Tennessee Valley Authority, EIB, Citigroup, MPLX price; Estee Lauder notes better

By Cristal Cody

Tupelo, Miss., Feb. 7 – Issuance held strong over Tuesday’s session in the investment-grade market with sources reporting more than $9 billion of bonds sold.

Tennessee Valley Authority priced $1 billion of 10-year global power bonds on Tuesday at 2.875% with a 2.884% yield, the second lowest for TVA financings of the same maturity, according to the release.

The authority last issued bonds with a 10-year maturity in 2014.

The offering drew demand from money managers, central banks, insurance companies and other investors in the United States and overseas, TVA said.

“Having the global market for TVA bonds is beneficial to us and our investor base,” TVA treasurer and chief risk officer Tammy Wilson said in the release. “The new bonds fit well into TVA's maturities profile and help us meet long-term corporate financing needs, while the low rate will reduce our financing costs.”

In other supply on Tuesday, the European Investment Bank sold $3 billion of three-year notes.

KfW tapped the primary market with a $1 billion offering of 19-month global notes.

Also, Dexia Credit Local SA priced $500 million of two-year floating-rate notes.

In corporate issuance, MPLX LP priced a $2.25 two-part offering of fixed-rate senior notes.

Symantec Corp. brought a $1.1 billion split-rated offering of eight-year senior notes.

In addition, Citigroup, Inc. priced a $750 million reopening of its 4.75% 30-year subordinated notes.

The Markit CDX North American Investment Grade index eased about 1 basis point to close at a spread of 66 bps.

Estee Lauder Cos. Inc.’s $1.5 billion of new senior notes (A2/A+/) improved in secondary trading on Tuesday.

TVA prices $1 billion

Tennessee Valley Authority priced $1 billion of 2.875% 10-year global power bonds to yield 2.884% and a spread of 48 bps over Treasuries on Tuesday, according to a market source and a company release.

The bonds due Feb. 1, 2027 (Aaa//AAA) priced on the tight side of guidance in the Treasuries plus 50 bps area, plus or minus 2 bps.

BofA Merrill Lynch, Barclays, Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

The bonds are not callable before maturity.

Proceeds from the offering will be used to refinance existing debt or for other power system purposes.

Tennessee Valley Authority is a Knoxville, Tenn.-based corporate agency of the United States of America that provides electricity and is responsible for managing the Tennessee River and its tributaries to provide flood control, navigation and land management.

EIB raises $3 billion

The European Investment Bank sold $3 billion of 1.75% three-year notes at a spread of 42.5 bps over Treasuries, according to a market source on Tuesday.

The notes are due May 15, 2020.

Goldman, Sachs & Co., Morgan Stanley and TD Securities (USA) LLC were the bookrunners.

The European Investment Bank is a lending institution based in Luxembourg.

KfW prices notes

KfW sold $1 billion of 1.25% global notes (Aaa/AAA/) due Sept. 13, 2018 at 99.859 and a spread of 17.45 bps over Treasuries on Tuesday, according to a market source and an FWP filing with the SEC.

Barclays, Citigroup Global Markets Inc. and Morgan Stanley were the managers.

The issue is guaranteed by the Federal Republic of Germany.

KfW is a government-backed bank based in Frankfurt.

MPLX sells $2.25 billion

MPLX priced a $2.25 two-part offering of fixed-rate senior notes (Baa3/BBB-/BBB-) on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The $1.25 billion tranche of 4.125% 10-year notes priced at 99.834 to yield 4.145% and a spread of Treasuries plus 175 bps.

MPLX sold $1 billion of 5.2% 30-year notes at 99.304 to yield 5.246%, or Treasuries plus 220 bps.

The notes priced on the tight side of guidance.

Barclays, Citigroup, MUFG, Wells Fargo Securities LLC, BofA Merrill Lynch, Mizuho Securities USA Inc., RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc., UBS Securities LLC and U.S. Bancorp Investments Inc. were the bookrunners for the 10-year notes.

On the 30-year tranche, the bookrunners were Barclays, Citigroup, MUFG, Wells Fargo Securities, BNP Paribas Securities Corp., BofA Merrill Lynch, Mizuho Securities, SunTrust Robinson Humphrey, TD Securities (USA) LLC and UBS Securities.

The company held fixed-income investor calls on Feb. 1 and Thursday for the offering.

Proceeds from the deal will be used for general partnership purposes.

MPLX is a Findlay, Ohio-based owner, operator and developer of crude oil pipeline and midstream assets in the United States.

Symantec prints $1.1 billion

Symantec priced $1.1 billion of 5% split-rated eight-year senior notes (Baa3/BB+/BB+) with a spread of 271 bps over Treasuries on Tuesday, according to a market source and a company release.

The notes due April 15, 2025 priced tighter than guidance in the 5.25% to 5.5% area.

The deal was upsized from an initial $1 billion offering.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the lead managers of the Rule 144A and Regulation S transaction.

The notes are non-callable for three years.

The transaction’s closing is contingent on Symantec closing its acquisition of Lifelock, Inc.

Symantec plans to use the proceeds, along with cash on hand, to finance the $2.3 billion cash purchase price of Lifelock, a Tempe, Ariz.-based identity theft protection services provider.

Symantec is a Mountain View, Calif.-based technology company.

Citigroup reopens

Citigroup priced a $750 million reopening of its 4.75% 30-year subordinated notes (Baa3/BBB/A-) on Tuesday at a spread of 173 bps over Treasuries, a market source said.

The notes due May 18, 2046 priced to the tight side of guidance in the Treasuries plus 175 bps area, plus or minus 2 bps.

Citigroup Global Markets was the bookrunner.

Citigroup originally sold $1 billion of the notes on May 11, 2016 at 98.927 to yield 4.818%, or Treasuries plus 225 bps. The total outstanding now is $1.75 billion.

Citigroup is a financial services company based in New York.

Dexia sells floaters

Dexia Credit Local priced $500 million of two-year floating-rate notes (Aa3/AA/) in line with guidance at Libor plus 50 bps on Tuesday, according to a market source.

Barclays and Deutsche Bank Securities Inc. were the bookrunners.

The regional bank, focusing on sustainable development, is based in Brussels, Belgium.

Estee Lauder improve

Estee Lauder’s 1.8% notes due Feb. 7, 2020 closed better at 100.08 on Tuesday in secondary trading, according to a market source.

The company placed $500 million of the three-year notes on Monday at 99.986 to yield 1.805% and a spread of 40 bps over Treasuries.

Estee Lauder’s 3.15% notes due March 15, 2027 headed out better at 100.14.

The company sold $500 million of the 10-year notes on Monday at 99.963 to yield 3.154% and a spread of a Treasuries plus 75 bps.

Estee Lauder’s 4.15% notes due March 15, 2047 climbed to 100.30 over the session.

Estee Lauder sold $500 million of the 30-year notes at 99.739 to yield 4.165%, or Treasuries plus 110 bps.

New York-based Estee Lauder is a manufacturer and marketer of skin care, makeup, fragrance and hair care products.

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