Abbott Labs sells $15.1 billion notes; KeyBank, Chevron Phillips Chemical tap market

By Cristal Cody

Eureka Springs, Ark., Nov. 17 – Abbott Laboratories tapped the high-grade bond market on Thursday with a $15.1 billion six-tranche offering of senior notes.

In addition, KeyBank NA priced $750 million of five-year fixed- and floating-rate bank notes.

Also, Chevron Phillips Chemical Co. LLC came with a $700 million issue of 10-year senior notes.

Since the U.S. presidential election, “energy spreads have tightened the most out of any sector, tightening 6 [basis points],” RBC Capital Markets, LLC analysts said in a note on Thursday. “Crude oil prices have been subject to wild swings over the last two months, moving from $43 to $51, and then back down to $43. These price swings had no impact on energy spreads, as they continued to tighten.”

Duke Energy Corp.’s 2.65% senior notes due 2026 headed out about 2 bps better in secondary trading.

Petroleum refiner HollyFrontier Corp.’s 5.875% senior notes due April 1, 2026 that reopened in the previous session were quoted about 10 bps tighter in the secondary market earlier on Thursday.

In other secondary trading, Westpac Banking Corp.’s 4.322% fixed-to-floating rate subordinated notes due 2031 that priced on Tuesday were flat.

The Markit CDX North American Investment Grade index was mostly unchanged on the day at a spread of 75 bps.

Abbott brings $15.1 billion

Abbott Laboratories priced $15.1 billion of fixed-rate senior notes (Baa3/A+) in six parts on Thursday, according to a market source.

The company sold $2.85 billion of 2.35% three-year notes at a spread of 105 bps over Treasuries.

A $2.85 billion tranche of 2.9% five-year notes priced with a 120 bps plus Treasuries spread.

Abbott sold $1.5 billion of 3.4% seven-year notes at 140 bps over Treasuries.

In the 10-year tranche, the company priced $3 billion of 3.75% notes at a spread of 155 bps over Treasuries.

Abbott brought $1.65 billion of 4.75% 20-year notes with a spread of 175 bps over Treasuries.

In the final tranche, the company sold $3.25 billion of 4.9% 30-year notes at a spread of Treasuries plus 190 bps.

All of the tranches priced on the tight side of guidance.

BofA Merrill Lynch, Barclays and Morgan Stanley & Co. LLC were the bookrunners.

The notes have make-whole calls and par calls, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds will be used to help fund the cash portion of the Abbott Park, Ill., pharmaceutical health care products company’s planned $25 billion acquisition of St. Jude Medical, Inc. and for general corporate purposes.

KeyBank sells fixed, floaters

KeyBank priced $750 million of five-year fixed- and floating-rate bank notes (A3/A-/A-) on Thursday, according to a market source.

The company sold $250 million of five-year floaters at Libor plus 81 bps.

KeyBank priced $500 million of 2.5% notes due Nov. 22, 2021 at a spread of 83 bps over Treasuries.

Goldman Sachs & Co., J.P. Morgan Securities LLC, KeyBank Capital Markets Inc. and Morgan Stanley were the lead managers.

KeyBank is a Cleveland-based regional bank.

Chevron Phillips Chemical

Chevron Phillips Chemical sold $700 million of 3.4% 10-year senior notes on Thursday with a spread of 115 bps over Treasuries, a market source said.

The notes (A2/A-) priced on the tight side of guidance.

JPMorgan, Mizuho Securities USA Inc. and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes.

Chevron Phillips Chemical is a The Woodlands, Texas-based petrochemical company owned by Chevron Corp. and Phillips 66.

Duke Energy firms

Duke Energy’s 2.65% notes due 2026 traded about 2 bps better on Thursday at 112 bps bid in the secondary market, a source said.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps over Treasuries.

The diversified energy company is based in Charlotte, N.C.

HollyFrontier tightens

HollyFrontier’s 5.875% senior notes due 2026 were quoted earlier on Thursday at 352 bps offered in the secondary market, a source said.

The company priced a $750 million add-on to the issue on Wednesday at a spread of 362.5 bps over Treasuries.

HollyFrontier originally sold the notes on March 15, 2016 in a $250 million offering at Treasuries plus 400 bps.

The petroleum refiner is based in Dallas.

Westpac Banking flat

Westpac Banking’s 4.322% fixed-to-floating rate subordinated notes due 2031 were unchanged earlier in the day at 204 bps offered, according to a market source.

The company sold $1.5 billion of the notes on Tuesday at a spread of 210 bps over Treasuries.

The Australian bank and financial services provider is based in Sydney.

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