High-grade issuers flood market; T-Mobile, BP, Ross price; corporate outflows decline

By Cristal Cody

Tupelo, Miss., April 2 – High-grade issuers priced more than $33 billion of bonds over Thursday’s session, led by T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc.’s $19 billion five-part offering.

Book demand for the notes reached more than $74 billion by midday.

T-Mobile’s deal had been on the radar since last year and moved forward after the company announced on Wednesday that it closed its acquisition of Sprint Corp.

In other pricing action on Thursday, BP Capital Markets America Inc. sold $3.25 billion of senior notes in four tranches.

Ross Stores, Inc. priced $2 billion of senior notes in four tranches.

VMware, Inc. came by with a $2 billion three-part offering of senior notes.

Hyundai Capital America tapped the primary market with a $1.8 billion three-part offering of notes.

In the financial space, Lloyds Banking Group plc priced $1.5 billion of five-year senior callable fixed-to-fixed-rate notes.

Also, Paccar Financial Corp. priced an upsized $400 million of three-year medium-term notes.

TransCanada Pipelines Ltd. priced $1.25 billion of 10-year senior notes in the dollar market on Thursday a day after pricing C$2 billion of seven-year medium-term debentures.

Canadian dollar-denominated issuance is expected to be in line with March volume of about C$11 billion, “but dominated by large issuance from best-in-class issuers,” a market source said. “Canada hasn’t seen the same supply as the U.S. and we aren’t likely to.”

Dollar-denominated high-grade supply has been heavy this week, after record issuance in March, with more than $100 billion of bonds already priced week to date.

In other issuance on Thursday, Evergy Kansas Central, Inc. priced $500 million of 30-year first mortgage bonds.

Ryder System, Inc. brought $400 million of five-year medium-term notes to the market.

Also Thursday, CPPIB Capital Inc. sold $1.25 billion of two-year notes.

Broader market

Outflows declined significantly over the past week ended Wednesday, Refinitiv Lipper US Fund Flows said Thursday.

Investment-grade corporate funds posted $8.47 billion of outflows over the period, down from $38.02 billion of outflows in the previous week and $35.59 billion of outflows in the prior week.

Market tone was positive early in the session on a boost in crude oil prices, and stocks remained positive while Treasuries were mixed on the day. The Dow Jones industrial average rose 2.24%, while the S&P 500 index finished up 2.28%.

The iShares iBoxx Investment Grade Corporate Bond ETF gained 0.26% after rising 0.82% early in the session and closing down 1.45% in the prior session.

High-grade credit spreads improved about 1 basis point on the day after widening out more than 10 bps on Wednesday.

The Markit CDX North American Investment Grade 33 index closed at a spread of 123.6 bps.

T-Mobile prices $19 billion

T-Mobile USA priced $19 billion of senior secured notes (Baa3/BBB-/BBB-) in five tranches, according to a market source.

A $3 billion tranche of 3.5% five-year notes priced at a spread of 312.5 bps over Treasuries.

The five-year notes were talked to price at the Treasuries plus 350 bps area.

The company sold $4 billion of 3.75% seven-year notes at a 325 bps over Treasuries spread.

The seven-year notes were talked to print with a spread in the 362.5 bps area.

A $7 billion tranche of 3.875% 10-year notes priced at a Treasuries plus 337.5 bps spread.

T-Mobile placed $2 billion of 4.375% 20-year notes at a spread of 325 bps over Treasuries.

In the final tranche, $3 billion of 4.5% 30-year notes priced with a 325 bps over Treasuries spread.

The 10-, 20- and 30-year notes were all talked to price at the Treasuries plus 375 bps area.

Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC were bookrunners of the Rule 144A and Regulation S offering.

The mobile communications company is a subsidiary of Bonn, Germany-based telecommunications company Deutsche Telekom AG.

BP Capital prices $3.25 billion

BP Capital Markets America (A1/A-) priced $3.25 billion of senior notes in four tranches on Thursday, according to a market source.

The company sold $750 million of 2.937% three-year notes at a spread of Treasuries plus 265 bps, tighter than guidance in the Treasuries plus 300 bps area.

BP priced $750 million of 3.194% five-year notes at a Treasuries plus 280 bps spread. Initial talk was in the Treasuries plus 310 bps area.

A $500 million tranche of 3.543% seven-year notes priced with a 300 bps over Treasuries spread.

Also, $1.25 billion of 3.633% 10-year notes priced at a Treasuries plus 300 bps spread.

The seven- and 10-year tranches were talked at the Treasuries plus 325 bps area.

BofA Securities, Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities, LLC and Morgan Stanley & Co. LLC were the bookrunners.

BP Capital Markets America is a Chicago-based aviation and marine fuels provider and subsidiary of London-based oil and gas company BP plc.

Ross Stores prices $2 billion

Ross Stores priced $2 billion of senior notes (A2/BBB+) in four tranches on Thursday, according to a market source.

A $700 million tranche of 4.6% five-year notes priced at a spread of 425 bps over Treasuries.

The company sold $400 million of 4.7% seven-year notes with a 425 bps spread.

Ross brought $400 million of 4.8% 10-year notes at a spread of Treasuries plus 425 bps.

In the final tranche, the company sold $500 million of 5.45% 30-year notes at a 425 bps over Treasuries spread.

