Ford Motor Credit, UPS, Husky Energy, Entergy Arkansas, Municipality Finance, FHLB tap market

By Cristal Cody

Tupelo, Miss., March 13 – Investment-grade supply remained active on Wednesday with new issues in the corporate and sovereign, supranational and agency markets.

Ford Motor Credit Co. LLC sold $1.5 billion of five-year notes, dropping a tranche of floating-rate notes from the final offering.

United Parcel Service, Inc. priced a $1.5 billion two-part offering of senior notes during the session.

Husky Energy Inc. sold $750 million of 10-year notes in the company's first dollar-denominated bond deal since 2014.

Entergy Arkansas, LLC sold $350 million of 30-year first mortgage bonds on Wednesday in the third energy deal priced this week.

In SSA supply, Municipality Finance plc sold $1 billion of long four-year notes.

Also on Wednesday, the Federal Home Loan Bank System sold $3 billion of two-year floating-rate notes linked to the Secured Overnight Financing Rate.

About $24 billion of investment-grade bonds have priced week to date, in line with forecasts of about $25 billion of supply expected for the week.

The Markit CDX North American Investment Grade 31 index firmed about 1 basis point to end the day at a spread of 58 bps.

The index will roll to a new series 32 index on March 20.

In the secondary market, new issues were mixed but mostly trading better, a source said.

SunTrust Banks, Inc.’s $1.25 billion of 3.2% senior notes due April 1, 2024 (Baa1/BBB+/A-) tightened about 4 bps from where the notes priced on Tuesday at a spread of 80 bps over Treasuries, a market source said.

New electric utility bonds priced this week are trading about 2 bps to 3 bps better than issuance, according to a market source.

Southern California Edison Co.’s $1.1 billion two-tranche offering of first and refunding mortgage bonds (A3/A-/BBB+) priced Tuesday improved about 2 bps across both tranches in the secondary market.

The company sold $500 million of 4.2% bonds due March 1, 2029 at a spread of 165 bps over Treasuries.

A $600 million tranche of 4.875% bonds due March 1, 2049 priced at a spread of Treasuries plus 190 bps.

Ford prices $1.5 billion

Ford Motor Credit sold $1.5 billion of 5.584% five-year notes at par to yield a spread of Treasuries plus 317 basis points on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced on the tight side of guidance in the Treasuries plus 320 bps area.

A tranche of floating-rate notes was dropped from the final sale.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, SG Americas Securities, LLC, SMBC Nikko Securities Americas, Inc., Credit Suisse Securities (USA) LLC, Mizuho Securities and Morgan Stanley & Co. LLC were the bookrunners.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

UPS raises $1.5 billion

United Parcel Service priced a $1.5 billion two-part offering of senior notes (A1/A+/) on Wednesday, according to an FWP filed with the SEC.

The company sold $750 million of 3.4% 10-year notes at 99.882 to yield 3.414%, or a spread of 80 bps over Treasuries.

UPS priced $750 million of 30-year notes at 99.933 to yield 4.254%. The bonds priced with a Treasuries plus 125 bps spread.

BNP Paribas Securities Corp., Goldman Sachs & Co. LLC, BofA Merrill Lynch, Morgan Stanley, SG Americas Securities, LLC, Barclays, Citigroup Global Markets, J.P. Morgan Securities, UBS Securities LLC and Wells Fargo Securities, LLC were the bookrunners.

The package delivery and supply chain management company is based in Atlanta.

Husky Energy taps dollar market

Husky Energy priced $750 million of 4.4% 10-year notes (Baa2/BBB/) in an offering on Wednesday at a spread of Treasuries plus 180 bps, according to an FWP filing with the SEC.

The notes priced at 99.939 to yield 4.407%.

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

The energy company is based in Calgary, Alta.

Entergy Arkansas in primary

Entergy Arkansas sold $350 million of 4.2% 30-year first mortgage bonds (A2/A/) on Wednesday at a spread of 123 bps over Treasuries, according to an FWP filing with the SEC.

The bonds priced at 99.407 to yield 4.235%.

Barclays, J.P. Morgan Securities, Stephens Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Entergy Arkansas is a New Orleans-based energy provider.

Municipality Finance sells notes

Municipality Finance (Aa1/AA+/) priced $1 billion of 2.5% notes due Nov. 15, 2023 on Wednesday at mid-swaps plus 14 bps, or a spread of Treasuries plus 20.2 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 16 bps area.

BofA Merrill Lynch, BMO Capital Markets Corp., Nomura Securities International, Inc. and Scotia Capital (USA) Inc. were the lead managers for the Rule 144A- and Regulation S-eligible offering.

Municipality Finance is a Helsinki, Finland-based credit institution that provides funding for the public sector in Finland.

FHLBanks prices $3 billion

In other issuance, the Federal Home Loan Bank System sold $3 billion of floating-rate notes due March 12, 2021 at SOFR plus 11.5 bps on Wednesday, according to a news release.

Barclays, J.P. Morgan Securities and Wells Fargo Securities were the lead managers.

The government-sponsored banks for financial institutions are based in Washington, D.C.

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