DowDuPont prices $12.7 billion; Kilroy, World Bank sell green notes; bank paper widens

By Cristal Cody

Tupelo, Miss., Nov. 14 – DowDuPont Inc. led pricing action in the high-grade market on Wednesday with a $12.7 billion eight-part offering of senior notes.

Kilroy Realty, LP also sold $400 million of 10-year guaranteed green senior notes.

In addition, the International Bank for Reconstruction and Development, or World Bank, priced $1.3 billion equivalent of dollar- and euro-denominated green notes.

The deals bring World Bank’s green bond program to $12.6 billion through 150 green bonds in 20 currencies and mark the 10-year anniversary of the bank’s first green bond that was issued in November 2008, according to a news release.

The bonds support the financing of programs that aid sustainable development goals.

“In November 2008, the World Bank launched the green bond market and catalyzed the market for sustainable investing – a market that has since grown exponentially with a diverse set of issuers and investors,” Arunma Oteh, World Bank vice president and treasurer, said in the release. “The first green bond was transformational in helping to shift investor focus to environmental, social and governance commitments of issuers, and to understanding the use and impact of their financing.”

World Bank said the deal was heavily oversubscribed with more than 60 orders totaling $1.4 billion and included first-time green bond investors.

Investors that supported the transactions included Achmea Holding NV, Actiam NV, Affirmative Investment Management Partners Ltd., Alecta, Amundi, Swedish National Pension Funds AP2 and AP3, AMF, APG on behalf of ABP and other pension fund clients, Barclays treasury, California State Teachers’ Retirement System, Praxis Impact Bond Fund, Folksam Group, Groupe Mutuelle d’assurance des professionnels de la sante and PGGM on behalf of its clients, according to the release.

“Along with the transaction announcement, IBRD explicitly encouraged dedicated green investors to participate in the transaction, which ultimately contributed to the superb quality of the final orderbook, dominated by global ESG portfolios,” Gerald Podobnik, global head of capital solutions and sustainable financing and head of FIG EMEA at co-lead manager Deutsche Bank AG, said in the release.

Looking ahead to Thursday, the Federal Home Loan Bank System is expected to price a new 10-year global note.

Market sources also are looking for a potential dollar-denominated offering from Takeda Pharmaceutical Co., Ltd., which is holding a European roadshow that ended on Wednesday for an estimated $14 billion deal.

High-grade issuers have priced more than $17 billion of bonds week to date.

On Tuesday, more than $4 billion of high-grade bonds were priced from issuers including Svenska Handelsbanken AB, Marriott International Inc. and Boston Properties LP, U.S. Bank NA and U.S. Bancorp.

The bond markets were closed on Monday for the Veterans Day holiday.

About $25 billion to $30 billion of supply on average is forecast for the short market week, according to syndicate sources.

The Markit CDX North American Investment Grade 31 index eased about 2 basis points on Wednesday to a spread of 71 bps.

In the secondary market, bank and financial paper softened about 2 bps to 15 bps during the session, according to a market source.

Royal Bank of Scotland Group plc’s $1.75 billion of 5.076% fixed-to-floating-rate senior notes due Jan. 27, 2030 priced in September widened about 9 bps to 219 bps bid.

The bank sold $1.75 billion of the notes (Baa2/BBB-/BBB+) on Sept. 24 at par to yield a Treasuries plus 200 bps spread.

Svenska Handelsbanken’s $1.4 billion of 3.9% notes due Nov. 20, 2023 (Aa2/AA-/AA) traded about 2 bps better than where the notes priced on Tuesday at a spread of 95 bps over Treasuries, a market source said.

DowDuPont sells eight tranches

DowDuPont priced $12.7 billion of senior notes (Baa1/A-/BBB+) in eight parts on Wednesday, according to a market source.

A $500 million two-year floating-rate tranche priced at Libor plus 71 bps.

The company sold $1.5 billion of 3.766% two-year fixed-rate notes at a spread of Treasuries plus 90 bps.

A $300 million offering of five-year floating-rate notes priced at Libor plus 111 bps, while $2.5 billion of 4.205% five-year fixed-rate notes came at a Treasuries plus 125 bps spread.

DowDuPont sold $1.85 billion of 4.493% seven-year notes at a spread of 145 bps over Treasuries.

A $2.25 billion tranche of 4.725% 10-year notes were sold at a spread of 160 bps over Treasuries.

The company priced $1.65 billion of 5.319% 20-year notes with a Treasuries plus 195 bps spread.

In the final tranche, $2.15 billion of 5.419% 30-year notes priced at a 205 bps over Treasuries spread.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC were the bookrunners.

Wilmington, Del.-based DowDuPont is expected to become a stand-alone company focused on specialty products following the spin-offs of its agriculture and materials science businesses in 2019.

Kilroy Realty prices

Kilroy Realty sold $400 million of 4.75% 10-year guaranteed green senior notes on Wednesday at 99.634 to yield 4.796%, according to an FWP filed with the Securities and Exchange Commission.

The notes (Baa2/BBB/) priced at a spread of 168 bps over Treasuries.

J.P. Morgan Securities, BofA Merrill Lynch, BBVA Securities Inc., Jefferies LLC and Wells Fargo Securities LLC were the bookrunners.

The issue is guaranteed by general partner Kilroy Realty Corp.

Kilroy Realty is a Los Angeles-based real estate investment trust with office and mixed-use submarkets along the West Coast.

World Bank sells notes

World Bank priced $1.3 billion equivalent of dollar- and euro-denominated green notes on Wednesday, according to a news release.

The bank (Aaa/AAA) sold $600 million of 3.125% seven-year dollar bonds at 99.446 to yield 3.214% and a spread of 14.9 bps over Treasuries.

In the euro offering, the bank priced €600 million of 0.625% bonds due Nov. 22, 2027 at 99.478 to yield 0.685% and a spread of 40.4 bps over the German Bund.

BofA Merrill Lynch, Credit Agricole Securities CIB, Deutsche Bank Securities Inc. and SEB Securities, Inc. were the lead managers.

World Bank is a global development financing cooperative based in Washington, D.C.

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