Issuers storm high-grade bond market following holiday; Citigroup firms; Goldman mixed

By Aleesia Forni and Cristal Cody

New York, Nov. 30 – Solvay Finance America LLC, Thermo Fisher Scientific Inc. and Whole Foods Market Inc. were among the flood of names entering Monday’s investment-grade primary market.

Issuers piled into the market during November’s final trading day, pricing more than $9.3 billion of paper ahead of Friday’s all-important non-farm payrolls report.

Whole Foods doubled the size of its new 10-year offering, ultimately pricing a $1 billion issue of senior notes.

Thermo Fisher was also in the market with an upsized $800 million deal on Monday.

Also of note, Solvay priced both tranches of its $1.6 billion offering 37.5 basis points tight of the mid-point of initial price thoughts. The company entered the primary to help finance the acquisition of Cytec Industries Inc.

“Great start to the week,” one market source noted.

Sources continue to expect a rush of issuance leading up to the start of the Federal Reserve’s policy meeting on Dec. 15, after which, primary activity should be mostly quiet heading into the late-year holidays.

Around $20 billion is predicted to price this week.

High-grade Canadian bank and financial bond issuance is expected in December after the banks start to exit earnings blackout periods this week, a syndicate source said.

“They will probably want to shop before the calendar year-end,” the source said.

Bank and financial paper was mixed in the secondary market on Monday.

Citigroup Inc.’s 4.4% subordinated notes due 2027 firmed 2 bps.

Goldman Sachs Group Inc.’s bonds traded flat to 3 bps tighter.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 were flat.

Wells Fargo & Co.’s existing 2.15% senior notes due 2020 headed out unchanged.

The Markit CDX North American Investment Grade 25 index ended the day modestly tighter at a spread of 84 bps.

Wells Fargo oversubscribed

In the largest trade to price on Monday, Wells Fargo attracted around $6 billion of orders for its new $2.5 billion issue of five-year senior holding company notes, a market source said.

The notes (A2/A+/AA-) priced in fixed- and floating-rate tranches.

A $2.1 billion 2.55% tranche of notes due 2020 sold at 99.893 to yield 2.573%, or Treasuries plus 93 bps.

The notes sold at the tight end of talk set in the 95 bps area over Treasuries following initial guidance set in the 105 bps to 110 bps range.

There was $400 million of floating-rate notes due 2020 sold at par to yield Libor plus 101 bps.

The notes were guided at the Libor plus 103 bps area. Initial talk was set at the Libor equivalent to the fixed-rate tranche.

Wells Fargo Securities LLC was the bookrunner.

The San Francisco-based bank plans to use proceeds for general corporate purposes.

Solvay acquisition financing

Solvay Finance America priced $1.6 billion of senior notes in two tranches at the tight end of guidance on Monday to help finance its acquisition of Cytec Industries Inc., a market source said.

The sale (Baa2/BBB-/BBB+) included $800 million of 3.4% five-year notes priced at Treasuries plus 175 bps. The issue sold at 99.986 to yield 3.403%.

Price guidance was set in the Treasuries plus 180 bps area, tightened from the Treasuries plus 212.5 bps area.

Also, $800 million of 4.45% 10-year bonds sold at 99.88 to yield 4.465%, or 225 bps over Treasuries.

The notes sold at the tight end of guidance set in the Treasuries plus 230 bps area after having firmed from talk in the Treasuries plus 262.5 bps area.

Solvay is a Brussels-based chemical manufacturer.

Whole Foods upsizes

Whole Foods Market priced an upsized $1 billion of 5.2% senior notes (Baa3/BBB-) due Dec. 3, 2025 on Monday at Treasuries plus 300 bps, an informed source said.

Pricing was at 99.861 to yield 5.218%.

Bookrunners were J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The deal was upsized from $500 million.

Proceeds will be used for general corporate purposes.

The natural and organic foods supermarket is based in Austin, Texas.

Pioneer Natural two-parter

Pioneer Natural Resources sold a $1 billion two-part offering of senior notes (Baa3/BBB-/BBB-) in five- and 10-year tranches on Monday, according to a market source.

There was $500 million of 3.45% five-year notes sold at Treasuries plus 185 bps.

A $500 million tranche of 4.45% 10-year bonds sold with a spread of Treasuries plus 225 bps.

Both tranches came at the tight end of talk.

Bookrunners are Goldman Sachs & Co., Morgan Stanley, Barclays, Deutsche Bank Securities Inc. and Wells Fargo.

The Irving, Texas-based oil and gas exploration and production company plans to use the proceeds for general corporate purposes, including the repayment or repurchase of its 5.875% notes due 2016 and 6.65% notes due 2017.

Roper prices tight

Roper Technologies Inc. was in the market on Monday with a $900 million offering of senior notes (Baa2/BBB) in tranches due 2020 and 2025, according to an informed source.

