Issuers flood high-grade market; Bank of England, TransCanada, Citizens Bank, Moody’s price

By Cristal Cody

Tupelo, Miss., Feb. 27 – High-grade issuers priced more than $10 billion of bonds over Monday’s session.

The Bank of England sold $2 billion of three-year dollar-denominated notes in a Rule 144A and Regulation S transaction.

TransCanada Trust priced $1.5 billion of 60-year trust fixed- to floating-rate notes.

Citizens Bank, NA priced a $1 billion two-tranche offering of three-year senior notes.

In addition, Moody’s Corp., Alabama Power Co., RPM International Inc., Consolidated Edison, Inc., Textron Inc. and Westar Energy, Inc. tapped the primary market.

Westpac Banking Corp. and Charles Schwab Corp. also were expected to price.

About $20 billion to $25 billion of new issuance was forecast for the week.

The Markit CDX North American Investment Grade index tightened about 1 basis point to close at a spread of 62 bps.

Bank of England prices

The Bank of England (Aa1/AA/AA) priced $2 billion of 1.75% three-year dollar-denominated notes in a Rule 144A and Regulation S transaction on Monday at a spread of 34 bps over Treasuries, a source said.

BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman, Sachs & Co. and HSBC Securities (USA) Inc. were the lead managers.

London-based Bank of England is the central bank of the United Kingdom.

TransCanada sells 60-year notes

TransCanada Trust priced $1.5 billion of series 2017-A 60-year trust fixed- to floating-rate notes (Baa2/BBB/) on Monday at par to yield 5.3%, according to an FWP filing with the Securities and Exchange Commission.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the lead managers.

The notes will reset to a floating rate from March 15, 2027 until March 15, 2047 at Libor plus 320.8 basis points and on March 15, 2047 through the March 15, 2077 maturity at Libor plus 395.8 bps.

The notes are guaranteed by parent company TransCanada Pipelines Ltd.

TransCanada Pipelines is a natural gas and oil pipeline and storage company based in Calgary, Alta.

Citizens Financial raises $1 billion

Citizens Bank priced $1 billion of three-year senior notes (Baa1/A-/BBB+) in two parts on Monday, according to a market source and a news release from parent Citizens Financial Group, Inc.

Citizens Bank priced $300 million of floating-rate notes due 2020 at Libor plus 54 bps.

The company priced $700 million of 2.25% notes due 2020 at a spread of Treasuries plus 83 bps.

Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Citizens Capital Markets, Inc. and J.P. Morgan Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The bank is based in Providence, R.I.

Moody's prices fixed, floaters

Moody's sold $800 million of senior notes (/BBB+/BBB+) in fixed- and floating-rate tranches on Monday, according to an FWP filing with the SEC.

The company priced $500 million of 2.75% notes due Dec. 15, 2021 at 99.691 to yield 2.82% and a spread of 95 bps over Treasuries.

Moody’s sold $300 million of floating-rate notes due Sept. 4, 2018 at par to yield Libor plus 35 bps.

Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and Citigroup Global Markets Inc. were the bookrunners.

The company plans to use the proceeds for general corporate purposes.

Moody's is a New York City-based credit ratings and research agency.

Alabama Power sells notes

Alabama Power placed $550 million of 2.45% five-year series 2017A senior notes on Monday at 99.918 to yield 2.467%, according to an FWP filing with the SEC.

The notes due March 30, 2022 (A1/A-/A+) priced at a spread of Treasuries plus 60 bps.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Mizuho Securities USA Inc. and MUFG were the bookrunners.

Proceeds will be used to repay all or a portion of the company’s short-term debt and for general corporate purposes.

The electric subsidiary of Southern Co. is based in Birmingham, Ala.

RPM brings two tranches

RPM International priced $450 million of senior notes (Baa3/BBB/BBB) in two parts on Monday, according to an FWP filing with the SEC.

The company sold $400 million of 3.75% notes due 2027 at 99.858 to yield 3.767% and a spread of Treasuries plus 140 bps.

The offering included a $50 million add-on to the company’s 5.25% notes due June 1, 2045 that priced at 106.232 to yield 4.839%. The bonds were sold with a Treasuries plus 185 bps spread.

The company originally sold $250 million of the 5.25% notes on May 26, 2015 at 99.401 to yield 5.29%, or Treasuries plus 237.5 bps. The total outstanding is $300 million.

BofA Merrill Lynch and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay some of the borrowings under the company’s revolving credit facility and for general corporate purposes.

RPM is a Medina, Ohio-based company that manufactures and markets specialty chemical products for industrial and consumer markets.

ConEd sells debentures

Consolidated Edison priced a $400 million offering of 2% three-year series 2017A debentures on Monday at a spread of 55 bps over Treasuries, according to an FWP filing with the SEC.

The debentures due March 15, 2020 (A3/BBB+/BBB+) priced at 99.967 to yield 2.011%.

BNY Mellon Capital Markets LLC, Mizuho Securities USA Inc., MUFG, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., TD Securities (USA) LLC and CIBC World Markets Corp. were the bookrunners.

Proceeds will be used for general corporate purposes, including short-term debt repayment and to prepay the $400 million loan under a June 2016 credit agreement. Available cash and the proceeds from a sale of additional short-term debt will also fund the prepayment.

Consolidated Edison is a New York-based holding company for Consolidated Edison of New York, Inc.

Textron sells $350 million

Textron sold $350 million of 3.65% 10-year senior notes on Monday with a spread of 130 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa3/BBB/) priced at 99.874 to yield 3.665%.

Goldman Sachs & Co., BofA Merrill Lynch, SMBC Nikko Securities America, Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The multi-industry company has units including aircraft, defense and finance. It is based in Providence, R.I.

Westar Energy prices

Westar Energy priced $300 million of 3.1% 10-year first mortgage bonds on Monday at 99.612 to yield 3.145%, according to an FWP filing with the SEC.

The notes due April 1, 2027 (A2/A/) priced at a spread of 78 bps over Treasuries.

Barclays, BNY Mellon Capital Markets LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay debt incurred under Westar's commercial paper program and to finance its ongoing capital program.

Westar is a Topeka, Kan.-based electric utility.

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