Florida Light, Toyota, IFC price notes; energy, financials soft; credit spreads widen

By Cristal Cody

Tupelo, Miss., March 11 – A handful of bond deals managed to print over Wednesday’s session while investment-grade credit spreads widened nearly 10 basis points after the World Health Organization classified the coronavirus as a pandemic.

Florida Power & Light Co. priced $174.66 million of 50-year floating-rate notes.

Toyota Motor Credit Corp. sold $100 million of two-year fixed-to-floating-rate medium-term notes.

In addition, World Bank Group member International Finance Corp. brought $1 billion of three-year global social notes to the primary market as part of a $6 billion funding package to assist with the health and economic impacts from the virus outbreak.

World Bank plans up to $8 billion of new issuance for crisis support financing that also includes up to $2.7 billion of financing from International Bank for Reconstruction and Development and $1.3 billion from the International Development Association.

Investment-grade credit spreads softened further on Wednesday after improving in the prior session following Monday’s move out by about 31 bps.

The Markit CDX North American Investment Grade 33 index ended Wednesday nearly 10 bps wider at a spread of 116.09 bps.

Stocks were weak at the open of the session and finished down more than 4%. The Dow Jones industrial average shed more than 1,460 points, or 5.86%, on the day.

Treasuries gave back some gains by the day’s close.

The benchmark 10-year note yield was down 3 bps at 0.716% over the morning and headed out up 7 bps at 0.82%.

Deal volume week to date totals more than $5 billion with the bulk of issuance seen on Tuesday in offerings led by JPMorgan Chase & Co.’s $2.25 billion of six-year fixed-to-floating rate senior notes and Starbucks Corp.’s $1.75 billion three-part offering of senior notes.

The financial markets had improved on Tuesday on news of potential U.S. stimulus measures in response to the coronavirus.

U.S. President Donald Trump will give an Oval Office address on the coronavirus at 9 p.m. ET Wednesday.

Bonds soften

Investment-grade bonds were mostly weak over the day, sources report.

Energy Transfer Operating LP 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) eased about 11 bps to the 409 bps interpolated area.

The notes were down nearly 1 point at 92.57.

The Dallas-based natural gas midstream and intrastate transportation and storage company sold $1.5 billion of the bonds on Jan. 7 at 99.843 to yield 3.769% and a Treasuries plus 255 bps spread.

Financial paper was seen flat to about 50 bps wider on Wednesday, a source said.

Morgan Stanley’s 2.699% global medium-term senior fixed-to-floating-rate notes due Jan. 22, 2031 eased 13 bps to the 176 bps area and were down nearly 3 points on the day at 99.75.

Morgan Stanley (A3/BBB+/A) sold $3.5 billion of the notes on Jan. 16 at par to yield a spread of Treasuries plus 90 bps.

Goldman Sachs Group Inc.’s 2.6% senior notes due Feb. 7, 2030 (A3/BBB+/A) declined to 98.74 from 100.19 on Tuesday and a 101 handle on Monday.

Goldman Sachs priced $2 billion of the notes on Feb. 5 at 99.96 to yield 2.06% and a spread of Treasuries plus 95 bps.

Florida Power sells floaters

Florida Power & Light priced $174,657,000 of floating-rate notes due March 13, 2070 (A1/A/) at par to yield Libor minus 30 bps in the offering on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The rate will be reset quarterly beginning June 13, 2020.

UBS Securities LLC, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBC Capital Markets, LLC were the bookrunners.

Florida Power & Light is a Juno Beach, Fla.-based electric utility.

Toyota brings fixed/floaters

Toyota Motor Credit sold $100 million of fixed-to-floating-rate medium-term notes due March 16, 2022 (Aa3/AA-/A+) on Wednesday at par to yield 1%, according to a 424B2 filing.

The rate on the notes will reset Sept. 16, 2020 to a floating rate of Libor plus 27 bps.

Morgan Stanley was the bookrunner.

Toyota Motor Credit is a Torrance, Calif.-based financing arm and subsidiary of Toyota Motor Corp.

IFC prices $1 billion

International Finance (Aaa/AAA/) priced $1 billion of 0.5% three-year global social notes at mid-swaps plus 13 bps, or a Treasuries plus 4.4 bps spread, according to a market source.

Initial price talk was in the mid-swaps plus 17 bps area.

BofA Securities, Inc., Barclays, Credit Agricole CIB and DZ Bank were the bookrunners.

Washington, D.C.-based International Finance is a member of the World Bank Group.

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