The notes were talked at the 425 bps spread area.

BofA Securities and J.P. Morgan were the joint bookrunners.

Dublin, Calif.-based Ross owns a chain of discount department stores.

VMware prices $2 billion

VMware priced a $2 billion three-part offering of fixed-rate senior notes (Baa2/BBB-) on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $750 million five-year tranche of 4.5% notes priced at 99.949 to yield 4.51% and a spread of Treasuries plus 412.5 bps.

The company sold $500 million of 4.65% seven-year notes at 99.951 to yield 4.657%, or a 412.5 bps spread.

Finally, $750 million of 4.7% 10-year notes priced at 99.643 to yield 4.744% and a Treasuries plus 412.5 bps spread.

All three tranches were talked to price at the Treasuries plus 450 bps area.

BofA Securities, Citigroup, J.P. Morgan, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank, Goldman Sachs, Morgan Stanley, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC were the bookrunners.

VMware is a Palo Alto, Calif., virtualization solutions provider.

Hyundai prices $1.8 billion

Hyundai Capital America (Baa1/BBB+) priced $1.8 billion of notes in three tranches on top of talk on Thursday, according to a market source.

The company sold $550 million of 5.75% three-year notes at a spread of 550 bps over Treasuries.

A $600 million tranche of 5.875% five-year notes priced at a Treasuries plus 550 bps spread.

Hyundai Capital sold $650 million of 6.375% 10-year notes at a Treasuries plus 575 bps spread.

Initial price talk on the three- and five-year tranches was at the 550 bps spread area, and the 10-year issue was talked to price at the Treasuries plus 575 bps area.

Credit Agricole Securities (USA) Inc., Citigroup, Mizuho Securities USA Inc. and RBC Capital Markets were the bookrunners.

Hyundai Capital America is an Irvine, Calif.-based auto financing arm of the Hyundai Motor Co.

Lloyds sells $1.5 billion

Lloyds Banking Group priced $1.5 billion of 3.87% senior callable fixed-to-fixed-rate notes due July 9, 2025 (A3/BBB+/A+) at par to yield a spread of 350 bps over Treasuries on Thursday, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 375 bps area.

The rate on the notes will reset July 9, 2024 to a fixed rate of one-year Treasuries plus 350 bps.

Goldman Sachs, J.P. Morgan, Lloyds Securities Inc., Morgan Stanley and Wells Fargo Securities, LLC were the bookrunners.

The bank and financial services group is based in London.

TransCanada sells $1.25 billion

TransCanada Pipelines priced $1.25 billion of 4.1% 10-year senior notes (Baa1/BBB+/A-) on Thursday at a spread of Treasuries plus 350 bps, according to a market source and an FWP filing.

The notes were talked to print with a spread in the 375 bps over Treasuries area.

The issue was placed at 99.836 to yield 4.12%.

J.P. Morgan and Citigroup were the bookrunners.

TransCanada is a Calgary, Alta.-based natural gas and oil pipeline and storage company and subsidiary of TransCanada Corp.

Evergy Kansas prints

Evergy Kansas Central priced $500 million of 3.45% 30-year first mortgage bonds (A2/A) on Thursday at a spread of Treasuries plus 220 bps, according to a market source and an FWP filing.

The bonds were initially talked to price at the Treasuries plus 250 bps area.

The issue was sold at 99.591 to yield 3.4725.

MUFG, U.S. Bancorp Investments Inc. and Wells Fargo were the bookrunners.

The electric utility company, formerly known as Westar Energy Inc., is based in Topeka, Kan.

Paccar Financial upsizes

Paccar Financial (A1/A+) priced an upsized $400 million of 2.65% three-year medium-term notes on Thursday at 99.949 to yield 2.668% and a spread of Treasuries plus 240 bps, according to a market source and an FWP filing.

Initial price talk was in the 300 bps to 312.5 bps over Treasuries area.

The deal was upsized from $300 million.

BNP Paribas, J.P. Morgan, MUFG, U.S. Bancorp, ING Financial Markets LLC, Scotia Capital (USA) Inc. and Siebert Williams Shank & Co., LLC were the bookrunners.

Paccar Financial is a financing arm of Bellevue, Wash.-based Paccar Inc.

Ryder System prices

Ryder System priced $400 million of 4.625% five-year medium-term notes at 99.981 and a spread of 425 bps over Treasuries on Thursday, according to a market source and an FWP filing.

The notes (Baa1/BBB/BBB+) were initially talked to price in the 425 bps area.

Lloyds Securities, MUFG, PNC Capital Markets LLC, U.S. Bancorp and Wells Fargo were the bookrunners.

Ryder System is a Miami-based truck rental and fleet management company.

CPPIB brings $1.25 billion

CPPIB Capital (Aaa/AAA/AAA) priced $1.25 billion of 0.75% two-year notes on Wednesday at mid-swaps plus 33 bps, or a spread of Treasuries plus 56.65 bps, according to a market source.

Price guidance was in the mid-swaps plus 35 bps area.

BNP Paribas, Deutsche, Goldman Sachs and TD Securities (USA) LLC were the bookrunners of the Rule 144A and Regulation S offering

CPPIB Capital is a Toronto-based investment management arm of the Canada Pension Plan Investment Board.

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