GM, Philip Morris price tight; Canadian National upsizes; Morgan Stanley, Citigroup, Visa tighten

By Aleesia Forni and Cristal Cody

New York, Feb. 18 – General Motors Co., Philip Morris International Inc. and American Honda Finance Corp. hit up Thursday’s primary to price $8.1 billion of new bonds despite a softer market backdrop.

Oil prices closed higher but were off their earlier highs, while stocks snapped a three-day rally to close the session lower as concerns about economic growth weighed on the market.

In the primary, all deals priced during the session were able to bring in pricing from levels set at the guidance stage.

Both General Motors and Philip Morris International sold $2 billion multi-part deals.

General Motors sold tranches of its new two-part split-rated issue between 22.5 basis points to 25 bps inside initial price thoughts, while spreads on tranches of Philip Morris International’s new deal firmed by around 20 bps compared to talk.

Canadian National Railway Co. upsized its deal to $500 million from initial size thoughts of $400 million. The deal’s order book was more than three times oversubscribed, a market source said.

The Canadian primary market saw a deal from Ford Credit Canada Ltd. on Thursday. The company priced C$650 million of 3.14% senior notes due June 14, 2019 (Baa2/BBB-/DBRS: BBB) at par to yield a spread of 265 basis points over the interpolated Government of Canada bond curve.

In the secondary market, investment-grade bonds mostly traded stronger.

Morgan Stanley’s 3.875% senior notes due 2026 have improved about 20 bps over the week.

Citigroup Inc.’s 3.7% subordinated notes due 2026 have tightened 14 bps in post-holiday trading.

Visa Inc.’s senior notes (A1/A+) are trading 4 bps better on the week.

The Markit CDX North American Investment Grade index ended the day 1 bp tighter from the previous session at a spread of 117 bps.

GM prices tight

In a crossover new issue, General Motors received a solid reception on Thursday, attracting an order book of more than $10 billion, according to an informed source.

The company sold $2 billion of senior notes (Ba1/BBB-/BBB-) on Thursday in two tranches due April 1, 2036 and April 1, 2046, according to an informed source.

The new issue included $1.25 billion of 6.6% 20-year bonds sold at 99.92 to yield 6.606%, or Treasuries plus 400 bps.

The notes were guided in the Treasuries plus 405 bps area and initially talked in the 425 bps area over Treasuries.

A $750 million tranche of 6.75% 30-year notes sold at 99.906 to yield 6.756% with a spread of Treasuries plus 415 bps.

Pricing came at the tightest side of guidance set in the 420 bps area over Treasuries. The notes were previously talked in the area of Treasuries plus 437.5 bps.

Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are the joint bookrunners.

The Detroit-based automaker plans to use the proceeds to make a discretionary contribution to its U.S. hourly pension plan and for general corporate purposes.

Philip Morris sells $2 billion

Tobacco company Philip Morris International sold $2 billion of senior notes (A2/A/A) in three tranches on Thursday, according to a market source.

The company sold $500 million of 1.375% three-year notes at 99.643 to yield 1.497%, or Treasuries plus 63 bps.

The notes sold inside guidance set in the Treasuries plus 65 bps area, which had tightened from talk in the Treasuries plus 85 bps area.

A $750 million tranche of 1.875% five-year notes sold at 99.172 to yield 2.05%, or Treasuries plus 85 bps.

Price guidance was in the Treasuries plus 90 bps area after having tightened from talk in the Treasuries plus 105 bps area.

And $750 million of 2.75% 10-year notes sold at Treasuries plus 110 bps. Pricing was at 99.195 to yield 2.843%.

Pricing was at the tight end of guidance set in the Treasuries plus 115 bps area. Initially, talk was in the Treasuries plus 130 bps area.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., ING Financial Markets LLC and Mizuho Securities USA Inc. are the bookrunners.

Proceeds will be added to the company’s general funds, which may be used for general corporate purposes, to refinance debt to meet working capital requirements or to repurchase common stock.

The producer of cigarettes and tobacco products is based in New York City.

Standard Industries’ crossover

In a second crossover deal, Standard Industries, Inc. priced an upsized $1 billion of split-rated (Ba2/BBB-) five-year and seven-year senior notes on Thursday, syndicate sources said.

