transmission and distribution.

Arrow Electronics prices

Arrow Electronics priced $500 million of 3.25% seven-year notes (Baa3/BBB-/BBB-) on Tuesday at a spread of 145 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.387 to yield 3.349%.

BofA Merrill Lynch, MUFG and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds will be used to redeem the company's $300 million of 3% notes due 2018 and for general corporate purposes.

Englewood, Colo.-based Arrow Electronics provides products and services to industrial and commercial users of electronic components and enterprise computing.

California Edison reopens

Southern California Edison priced a $300 million add-on to its 4% series 2017A first and refunding mortgage bonds due April 1, 2047 (A3/A+/A) on Tuesday at a spread of 90 bps over Treasuries, according to an FWP filing with the SEC.

The bonds priced at 107.283 to yield 3.594%.

The original $700 million issuance of bonds priced at 99.93 to yield 4.004% and a spread of Treasuries plus 95 bps on March 21. The total outstanding now is $1 billion.

The bookrunners were Barclays, J.P. Morgan Securities and U.S. Bancorp Investments.

Proceeds will be used to repay a term loan due in July 2018, to repay commercial paper borrowings and for general corporate purposes.

Southern California Edison is an electric utility company based in Rosemead, Calif.

Mitsubishi UFJ Lease offers notes

Mitsubishi UFJ Lease & Finance (A3/A/) plans to hold a round of fixed-income investor meetings and calls in the U.S. market for a $500 million dollar-denominated offering of senior notes, according to a market source.

The roadshow starts on Wednesday.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities and Morgan Stanley are the arrangers of the Rule 144A and Regulation S deal.

The Tokyo-based company and subsidiaries provide leasing and asset finance services.

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