UBS, Caterpillar, Kilroy, WGL, Healthcare Trust, Northern States price; AXIS offers notes

By Cristal Cody

Tupelo, Miss., Nov. 27 – Primary action remained strong in the high-grade bond market on Monday in the final week of November.

Issuers including UBS AG, London Branch, Caterpillar Financial Services Corp., Kilroy Realty, LP, WGL Holdings, Inc., Healthcare Realty Trust Inc. and Northern States Power Co. tapped the primary market during the session.

About $30 billion of issuance is expected by market sources for the week.

Also on Monday, AXIS Specialty Finance plc launched an offering of up to $350 million of U.S. dollar-denominated 10-year senior notes.

The Markit CDX North American Investment Grade 29 index ended about 1 basis point softer at a spread of 53 bps.

UBS prices $4.3 billion

UBS, London Branch priced $4.3 billion of senior notes (A1/A+/) in three tranches to strong demand on Monday, according to a market source.

UBS sold $1.5 billion of floating-rate notes due May 28, 2019 at par to yield Libor plus 32 bps. The issue had a final book size of $2.2 billion.

The company priced $1 billion of three-year floating-rate notes at par to yield Libor plus 48 bps. The three-year floaters had a $2.3 billion final book.

The $1.8 billion tranche of 2.45% three-year fixed-rate notes priced at a spread of Treasuries plus 65 bps. The notes priced at 99.908 to yield 2.482%. The 2.45% notes had a final book size of $3.75 billion.

UBS Securities LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

UBS, London Branch is a London-based financial services company and subsidiary of UBS AG.

Caterpillar sells three tranches

Caterpillar Financial Services priced $1.5 billion of series I medium-term global notes (A3/BBB+/A) in three tranches on Monday, according to a market source and FWP filings with the Securities and Exchange Commission.

Caterpillar priced $300 million of two-year floating-rate notes at par to yield Libor plus 13 bps.

The company sold $600 million of 2% notes due Nov. 29, 2019 at 99.904 to yield 2.049%, or a spread of Treasuries plus 30 bps.

The $600 million tranche of 2.55% five-year notes priced at 99.916 to yield 2.568%. The notes priced at a Treasuries plus 52 bps spread.

Citigroup Global Markets Inc., BofA Merrill Lynch and MUFG were the bookrunners.

Nashville, Tenn.-based Caterpillar Financial Services is a financing arm of Caterpillar Inc.

Kilroy Realty prices

Kilroy Realty priced $425 million of 3.45% senior notes due Dec. 15, 2024 on Monday at a spread of 125 bps over Treasuries, according to an FWP filed with the SEC.

The notes (Baa2/BBB/) priced at 99.87 to yield 3.471%.

J.P. Morgan Securities LLC, U.S. Bancorp Investments, Inc., Barclays, BofA Merrill Lynch and Wells Fargo Securities LLC were the bookrunners.

The notes are guaranteed by general partner Kilroy Realty Corp.

Proceeds will be used to redeem all $325 million of outstanding 4.8% senior notes due 2018 and for general corporate purposes.

Kilroy Realty is a Los Angeles-based real estate investment trust with office and mixed-use submarkets along the West Coast.

WGL sells floaters

WGL Holdings priced $300 million of floating-rate senior notes due Nov. 29, 2019 (A3/A-/A-) on Monday at par to yield Libor plus 40 bps, according to an FWP filed with the SEC.

TD Securities (USA) LLC and Wells Fargo Securities were the bookrunners.

Proceeds will be used for general corporate purposes, including repayment of commercial paper, making an equity contribution to Washington Gas and funding capital expenditures. As of Nov. 17, the company had about $635 million of outstanding commercial paper.

WGL Holdings is a Washington, D.C.-based natural gas and energy products and services provider.

Healthcare Realty sells notes

Healthcare Realty Trust sold $300 million of 3.625% senior notes due Jan. 15, 2028 (Baa2/BBB/BBB) on Monday at 99.153 to yield 3.726%, or a spread of 140 bps over Treasuries, according to a market source and an FWP filing with the SEC.

U.S. Bancorp Investments, Inc., Wells Fargo Securities and BofA Merrill Lynch were the bookrunners.

Proceeds will be used to redeem the company’s senior notes due 2021. Pending such use, the proceeds will be applied to outstanding debt under the company’s credit facility due 2020 and may be used for other general corporate purposes.

Healthcare Realty is a Nashville-based real estate investment trust that owns, leases, manages and develops properties associated with outpatient healthcare services in the United States.

Northern States brings bonds

Northern States Power priced $100 million of 3.75% 30-year first mortgage bonds (Aa3/A/A+) at 99.732 to yield 3.765%, or a spread of Treasuries plus 100 bps, according to an FWP filing with the SEC on Monday.

Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to repay short-term debt and for general corporate purposes.

The electric and natural gas utility is based in Eau Claire, Wis.

AXIS launches notes

AXIS Capital Holdings Ltd. announced on Monday that subsidiary AXIS Specialty Finance (/A+/A.M. Best: A+) launched an offering of up to $350 million of U.S. dollar-denominated 10-year senior notes.

Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. are the bookrunners.

The notes are fully and unconditionally guaranteed by AXIS Capital, according to the news release.

Proceeds will be used to repay or redeem the company’s 2.65% senior notes due 2019 and for general corporate purposes.

The company plans to list the notes on the Bermuda Stock Exchange.

AXIS is a Pembroke, Bermuda-based provider of specialty lines insurance and treaty reinsurance with shareholders’ equity.

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