Realty Income, AmerisourceBergen, AXIS, UDR, Yamana tap high-grade primary, ‘good tone’

By Cristal Cody

Tupelo, Miss., Nov. 29 – High-grade supply remained active on Wednesday with several issuers in the primary market.

Realty Income Corp. priced $1.3 billion of notes in three tranches.

AmerisourceBergen Corp. sold $1.25 billion of senior notes in two parts.

James Hardie International Finance DAC priced $800 million of split-rated senior notes in two tranches.

AXIS Specialty Finance plc priced $350 million of 10-year senior notes.

UDR, Inc. priced a $300 million offering of long 10-year medium-term notes.

Canadian issuers also were in the U.S. and Canada primary markets on Wednesday with issuance expected to continue into mid-December.

Canadian gold producer Yamana Gold Inc. placed $300 million of split-rated 10-year senior notes.

“People are going to take advantage of the good tone, low coupon before the Dec. 13 cut-off date,” a source said.

In other activity on Wednesday, Bank Nederlandse Gemeenten NV held a round of fixed income investor calls for an offering of three-year notes.

D.R. Horton, Inc. also was offering three-year senior notes following a round of fixed-income investor calls on Tuesday.

The Markit CDX North American Investment Grade 29 index eased about 1 basis point to a spread of 53 bps.

Realty Income sells notes

Realty Income priced $1.3 billion of notes (A3/BBB+/BBB+) in three tranches on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $550 million of new 3.65% 10-year notes at 99.778 to yield 3.676% and a Treasuries plus 130 bps spread.

Realty Income priced a $500 million reopening of its 3.25% notes due Oct. 15, 2022 at 101.773 to yield 2.837%, or a spread of 75 bps over Treasuries.

The company originally sold $450 million of the notes on Oct. 2, 2012 at 99.382 to yield 3.323% and a Treasuries plus 170 bps spread. The total outstanding is $950 million.

The company also priced a $250 million tap of its 4.65% notes due March 15, 2047 at 105.434 to yield 4.318%. The bonds priced with a spread of Treasuries plus 150 bps.

The company originally sold $250 million of the 4.65% notes on March 8, 2017 at 99.968 to yield 4.652%, or 150 bps over Treasuries spread. The total outstanding now is $500 million.

Citigroup Global Markets Inc., Barclays, BNY Mellon Capital Markets LLC, Goldman Sachs & Co., UBS Securities LLC, U.S. Bancorp Investments, Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Regions Securities LLC and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used to redeem $550 million of outstanding 6.75% notes due Aug. 15, 2019, repay borrowings outstanding under the company’s $2 billion revolving credit facility and for other general corporate purposes.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

AmerisourceBergen prices

AmerisourceBergen priced $1.25 billion of senior notes (Baa2/A-/A-) in two tranches on Wednesday, according to an FWP filed with the SEC.

The company sold $750 million of 3.45% 10-year notes at 99.755 to yield 3.479%, or a spread of 110 bps over Treasuries.

AmerisourceBergen priced $500 million of 4.3% 30-year notes at 99.514 to yield 4.329%. The bonds priced with a Treasuries plus 150 bps spread.

Citigroup Global Markets, J.P. Morgan Securities and BofA Merrill Lynch were the bookrunners.

Proceeds will be used to finance the company’s $815 million all-cash acquisition of H.D. Smith, LLC, to redeem all of its 4 7/8% senior notes due Nov. 15, 2019 and for general corporate purposes.

AmerisourceBergen is a Chesterbrook, Penn.-based pharmaceutical sourcing and distribution services company.

AXIS brings notes

AXIS Specialty Finance priced $350 million of 4% 10-year senior notes (Baa1/A-/) on Wednesday, according to a news release.

Credit Suisse Securities, Barclays Capital Inc., Citigroup Global Markets and HSBC Securities (USA) Inc. were the bookrunners.

Additional pricing details were not immediately available.

The notes are fully and unconditionally guaranteed by parent company AXIS Capital Holdings Ltd.

Proceeds will be used to repay or redeem the company’s 2.65% senior notes due April 1, 2019 and for general corporate purposes.

The company plans to list the notes on the Bermuda Stock Exchange.

AXIS is a Pembroke, Bermuda-based provider of specialty lines insurance and treaty reinsurance with shareholders’ equity.

UDR in primary

UDR priced a $300 million offering of 3.5% medium-term notes due Jan. 15, 2028 (Baa1/BBB+/) on Wednesday at 99.601 to yield 3.547%, according to an FWP filing with the SEC.

The bonds priced with a spread of 117 bps Treasuries.

J.P. Morgan Securities, BofA Merrill Lynch and U.S. Bancorp Investments were the bookrunners.

The notes are fully and unconditionally guaranteed by United Dominion Realty, LP.

Proceeds will be used to repay outstanding debt, including funding the redemption of $300 million of 4.25% senior notes due June 1, 2018 and for other general corporate purposes.

UDR is a real estate investment trust that owns and operates apartment communities.

Yamana Gold places notes

Yamana Gold sold $300 million of 4.625% split-rated 10-year senior notes, (Baa3/BB+/BBB-), according to a news release on Wednesday.

The notes will be unconditionally guaranteed by certain Yamana subsidiaries that also are guarantors under Yamana’s credit facility.

Proceeds will be used to repay outstanding debt as it comes due and, pending such use, to repay the outstanding amount on the company’s credit facility.

Yamana Gold is a Toronto-based gold producer.

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