Sumitomo Mitsui, Commonwealth Bank of Australia, Bank Nederlandse price; credit spreads ease

By Cristal Cody

Tupelo, Miss., July 6 – High-grade issuers priced more than $7 billion of bonds on Thursday in the first primary action of the holiday week.

Sumitomo Mitsui Financial Group Inc. brought $4.25 billion of senior notes in three tranches, adding a second fixed-rate tranche to its deal.

Commonwealth Bank of Australia sold $1.5 billion of 30-year notes.

Bank Nederlandse Gemeenten NV priced $1.5 billion of three-year floating-rate notes in line with price guidance.

U.S. high-grade issuers stayed out of the primary market on Monday with the early market close and on Wednesday following the Independence Day holiday.

The Markit CDX North American Investment Grade index eased about 1 basis point on Thursday to a spread of 62 bps.

In the secondary market, Walgreens Boots Alliance Inc.’s 3.45% notes due June 1, 2026 softened about 3 bps. Walgreens announced in the previous week it plans to purchase more than 2,100 Rite Aid Corp. stores instead of completing an acquisition of the entire company.

Kroger Co.’s senior notes (Baa1/BBB/BBB) traded about 1 bp to 4 bps tighter on the day.

Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 have been stable since tightening about 85 bps on June 16 after Amazon.com, Inc. announced it will purchase the natural and organic foods grocer for $13.7 billion in cash.

Sumitomo sells $4.25 billion

Sumitomo Mitsui Financial Group priced $4.25 billion of dollar-denominated senior notes (A1/A-/A) in three tranches on Thursday, according to a market source.

The company sold $500 million of five-year floating-rate notes at Libor plus 78 bps.

It priced $2 billion of 2.784% five-year fixed-rate notes at a spread of Treasuries plus 85 bps.

The company also brought $1.75 billion of 3.364% 10-year notes to the primary market with a spread of 100 bps over Treasuries.

Goldman Sachs & Co., SMBC Nikko Securities America, Inc., BofA Merrill Lynch and Citigroup Global Markets Inc. were the bookrunners.

Proceeds will be used to extend senior unsecured loans to the bank, which will use the proceeds of the loans for general corporate purposes, according to a 424B5 filing with the Securities and Exchange Commission.

The banking and financial company is based in Tokyo.

Commonwealth Bank prices

Commonwealth Bank of Australia (Aa3/AA-/AA-) priced $1.5 billion of 3.9% notes due in 30 years on Thursday at a spread of Treasuries plus 103 bps, according to a market source.

The notes were talked to price in the Treasuries plus 105 bps area, plus or minus 2 bps.

Commonwealth Bank of Australia, Goldman Sachs, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

The bank and financial services company is based in Sydney.

Bank Nederlandse sells floaters

Bank Nederlandse Gemeenten (Aaa/AAA/AA+) priced $1.5 billion of three-year floating-rate notes on top of price talk at Libor plus 10 bps on Thursday, according to a market source.

The notes due July 14, 2020 were talked to price in the Libor plus 10 bps area.

Barclays, Goldman Sachs and HSBC Securities (USA) Inc. were the lead managers of the Rule 144A and Regulation S offering.

The banking services company is based in The Hague, Netherlands.

Walgreens eases

Walgreens’ 3.45% notes due June 1, 2026 softened about 3 bps on Thursday to 121 bps bid in secondary trading, according to a market source.

The retailer sold $1.9 billion of the notes on May 26, 2016 at a spread of 165 bps over Treasuries.

Walgreens Boots Alliance is a subsidiary of Deerfield, Ill.-based drugstore operator Walgreens Co.

Kroger firms

Kroger’s 2.65% notes due Oct. 15, 2026 firmed about 1 bp to 134 bps bid, a source said.

Kroger sold $750 million of the notes on Sept. 26 at a spread of 110 bps over Treasuries.

The company’s 4.45% notes due Feb. 1, 2047 tightened about 4 bps in the secondary market to 181 bps bid.

The Cincinnati-based grocery retailer sold $1 billion of the bonds on Jan. 17, 2017 at a spread of 150 bps over Treasuries.

Whole Foods flat

Whole Foods Market’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) were steady at 89 bps bid, according to a market source.

The company’s bonds tightened about 85 bps on June 16 to 92 bps bid following Amazon.com’s acquisition announcement.

Austin, Texas-based Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at a Treasuries plus 300 bps spread.

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