American Honda Finance, Commonwealth Edison price; KfW, NWB offer notes; AT&T improves

By Cristal Cody

Tupelo, Miss., Feb. 12 – Deal action stayed light on Monday with two reported issuers in the high-grade primary market.

American Honda Finance Corp. sold $1.6 billion of medium-term notes in three tranches.

Commonwealth Edison Co. priced $800 million of 30-year first mortgage bonds.

Supply was expected to be light over the session as investors gauge market stability following last week’s stock correction, a source said. Stocks remained modestly better over the day.

About $15 billion to $20 billion of bond supply is expected for the week, according to market sources.

Coming up on Tuesday, KfW is offering $1 billion of notes due Nov. 5, 2019.

Also, Nederlandse Waterschapsbank NV (Aaa/AAA/) plans to price $500 million of senior floating-rate notes due Feb. 24, 2020 on Tuesday, a source said. The notes were initially talked to price in the Libor plus 4 basis points area.

In addition, the Bank of New Zealand (A1/AA-/AA-) plans to hold a week-long deal roadshow that started on Monday, according to a market source.

Investment-grade credit spreads and bonds were mostly improved on Monday, according to market sources.

The Markit CDX North American Investment Grade 29 index tightened about 3 bps to a spread of 57 bps.

AT&T Inc.’s 3.9% notes due Aug. 14, 2027 (Baa1/BBB+/A-) tightened 5 bps to 112 bps bid during the session, a source said.

The Dallas-based telecommunications company sold $5 billion of the notes on July 27, 2017 at a spread of 160 bps over Treasuries.

The company is headed to court in March against the Justice Department, which filed suit to block AT&T’s $85.4 billion cash and stock acquisition of Time Warner Inc.

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) were flat at the 130 bps bid area on Monday.

The New York-based media and entertainment company sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

American Honda sells notes

American Honda Finance priced $1.6 billion of series A medium-term notes (A2/A+/) in three tranches in its offering on Monday, according to a market source.

The company sold $350 million of three-year floating-rate notes at Libor plus 21 bps.

American Honda priced $750 million of 2.65% three-year fixed-rate notes at a spread of Treasuries plus 40 bps.

The company also sold $500 million of 3.5% 10-year notes with a Treasuries plus 68 bps spread.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC and SMBC Nikko Securities America Inc. were the lead managers.

American Honda Finance is a Torrance, Calif.-based financing arm of American Honda Motor Co.

Commonwealth Edison prices

Also on Monday, Commonwealth Edison sold $800 million of 4% 30-year first mortgage bonds (A2/A-/A) at 99.981 to yield 4.001%, according to an FWP filing with the Securities and Exchange Commission.

The series 124 first mortgage bonds due March 1, 2048 priced with a spread of 85 bps over Treasuries.

Barclays, BofA Merrill Lynch, Scotia Capital (USA) Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and TD Securities (USA) LLC were the bookrunners.

Proceeds will be used to refinance the $700 million of 5.8% series 108 first mortgage bonds due March 15, 2018, to repay some commercial paper obligations and for general corporate purposes.

Commonwealth Edison is a unit of Chicago-based energy provider Exelon Corp.

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