Danske, Magellan Midstream, TTX in primary; Fox, Western and Southern Life, CPPIB eyed

By Cristal Cody

Tupelo, Miss., Jan. 11 – The investment-grade market continued to see new issuance on Friday, bringing the week’s bond volume to about $41 billion.

Danske Bank A/S priced $3 billion of senior notes in two tranches.

Magellan Midstream Partners, LP sold $500 million of 30-year senior notes.

In addition, TTX Co. launched a $350 million offering of 30-year medium-term notes.

Several issuers also may be looking to tap the primary market soon.

Fox Corp. began a round of fixed income investor calls on Friday.

Western and Southern Life Insurance Co. will hold investor calls on Monday and Tuesday for a dollar-denominated note offering.

CPPIB Capital Inc. also intends to price a Rule 144A- and Regulation S-eligible offering of dollar-denominated notes.

Deal volume over the week beat market forecasts of about $25 billion to $30 billion of issuance.

Supply this week was led by Anheuser-Busch InBev Worldwide Inc.’s $15.5 billion six-part sale of fixed-rate notes on Thursday.

Year to date, issuers have priced about $51 billion of corporate bonds in the first two weeks of 2019.

Looking ahead to the upcoming week, market sources predict about $30 billion to $35 billion of new high-grade bond volume.

The Markit CDX North American Investment Grade 31 index ended mostly unchanged at a spread of 78 basis points.

Danske Bank prices

Danske Bank priced $3 billion of senior notes (Baa2/A/A) in two tranches on Friday wider than guidance but better than initial talk, according to a market source.

The bank sold $1.5 billion of 5% three-year notes at a spread of Treasuries plus 260 bps. The notes were initially talked to price in the Treasuries plus 280 bps area with guidance later tightened to Treasuries plus 255 bps.

A $1.5 billion tranche of 5.375% five-year notes was sold at a spread of 290 bps over Treasuries, compared to guidance of a 285 bps spread and initial talk in the Treasuries plus 310 bps area.

BofA Merrill Lynch, Barclays, Danske Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and UBS Securities LLC were the lead managers.

Danske Bank is a Copenhagen, Denmark-based bank.

Magellan Midstream prices

Magellan Midstream Partners sold $500 million of 4.85% 30-year senior notes at a spread of 185 bps over Treasuries on Friday, according to a market source, a news release and an FWP filing with the Securities and Exchange Commission.

Initial price talk was in the Treasuries plus 190 bps to 195 bps area.

The notes (Baa1/BBB+) were sold at 99.371 to yield 4.89%.

JPMorgan, Mizuho Securities USA LLC, RBC Capital Markets LLC, SMBC Nikko Securities America Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

TTX launches issue

TTX launched a $350 million offering of medium-term notes due Feb. 1, 2049 (Baa1/A/A-) at a spread of 157 bps over Treasuries on Friday, according to a market source.

Price guidance was in the Treasuries plus 165 bps area, plus or minus 5 bps. The notes were initially talked in the Treasuries plus 180 bps spread area.

Citigroup Global Markets Inc., JPMorgan and Wells Fargo Securities LLC are the bookrunners.

TTX is a Chicago-based railcar and freight car management service provider.

Fox considers deal

Fox (Baa2/BBB) began holding fixed income investor calls on Friday for a possible bond offering, according to a market source.

Citigroup, Deutsche Bank Securities Inc. and Goldman Sachs are the arrangers.

The mass media company is based in New York City.

Western and Southern in view

Western and Southern Life Insurance plans to price a dollar-denominated offering of fixed-to-floating rate surplus notes due 2069 (A/A+), according to a market source.

Fixed income investor calls are scheduled for Monday and Tuesday.

Citigroup, Credit Suisse Securities (USA) LLC and JPMorgan are the bookrunners for the Rule 144A- and Regulation S-eligible offering.

Western and Southern Life Insurance is a Cincinnati-based provider of life insurance, annuity and investment products.

CPPIB in deal pipeline

CPPIB Capital (Aaa/AAA/AAA) plans to sell U.S. dollar-denominated notes in a Rule 144A- and Regulation S-eligible transaction, according to a market source.

BofA Merrill Lynch, Citigroup, Deutsche Bank, JPMorgan and TD Securities (USA) LLC are the lead managers.

CPPIB Capital is a Toronto-based investment management company for the Canada Pension Plan Investment Board.

Front-end flows negative

Meanwhile, this week has seen an overall $7.09 billion inflow to bonds, up from a $2.24 billion outflow in the prior week and the largest inflow since January 2017, Yuri Seliger, a credit strategist with BofA Merrill Lynch, said in a note released on Friday.

“Flows to fixed income were stronger for all major sectors with the exception of government bonds, where inflows instead declined following elevated buying earlier,” Seliger said.

In the high-grade space, which includes corporates, agencies, Treasuries and mortgages, a $1.8 billion inflow to ETFs was partially offset by a $1.54 billion outflow from funds for a net inflow of $260 million, up from a $4.35 billion outflow a week earlier, according to the note.

“Notably the strong recent inflows to front-end high grade turned negative this past week with a $1.19 [billion] outflow – the first since March of last year – and down from a $140 [million] inflow in the prior week,” Seliger said.

High grade excluding short-term flows turned positive for the week ended Jan. 9 with a $1.45 billion inflow after a $4.5 billion outflow in the previous week.

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