A $600 million 3% five-year tranche sold at Treasuries plus 135 bps.

Pricing was at the tightest side of the Treasuries plus 140 bps area guidance. Initially, talk was in the 145 bps area over Treasuries.

Also, $300 million of 3.85% 10-year bonds sold at Treasuries plus 165 bps.

Guidance was in the area of 170 bps over Treasuries. Initial talk was set in the area of Treasuries plus 185 bps.

BofA Merrill Lynch, JPMorgan, Wells Fargo and MUFG are the bookrunners.

Proceeds will be used to repay a senior unsecured revolving credit facility.

Roper Technologies is a Sarasota, Fla.-based diversified technology company.

Thermo Fisher upsizes

Thermo Fisher Scientific sold an upsized $800 million offering of senior notes (Baa3/BBB/BBB) in three- and 10-year tranches on Monday, according to a market source and filings with the Securities and Exchange Commission.

A $450 million 2.15% tranche of three-year notes sold at 99.997 to yield 2.151%, or 92 bps over Treasuries.

Guidance was set in the area of 95 bps over Treasuries, tightened from talk in the 115 bps over Treasuries area.

And a $350 million 3.65% tranche of 10-year bonds priced with a spread of Treasuries plus 145 bps.

The notes were guided in the area of Treasuries plus 150 bps and initially talked in the Treasuries plus 165 bps area.

The issue sold at a price of 99.858 to yield 3.667%.

The deal was upsized from $750 million.

Goldman Sachs, JPMorgan and Mizuho Securities are the bookrunners.

Proceeds will be used to redeem $900 million of the company’s 3.2% notes due March 1, 2016.

The notes will feature a change-of-control put at 101%.

Thermo Fisher is a Waltham, Mass.-based science technology company.

Citizens Financial prices

Citizens Financial Group Inc. priced a $750 million offering of 4.3% subordinated notes (BBB/BBB) due Dec. 3, 2025 on Monday at Treasuries plus 210 bps, according to a market source and an FWP filing with the SEC.

Pricing came at the tight side of the Treasuries plus 215 bps area guidance, following talk set in the Treasuries plus 225 bps to 230 bps range.

The notes priced at 99.895 to yield 4.313%.

Credit Suisse Securities (USA) LLC, RBS Securities Inc., Morgan Stanley and Citigroup Global Markets Inc. are the bookrunners.

The bank plans to use the proceeds to repurchase $750 million of subordinated notes and for general corporate purposes.

Citizens Bank new issue

And Citizens Bank NA priced $750 million of 2.3% senior bank notes (Baa1/A-/BBB+) on Monday at Treasuries plus 112.5 bps, a market source said. The notes priced at 99.87 to yield 2.345%.

Pricing came at the tight side of the Treasuries plus 115 bps area guidance, which was inside initial talk set in the range of Treasuries plus 125 bps to 130 bps.

Plans for a three-year floater were dropped prior to the deal’s launch.

Bookrunners were Credit Suisse and Morgan Stanley.

The bank is based in Providence, R.I.

Funds see outflows

Corporate investment-grade bond funds saw outflows of $1.45 billion for the week ended Nov. 25, according to Lipper U.S. Funds Flows.

The number is down from last week’s $94.5 million of inflows and brings the year-to-date total to roughly $13.9 billion of inflows.

Citigroup firms

Citigroup’s 4.4% subordinated notes due 2027 firmed 2 bps to 223 bps bid, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa3/ BBB+/A-) in an Oct. 23 add-on at 233 bps over Treasuries. The $2 billion tranche originally priced on Sept. 23 at Treasuries plus 235 bps.

The financial services company is based in New York.

Goldman mixed

Goldman’s 4.25% subordinated notes due 2025 were flat in late afternoon secondary trading at 199 bps bid on Monday, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The company’s 4.75% bonds due 2045 (A3/A-/A) firmed 3 bps over the session to 171 bps bid.

The bonds priced in a $1.75 billion tranche in the Oct. 16 sale at 192 bps over Treasuries.

The financial services company is based in New York City.

JPMorgan stable

JPMorgan Chase’s 4.25% subordinated bonds due 2027 were quoted flat at 199 bps bid in the secondary market, a source said.

JPMorgan Chase sold $2 billion of the bonds (Baa1/A-/A) on Sept. 23 at a spread of Treasuries plus 215 bps.

The financial services company is based in New York City.

Wells Fargo unchanged

Wells Fargo’s existing 2.15% notes due 2020 were unchanged on the day at 56 bps bid, a market source said.

Wells Fargo sold $2 billion of the notes (A2/A+/AA-) on Jan. 26, 2015 at Treasuries plus 85 bps.

The bank is based in San Francisco.

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