High-grade deal action heavy; Discovery Communications, MPT, Xerox, TD Bank price notes

By Cristal Cody

Tupelo, Miss., Sept. 7 – The investment-grade bond market showed no signs of fatigue following two back-to-back sessions of heavy issuance with new issuance on Thursday led by Discovery Communications, LLC’s $6.3 billion offering.

Discovery Communications priced senior notes in six tranches.

Also on Thursday, MPT Operating Partnership, LP and MPT Finance Corp. priced an upsized $1.4 billion of 10-year split-rated senior notes.

Xerox Corp. tapped the primary market with a $1 billion offering of long five-year notes.

Toronto-Dominion Bank doubled the size of its three-year note offering to $1 billion.

The Markit CDX North American Investment Grade index closed mostly unchanged at a spread of 59 basis points.

In the secondary market, Xerox’s existing 3.5% senior notes due Aug. 20, 2020 traded about 5 bps softer on the day at 135 bps bid, a source said.

Xerox sold $400 million of the notes on Aug. 17, 2015 at a spread of Treasuries plus 212.5 bps.

Discovery sells $6.3 billion

Discovery Communications (Baa3/BBB-/BBB-) sold $6.3 billion of senior notes in six tranches on Thursday, according to a market source.

The company priced $400 million of two-year floaters at Libor plus 71 bps.

The $500 million tranche of 2.2% two-year fixed-rate notes were placed with a spread of 95 bps over Treasuries.

Discovery Communications priced $1.2 billion of 1.95% notes due March 20, 2023 at a Treasuries plus 135 bps spread.

The company sold $1.7 billion of 3.95% notes due March 20, 2028 with a 195 bps plus Treasuries spread.

In the 20-year tranche, the company sold $1.25 billion of 5% notes at a spread of 235 bps over Treasuries.

The final $1.25 billion tranche of 5.2% 30-year notes priced with a spread of 255 bps over Treasuries.

Goldman Sachs & Co., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC were the bookrunners.

The notes will be guaranteed by Discovery Communications, Inc.

Discovery Communications, a global media company based in Silver Spring, Md., plans to acquire Scripps Networks Interactive in a $14.6 billion cash and stock deal.

Scripps Network Interactive is a media company based in Knoxville.

Proceeds from the deal will be used for the merger. If the merger is not completed, proceeds will be used for general corporate purposes, which may include the repayment of the company’s senior fixed-rate notes.

MPT upsizes

MPT Operating Partnership/MPT Finance priced an upsized $1.4 billion of 5% 10-year split-rated senior notes (Ba1/BBB-/) on Wednesday at par to yield a spread of 294 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The deal was upsized from $1 billion.

J.P. Morgan Securities LLC and Barclays were the active bookrunners.

The notes are guaranteed by parent company Medical Properties Trust, Inc.

The company plans to use $364.4 million of the proceeds to redeem all $350 million of outstanding 6.375% senior notes due 2022. The remaining proceeds will be used together with cash on hand and other debt capital sources to finance the closing of its acquisitions of 10 acute care hospitals and one behavioral health facility operated by Iasis Healthcare for about $1.4 billion and $100 million in minority preferred interests of Steward Health Care System LLC.

If the deals do not close on or before 180 days after the notes offering closes, the issuers will be required to redeem $500 million of the notes in a special mandatory redemption.

Medical Properties Trust is a Birmingham, Ala.-based healthcare real estate investment trust company.

Xerox prices $1 billion

Xerox priced $1 billion of 3.625% senior notes due March 15, 2023 on Thursday at a spread of 200 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.92 to yield 3.641%.

The company dropped a planned second tranche of fixed-rate notes from the final sale.

BNP Paribas Securities Corp., Citigroup Global Markets, Goldman Sachs, J.P. Morgan Securities, BofA Merrill Lynch, Mizuho Securities USA Inc. and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes, including debt repayment.

Xerox is a maker of office machines and is based in Norwalk, Conn.

TD Bank prices $1 billion

Toronto-Dominion Bank priced an upsized $1 billion of 1.85% three-year series A senior medium-term notes (Aa2/AA-/AA-) on Thursday at a spread of 52 bps over Treasuries, according to a market source.

The notes priced on the tight side of talk in the Treasuries plus 55 bps area.

The deal was upsized from $500 million.

TD Securities (USA) LLC, Goldman Sachs and nabSecurities, LLC were the bookrunners.

Proceeds will be used to fund the financing or refinancing of eligible green projects.

The bank and financial services company is based in Toronto.

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