The issue was upsized from the originally planned $650 million and the offering was restructured to add the tranche of seven-year paper to the original single tranche of five-year notes.

The final offering was evenly split into two tranches of $500 million each.

The five-year notes priced at par to yield 5 1/8%, tight to price talk which had envisioned a yield of 5¼%.

The seven-year notes priced at par to yield 5½%, in line with expectations.

The offering was brought to market via joint global coordinators Bank of American Merrill Lynch, which is handling billing and delivery, and Deutsche Bank Securities Inc. Citigroup Global Markets Inc. and Goldman Sachs & Co. were joint bookrunners.

The Rule 144A for life/Regulation S offering attracted interest from high-yield investors, unlike General Motors, which was largely an investment-grade play.

Issuer Standard Industries is a Parsippany, N.J.-based manufacturer of roofing products, insulation products and accessories for the residential and commercial roofing markets. It was formerly known as Building Materials Corp. of America. Proceeds will be used to help fund the acquisition of Denmark-based Icopal.

Westpac covered bond

In other primary happenings, Westpac Banking Corp. priced $1.35 billion of 2.1% covered bonds (Aaa/AAA) on Thursday at a spread of 98 bps over mid-swaps, a market source said.

The Rule 144A and Regulation S issue sold inside price guidance set in the 100 bps area over mid-swaps.

Bookrunners were Citigroup Global Markets Inc., HSBC Securities, TD Securities and Westpac Bank.

The banking organization is based in Sydney, Australia.

NIB upsizes

In another Yankee new issue, Nordic Investment Bank sold an upsized $1.25 billion issue of 1.125% global notes (Aaa/AAA) due Feb. 25, 2019 on Thursday at mid-swaps plus 22 bps, according to a market source and a FWP filed with the Securities and Exchange Commission.

Pricing was at 99.997.

Bookrunners were Citigroup Global Markets Inc., HSBC Securities, Nomura International and TD Bank Securities.

The financier for five Nordic countries is based in Helsinki, Finland.

American Honda notes

American Honda Finance Corp. sold $1 billion of medium-term notes, series A, (A1/A+) in two parts on Thursday, according to two FWP filings with the Securities and Exchange Commission.

There was $700 million of 1.7% three-year fixed-rate notes priced at 99.98 to yield 1.707%, or Treasuries plus 83 bps.

The notes were talked in the 85 bps area over Treasuries.

And $300 million of floating-rate notes sold at par to yield Libor plus 82.5 bps.

BofA Merrill Lynch, Barclays, Deutsche Bank Securities and SMBC Nikko were the bookrunners.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Canadian National upsizes

Canadian National Railway Co. sold an upsized $500 million of 2.75% 10-year senior notes (A2/A) on Thursday at a spread of Treasuries plus 102 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.617 to yield 2.794%.

The deal was upsized from $400 million.

The notes sold at the tight side of price guidance set in the Treasuries plus 105 bps area and inside initial talk in the Treasuries plus 120 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used for general corporate purposes, including the redemption and refinancing of outstanding debt and share repurchases.

The railroad company is based in Montreal.

Fannie Mae plans notes

Fannie Mae announced on Thursday that it plans to price an offering of Benchmark Notes due Feb. 26, 2019.

Barclays, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint lead managers.

The deal is expected to close on Tuesday.

The mortgage credit provider is based in Washington, D.C.

Morgan Stanley firms

In the secondary, Morgan Stanley’s 3.875% notes due 2026 have come in about 20 bps over the week to the 193 bps bid area, a source said.

Morgan Stanley sold $3 billion of the notes (A3/BBB+/A) on Jan. 22 at 185 bps plus Treasuries.

The financial services company is based in New York City.

Citi tightens

Citigroup’s 3.7% notes due 2026 headed out about 14 bps tighter on the week in the secondary market at 180 bps bid, a source said.

Citigroup sold $2 billion of the notes (Baa1/BBB+/A) on Jan. 5 at a spread of Treasuries plus 148 bps.

The financial services company is based in New York.

Visa improves

Visa’s 3.15% notes due 2025 have tightened 4 bps over the week to 110 bps bid in secondary trading, a market source said.

The company sold $4 billion of the notes on Dec. 9 at 97 bps over Treasuries.

The retail electronic payments network operator is based in San Francisco.

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