Reckitt Benckiser, Westpac Banking, Owens Corning, Suntory price; Kroger notes soften

By Cristal Cody

Tupelo, Miss., June 21 – High-grade pricing action picked up on Wednesday, led by Reckitt Benckiser Treasury Services plc’s $7.75 billion four-tranche offering of senior notes.

Westpac Banking Corp. also tapped the primary market with $1.5 billion of five-year fixed- and floating-rate notes.

Owens Corning came to market with $600 million of 30-year senior notes.

Also, Suntory Holdings Ltd. priced $600 million of five-year senior notes.

The Canadian investment-grade bond markets have been fairly quiet but issuance is expected to pick up later in the summer, according to a syndicate source.

“The pipeline is pretty bare,” the source said. “Banks are normally quite busy in June but they haven’t been busy. Spreads are approaching the lows we saw back in 2014.”

About C$3.9 billion of corporate bonds have priced month to date, according to the market source. About C$8 billion of supply is forecast in July.

The Markit CDX North American Investment Grade index eased nearly 1 basis point to close at a spread of 63 bps.

In secondary trading, Kroger Co.’s senior notes (Baa1/BBB/BBB) softened about 1 bp to 3 bps on Wednesday, according to a market source.

The 2.65% notes due Oct. 15, 2026 eased 1 bp to 137 bps bid. Kroger sold $750 million of the notes on Sept. 26, 2016 at a spread of 110 bps over Treasuries.

Kroger’s 4.45% notes due Feb. 1, 2047 traded 3 bps wider at 183 bps bid. The Cincinnati-based grocery retailer sold $1 billion of the bonds on Jan. 17 at a spread of 150 bps over Treasuries.

Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) were unchanged at 105 bps bid on Wednesday.

The notes came in about 85 bps on Friday to 92 bps bid after Amazon.com, Inc. announced it will purchase the natural and organic foods grocer for $13.7 billion in cash.

Austin, Texas-based Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at a Treasuries plus 300 bps spread.

Reckitt prices $7.75 billion

Reckitt Benckiser Treasury Services (A3/A-/) priced $7.75 billion of senior notes in four tranches on Wednesday, according to a market source.

The company sold $750 million of five-year floating-rate notes at Libor plus 56 bps.

It also priced $2.5 billion of 2.375% five-year fixed-rate notes at a spread of Treasuries plus 62 bps.

Reckitt sold $2 billion of 2.75% seven-year notes at a Treasuries plus 77 bps spread.

The company placed $2.5 billion of 3% 10-year notes with a spread of 87 bps over Treasuries.

BofA Merrill Lynch, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. were the bookrunners.

Reckitt Benckiser is a financing arm of Slough, England-based Reckitt Benckiser Group plc, a consumer goods company that owns brands including Clearasil, Scholl, Lysol, Woolite and French’s mustard.

Westpac sells $1.5 billion

Westpac Banking sold $1.5 billion of dollar-denominated notes (Aa3/AA-/AA-) in two tranches on Wednesday, according to a market source.

The bank priced $500 million of five-year floating-rate notes at Libor plus 71 bps.

It sold $1 billion of 2.5% five-year fixed-rate notes at a spread of Treasuries plus 77 bps.

BofA Merrill Lynch, J.P. Morgan Securities and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The bank is based in Sydney, Australia.

Owens Corning sells notes

Owens Corning priced $600 million of 4.3% 30-year senior notes with a spread of 162.5 bps over Treasuries on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The split-rated notes (Ba1/BBB/BBB-) priced at 99.064 to yield 4.356%.

BofA Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities and Wells Fargo Securities were the bookrunners.

Of the proceeds, $250 million will be used to fund a portion of the purchase price of the company’s planned acquisition of Pittsburgh Corning and the remainder will be used to repurchase all of the company’s 9% senior notes due 2019, to repurchase a portion of its 7% senior notes due 2036 and for general corporate purposes.

Owens Corning is a Toledo, Ohio-based maker of composite building materials.

Suntory raises $600 million

Suntory Holdings (Baa2/BBB/) priced $600 million of 2.55% five-year senior notes at a spread of Treasuries plus 82 bps in a Rule 144A and Regulation S offering on Wednesday, a market source said.

The notes priced on the tight side of guidance that was announced in the Treasuries plus 85 bps area, plus or minus 3 bps.

Citigroup Global Markets, J.P. Morgan Securities and Morgan Stanley & Co. LLC were the bookrunners.

Suntory is an alcoholic beverage brewing and distillery company based in Tokyo.

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