Steel Dynamics, Quest Diagnostics, Welltower, BP Capital price; Apollo markets dollar notes

By Cristal Cody

Tupelo, Miss., Dec. 9 – Steel Dynamics, Inc. led deal volume in the high-grade bond market on Monday with a $1 billion two-part offering of fixed-rate senior notes that priced tighter than guidance.

Also during the session, Quest Diagnostics Inc. sold of $800 million of long 10-year senior notes.

Welltower Inc. came with $500 million of green senior notes due Feb. 15, 2027.

In addition, BP Capital Markets America Inc. priced $500 million of guaranteed notes due March 30, 2050.

In other activity, Apollo Management Holdings LP marketed a dollar-denominated Rule 144A and Regulation S offering of subordinated notes.

About $5 billion to $10 billion of supply is forecast this week with volume expected to thin over the remainder of the year, according to market sources.

Investment-grade issuers priced more than $15 billion of paper last week, in line with forecasts of about $15 billion to $20 of deal volume.

The bulk of issuance this week is expected to be front-loaded ahead of the Federal Reserve’s monetary policy rate decision on Wednesday, sources said.

No changes in the Federal Reserve’s monetary policy are expected at the final meeting of 2019, a source said.

The Federal Reserve has trimmed rates three times this year. The final cut announced in October lowered the target range for the federal funds rate to 1½% to 1¾%.

The Markit CDX North American Investment Grade 33 index closed Monday about 1 bp wider at a spread of 50.1 bps.

Elsewhere, Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 reopened a week ago remained better than issuance in the secondary market on Monday. The notes were seen about 1 bp softer from where they were quoted on Friday.

Steel Dynamics prices $1 billion

Steel Dynamics priced $1 billion of fixed-rate senior notes (Baa3/BBB-/BBB) in two tranches on Monday tighter than guidance, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $400 million tranche of 2.8% five-year notes priced at 99.925 to yield 2.816%, or a spread of 115 bps over Treasuries.

Price guidance was in the Treasuries plus 125 bps area, plus or minus 5 bps.

The company sold $600 million of 3.45% notes due April 15, 2030 at 99.736 to yield 3.481%. The notes priced with a Treasuries plus 165 bps spread. The notes were guided to print in the 175 bps spread area, plus or minus 5 bps.

J.P. Morgan Securities LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were the active bookrunners. Passives were PNC Capital Markets LLC and Wells Fargo Securities, LLC.

Steel Dynamics is a Fort Wayne, Ind.-based steel producer and metals recycler.

Quest Diagnostics in primary

Quest Diagnostics sold of $800 million of 2.95% senior notes due June 30, 2030 (Baa2/BBB+/BBB) on Monday on the tight side of guidance at a spread of 115 bps over Treasuries, according to a market source and an FWP filing.

The notes priced at 99.738 to yield 2.979%.

J.P. Morgan, Morgan Stanley, Wells Fargo, Goldman Sachs and Mizuho Securities USA Inc. were the bookrunners.

The diagnostic testing company is based in Madison, N.J.

BP Capital sells notes

BP Capital Markets America priced $500 million of 3.067% guaranteed notes due March 30, 2050 at par to yield a spread of 80 bps over Treasuries on Monday, according to an FWP filing.

Citigroup Global Markets Inc. was the bookrunner.

The notes are guaranteed by parent company BP plc.

BP Capital Markets America is a Chicago-based aviation and marine fuels provider and subsidiary of the London-based oil and gas company.

Welltower raises $500 million

Welltower sold $500 million of 2.7% green senior notes due Feb. 15, 2027 (Baa1/BBB+/BBB+) on Monday at a spread of 95 bps over Treasuries, according to a market source and an FWP filing.

Initial talk was in the Treasuries plus 120 bps spread area.

The notes priced at 99.893 to yield 2.716%.

Wells Fargo, Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Barclays, BofA Securities, Citigroup, Goldman Sachs, J.P. Morgan, KeyBanc Capital Markets Inc., Morgan Stanley, MUFG and UBS Securities LLC were the bookrunners.

In addition, Welltower priced a C$300 million private placement of senior notes through its subsidiary, HCN Canadian Holdings-1 LP. The notes will be guaranteed by Welltower.

Welltower is a senior housing and health care real estate investment trust based in Toledo, Ohio.

Apollo Management plans deal

Apollo Management Holdings LP plans to price a dollar-denominated Rule 144A and Regulation S offering of guaranteed fixed-rate resettable subordinated notes due (/BBB+/BBB+), according to a news release on Monday.

The notes are guaranteed by indirect subsidiaries Apollo Principal Holdings I LP, Apollo Principal Holdings II LP, Apollo Principal Holdings III LP, Apollo Principal Holdings IV LP, Apollo Principal Holdings V LP, Apollo Principal Holdings VI LP, Apollo Principal Holdings VII LP, Apollo Principal Holdings VIII LP, Apollo Principal Holdings IX LP, Apollo Principal Holdings X LP, Apollo Principal Holdings XI LLC, Apollo Principal Holdings XII LP and AMH Holdings (Cayman) LP.

Apollo Management is an indirect subsidiary of New York City-based Apollo Global Management, Inc.

Charter mostly steady

Charter Communications’ 4.8% senior secured notes due March 1, 2050 (Ba1/BBB-/BBB-) traded on Monday in the 232 bps offered area, according to a market source.

The notes were quoted Friday at 236 bps bid, 231 bps offered.

Charter reopened the notes on Dec. 2 in a $1.3 billion add-on at 101.964 to yield 4.677%, or a spread of Treasuries plus 240 bps.

The issuers are subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

The broadband communications company is based in Stamford, Conn.

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