Japan Bank for International Cooperation sells $5 billion; Mitsui Fudosan, Marathon price

By Cristal Cody

Tupelo, Miss., July 13 – Japan Bank for International Cooperation led pricing action in the high-grade primary market on Thursday with a $5 billion four-part issue of guaranteed senior bonds.

Japan real estate developer Mitsui Fudosan Co., Ltd. also sold a $500 million issue of 10-year notes.

In other issuance on Thursday, Marathon Oil Corp. priced $1 billion of split-rated 10-year senior notes.

Marathon Oil said in a news release that the offering and subsequent redemption of three tranches of notes will reduce its approximate $750 million of gross debt and generate annual cash interest savings of about $60 million.

“Concurrent with the offering of 2027 notes, the company terminated a notional amount of $750 million in interest rate hedges related to the offering for an estimated gain of $54 million, lowering the estimated all-in yield (after giving effect to underwriting fees and interest rate hedge settlements) to 3.862%,” Marathon Oil said in the release.

In the secondary market, UnitedHealth Group Inc.’s senior notes (A3/A+/A) traded about 10 basis points tighter to flat on the long end. Moody’s Investors Service changed the outlook on the company to stable from negative on Thursday. UnitedHealth had been on negative outlook since March 2015.

The Markit CDX North American Investment Grade index tightened more than 1 bp during the session to close the day at a spread of 59 bps.

Japan Bank prices $5 billion

Japan Bank for International Cooperation priced $5 billion of guaranteed senior bonds (A1/A+) in four tranches on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The bank priced $1 billion of three-year floating-rate notes at par to yield Libor plus 39 bps.

The $1.5 billion tranche of 2.125% three-year fixed-rate notes priced at 99.948 to yield 2.143% and a spread of Treasuries plus 57.6 bps. The notes were initially talked in the mid-swaps plus 43 bps area.

In the five-year tranche, the bank sold $1.25 billion of the 2.375% notes at 99.542 to yield 2.473%, or a spread of Treasuries plus 57.1 bps. The five-year notes were talked to price in the mid-swaps plus 57 bps area.

The final $1.25 billion tranche of 2.875% 10-year notes was sold at 99.115 to yield 2.978%, or Treasuries plus 62.1 bps. The 10-year notes were guided to price in the mid-swaps plus 72 bps area.

BofA Merrill Lynch, Daiwa Capital Markets Europe Ltd., J.P. Morgan Securities plc and Nomura International plc were the bookrunners.

The bonds are guaranteed by Japan.

Proceeds will be used for the Tokyo financial institution’s ordinary operations.

Mitsui Fudosan in primary

Mitsui Fudosan (A2/A) priced a $500 million offering of 3.65% 10-year notes with a spread of Treasuries plus 130 bps on Thursday, according to a market source.

The notes were talked to price in the Treasuries plus 135 bps area, plus or minus 5 bps.

BofA Merrill Lynch and Nomura were the arrangers.

The company held global investor calls on Tuesday for the deal.

Mitsui Fudosan is a real estate development company based in Tokyo.

Marathon Oil sells $1 billion

Marathon Oil sold $1 billion of split-rated 4.4% 10-year senior notes (Ba1/BBB-/BBB-) on Thursday on the tight side of talk with a spread of Treasuries plus 210 bps, according to a market source and an FWP filing with the SEC.

The notes priced at 99.634 to yield 4.446%.

Price talk on the notes was in the Treasuries plus 215 bps area, plus or minus 5 bps.

Bookrunners were J.P. Morgan Securities LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., SG Americas Securities, LLC and TD Securities (USA) LLC.

Proceeds will be used along with existing cash to redeem $682 million of outstanding 6% senior notes due 2017, $854 million of outstanding 5.9% senior notes due 2018 and $228 million of outstanding 7.5% senior notes due 2019.

The international energy company for oil sands mining and gas exploration and production is based in Houston.

UnitedHealth mixed

UnitedHealth Group’s 3.375% notes due April 15, 2027 tightened more than 10 bps in secondary trading on Thursday to 72 bps bid, a market source said.

The company sold $625 million of the 10-year notes on March 8 at a spread of 87.5 bps over Treasuries.

UnitedHealth Group’s 4.25% notes due April 15, 2047 were flat at 101 bps bid.

UnitedHealth Group sold $725 million of the notes in the March 8 offering at a Treasuries plus 110 bps spread.

The diversified health company is based in Minnetonka, Minn.

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