Tennessee Valley eyes $1 billion bonds; Toronto-Dominion sells C$350 million preferreds

By Devika Patel

Knoxville, Tenn., March 5 – Primary activity in the investment-grade bond market on Monday saw one new deal brought to market and two deals pricing, with Knoxville, Tenn., electricity providing agency Tennessee Valley Authority launching $1 billion of global power bonds due March 15, 2020; Toronto-based bank and financial services company Toronto-Dominion Bank pricing C$350 million of C$25-par term non-cumulative five-year rate reset preferred shares; and Jackson, Mich., parent company to electric and gas utilities CMS Energy Corp. pricing $200 million of 5.625% $25-par junior subordinated notes due March 15, 2078.

Tennessee Valley plans bonds

Tennessee Valley Authority has announced that it plans to sell $1 billion of global power bonds.

The bonds, which are due on March 15, 2020, will be non-callable.

Barclays, BofA Merrill Lynch, Morgan Stanley & Co. LLC and TD Securities (USA) LLC are the joint bookrunners.

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

TD Bank prices preferreds

TD Bank sold C$350 million of C$25-par term non-cumulative five-year rate reset preferred shares, series 18, in a Canadian offering. The deal priced for C$250 million on Monday and was increased a few hours later.

TD Bank sold 14 million preferreds at C$25.00 per share. There is a C$50 million greenshoe of 2 million preferreds.

The preferreds pay a non-cumulative quarterly fixed dividend of 4.7% per year initially. After April 30, 2023, the dividend rate will be reset every five years at a rate equal to the three-month Government of Canada bond yield plus 270 basis points.

Holders of the preferreds may convert their shares into non-cumulative floating-rate preferred shares, series 19, on April 30, 2023 and on April 30 every five years after that date.

Proceeds will be used for general corporate purposes.

CMS sells $25-par notes

CMS Energy priced a $200 million issue of 5.625% $25-par junior subordinated notes (Baa2/BBB-/BB+) on Monday.

The notes will be due on due March 15, 2078.

BofA Merrill Lynch, RBC Capital Markets Corp. and Wells Fargo Securities LLC were the joint bookrunners for the offering. Citigroup Global Markets Inc., Comerica Securities, Fifth Third Securities Inc. and U.S. Bancorp Investments Inc. were the co-managers.

The notes have a par call after March 15, 2023.

Proceeds from the deal will be used to repay a portion of the company’s $225 million outstanding term loan.

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