Procter & Gamble, Illinois Tool Works, Wabtec, CMS Energy among issuers; credit spreads soften

By Cristal Cody

Eureka Springs, Ark., Oct. 31 – Procter & Gamble Co., Illinois Tool Works, Inc., CMS Energy Corp., Wabtec Corp. and CMS Energy Corp. tapped the high-grade primary market on Monday.

Procter & Gamble placed a $1.75 billion two-part offering of notes.

Wabtec brought a $750 million Rule 144A and Regulation S offering of 10-year senior notes.

CMS Energy sold $275 million of long 10-year senior notes during the session.

The Markit CDX North American Investment Grade index eased about 1 basis point over the day to close at a spread of 79 bps.

United Technologies Corp.’s new 3.75% senior notes due 2046 traded about 1 bp softer early on Monday from where they were quoted on Friday afternoon.

Wells Fargo & Co.’s 3% notes due 2026 were unchanged.

P&G sells $1.75 billion

Procter & Gamble priced $1.75 billion of notes (Aa3/AA-/) in two parts on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $875 million of 1.7% five-year notes at 99.795 to yield 1.743% and a spread of 43 bps plus Treasuries.

Procter & Gamble priced $875 million of 2.45% 10-year notes at 99.859 to yield 2.466%. The 10-year notes priced with a spread of 63 bps over Treasuries.

Both tranches priced on the tight side of guidance.

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to fund all or part of the redemption of all $1.25 billion of the company’s 4.7% notes due 2019 on Nov. 3 and all or part of a previously announced debt tender offer for 12 series of bonds.

The consumer products company is based in Cincinnati.

Illinois Tool Works prices

Illinois Tool Works sold $1 billion of 2.65% 10-year senior notes on Monday at 99.685 to yield 2.686%, according to an FWP filing with the SEC.

The notes (A2/A+/) priced with a spread of 85 bps over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays, Goldman Sachs & Co., Mizuho Securities USA Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay short-term commercial paper debt and for general corporate purposes.

Glenview, Ill.-based Illinois Tool Works manufactures industrial products and equipment.

Wabtec raises $750 million

Wabtec sold $750 million of 3.45% 10-year senior notes with a spread of Treasuries plus 162.5 bps over Treasuries in a Rule 144A and Regulation S transaction on Monday, according to a market source and a company release.

The notes priced on the tight side of guidance.

JPMorgan, BofA Merrill Lynch, PNC Capital Markets LLC, HSBC and Societe Generale were the joint bookrunning managers.

The notes will initially be guaranteed by each of Wabtec's subsidiaries that guarantees its obligations under its existing credit facilities.

Wabtec intends to use the proceeds to contribute to the payment of the cash portion of the purchase price for Wabtec's previously announced acquisition of Faiveley Transport SA and for refinancing of Faiveley Transport's outstanding debt.

The Wilmerding, Pa.-based company provides value-added, technology-based products and services for rail and other industrial markets.

CMS Energy sells notes

CMS Energy sold $275 million of 2.95% senior notes due Feb. 15, 2027 at 99.651 to yield 2.99%, according to an FWP filing with the SEC on Monday.

The notes (Baa2/BBB/BBB) priced with a spread of 115 bps over Treasuries.

Barclays, Goldman Sachs, JPMorgan Securities and Wells Fargo were the bookrunners.

Proceeds will be used to redeem the company’s $250 million of 5.05% senior notes due Feb. 15, 2018 and for general corporate purposes.

The parent company of electric and gas utility subsidiaries is based in Jackson, Mich.

United Technologies eases

United Technologies’ 3.75% notes due 2046 traded about 1 bp softer at 120 bps bid, according to a market source earlier in the day.

The company sold $1.1 billion of the 30-year notes (A3/A-/) on Thursday at a spread of 118 bps plus Treasuries.

United Technologies is a Hartford, Conn.-based company that provides technology products and services to the building and aerospace industries.

Wells Fargo stable

Wells Fargo’s 3% notes due 2026 were unchanged in secondary trading earlier on Monday at 121 bps offered, according to a market source.

The notes (A2/A/AA-) were sold in a $3.5 billion tranche on Oct. 19 at a spread of Treasuries plus 130 bps.

The retail, commercial and corporate banking services provider is based in San Francisco.

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