Royal Bank of Canada, Verizon, Smithfield tap primary; International Business Machines better

By Cristal Cody

Eureka Springs, Ark., Jan. 25 – Investment-grade issuers including Royal Bank of Canada, SunTrust Banks, Inc., Verizon Communications Inc. and Smithfield Foods, Inc. priced new bonds on Wednesday as equities rallied and the Dow Jones industrial average closed above 20,000 for the first time in its history.

RBC priced $1.75 billion of five-year fixed- and floating-rate notes.

SunTrust Banks brought a $1.3 billion two-part offering of notes.

Verizon Communications tapped the primary market with a $1,475,000,000 offering of notes.

Also, Smithfield Foods priced $1.4 billion of split-rated senior notes (Ba2/BBB-/BBB) in three tranches.

In other issuance, Bank Nederlandse Gemeenten NV priced $1.75 billion of five-year notes on Wednesday.

The European Bank for Reconstruction and Development sold $1 billion of four-year global notes.

The Markit CDX North American Investment Grade index tightened about 1 basis point to close the day at a spread of 64 bps.

In the secondary market, International Business Machines Corp.’s senior notes (Aa3/AA-/A+) priced on Tuesday traded better over the session.

RBC sells fixed, floaters

RBC priced $1.75 billion of five-year series G senior medium-term fixed- and floating-rate notes (Aa3/AA-/AA) on Wednesday, according to a market source and FWP filings with the Securities and Exchange Commission.

The bank sold $500 million of notes due Feb. 1, 2022 at par to yield Libor plus 73 bps.

RBC priced $1.25 billion of the 2.75% five-year fixed-rate notes at 99.977 to yield 2.755% and a spread of Treasuries plus 78 bps.

RBC Capital Markets, LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. were the bookrunners.

The financial services company is based in Toronto.

SunTrust sells $1.3 billion

SunTrust Banks priced $1.3 billion of notes (Baa1/BBB+/A-) in two tranches on Wednesday, according to an informed source.

The company sold $300 million of floating-rate notes due Jan. 31, 2020 at Libor plus 53 bps.

SunTrust priced $1 billion of 2.25% three-year notes at a spread of 75 bps over Treasuries.

SunTrust Robinson Humphrey Inc., Goldman Sachs, J.P. Morgan Securities LLC and UBS Securities LLC were the bookrunners.

The financial holding company for SunTrust Bank is based in Atlanta.

Verizon prices $1.47 billion

Verizon Communications (Baa1/BBB+/A-) priced $1,475,000,000 of 4.95% 30-year notes at par on Wednesday, according to an FWP filing with the SEC.

The notes are due Feb. 11, 2047.

BNP Paribas Securities Corp., Taipei Branch, and Deutsche Bank AG, Taipei Branch were the bookrunners.

Beginning in February 2020, the notes are redeemable, in whole but not in part, each February at par plus interest to the redemption date.

The notes will be listed on the Taipei Exchange.

Proceeds from the offering will be used for general corporate purposes.

Verizon is a New York City-based telecommunications company.

Smithfield sells bonds

Smithfield Foods priced $1.4 billion of split-rated senior notes (Ba2/BBB-/BBB) in three tranches in a private Rule 144A- and Regulation S-eligible offering on Wednesday, according to a market source and company release.

The company sold $400 million of 2.7% three-year notes with a spread of 120 bps over Treasuries.

Smithfield Foods priced $400 million of 3.35% five-year notes at a spread of Treasuries plus 140 bps.

The $600 million tranche of 4.25% 10-year notes priced with a Treasuries plus 175 bps spread.

The notes priced on the tight side of guidance.

Barclays, Goldman Sachs and Morgan Stanley & Co. LLC were the lead managers.

The notes initially will be guaranteed on a senior unsecured basis by each of the company’s subsidiaries that is expected to become a borrower or a guarantor under its new senior credit facilities and, in the future, by each of its subsidiaries that guarantees obligations under certain material debt facilities or certain material debt securities of the company or any guarantor.

Smithfield Foods intends to use the proceeds from the proposed notes offering, together with cash on hand and borrowings under its credit facilities, to refinance existing senior notes.

The meat processing company is based in Smithfield, Va.

Bank Nederlandse prices

Bank Nederlandse Gemeenten (Aaa/AAA/AA+) priced $1.75 billion of 2.375% five-year notes on Wednesday at a spread of 45.7 bps over Treasuries in a Rule 144A and Regulation S offering, according to a market source.

Barclays, J.P. Morgan Securities, RBC Capital and TD Securities (USA) LLC were the lead managers.

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

EBRD raises $1 billion

The European Bank for Reconstruction and Development sold $1 billion of 2% four-year global notes with a spread of 51.15 bps over Treasuries on Wednesday, according to a market source.

The notes (Aaa/AAA/AAA) are due Feb. 1, 2021.

BofA Merrill Lynch, Barclays, BMO Capital Markets Corp. and Morgan Stanley were the lead managers.

The financial institution is based in London.

IBM improves

International Business Machines’ 2.5% notes due 2022 rose over the day to head out better at 99.98 after trading early in the day 99.87, according to a market source.

The company sold $1 billion of the five-year notes on Tuesday at 99.869 to yield 2.528% and a spread of 60 bps over Treasuries.

IBM’s 3.3% notes due 2027 climbed on Wednesday to par after trading at 99.64 at the start of Wednesday’s session.

The company sold $500 million of the 10-year notes on Tuesday at 99.469 to yield 3.363%, or 90 bps over Treasuries.

The information technology and computer company is based in Armonk, N.Y.

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