High-grade supply heavy; HSBC, GM, John Deere, Equinor price; Cigna, Carlyle eye deals

By Cristal Cody

Tupelo, Miss., Sept. 5 – Investment-grade issuers posted a strong showing in Wednesday’s session.

Supply included $5.25 billion of senior notes in three tranches from HSBC Holdings plc.

General Motors Co. also priced $2.1 billion of senior notes in three tranches.

Other issuers during the session included John Deere Capital Corp., Equinor ASA, Willis North America Inc., Public Service Electric and Gas Co., AEP Transmission Co., Northern States Power Co.

Also, the European Investment Bank priced $3 billion of three-year global notes.

More than $12 billion of high-grade bonds were sold on Tuesday following the long holiday weekend.

Market sources expect about $45 billion to $55 billion of deal volume for the week.

Meanwhile the Markit CDX North American Investment Grade 30 index firmed about 1 basis point to a spread of 60 bps.

Cigna, Carlyle hold calls

In other market activity, Cigna Corp. (Baa1/A/BBB-) began holding fixed-income investor calls on Tuesday for a benchmark-sized multiple-tranche dollar-denominated Rule 144A bond offering, a source said.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the arrangers.

Halfmoon Parent, Inc., currently a subsidiary of Cigna, will become the parent of Cigna following its $67 billion cash, stock and debt acquisition of Express Scripts Holding Co.

Halfmoon Parent (Baa1/A-/BBB) is expected to issue about $23.5 billion of senior notes for the deal.

Proceeds from the offering will be used to fund the cash portion of the merger, which is expected to close by the end of the year.

According to an 8-K filing with the Securities and Exchange Commission on Tuesday, Cigna officials expect to hold “meetings with investors over the next several days.”

Cigna is a Bloomfield, Conn.-based health service company.

Also on Wednesday, Carlyle Group (/BBB+/BBB+) began a two-day session of fixed-income investor calls for a Rule 144A and Regulation S offering of senior notes, according to a market source.

J.P. Morgan Securities and Morgan Stanley are the arrangers.

The Carlyle Group is a Washington, D.C.-based investment firm.

HSBC raises $5.25 billion

HSBC Holdings sold $5.25 billion of senior notes (A2/A/AA-) in three tranches on Wednesday, according to FWP filings with the SEC.

The company priced $2 billion of three-year floating-rate notes at par to yield Libor plus 65 bps.

HSBC also sold $750 million of eight-year floating-rate notes at par to yield Libor plus 138 bps.

In addition, the company priced $2.5 billion of 4.292% fixed-to-floating-rate notes due Sept. 12, 2026 at par to yield a spread of 145 bps over Treasuries. The notes will reset on Sept. 12, 2025 to a floating rate of Libor plus 134.77 bps.

HSBC Securities (USA) Inc. was the bookrunner.

The banking and financial services group is based in London.

GM prices $2.1 billion

General Motors priced $2.1 billion of senior notes (Baa3/BBB/BBB) in three tranches on Wednesday, according to a market source and an FWP filing with the SEC.

The company sold $450 million of three-year floating-rate notes at par to yield Libor plus 90 bps.

A $750 million tranche of 5% 10-year fixed-rate notes priced at 99.965 to yield 5.004%, or a spread of 210 bps over Treasuries.

General Motors also sold $900 million of 5.95% notes due April 1, 2049 at 99.966 to yield 5.952%. The bonds priced with a spread of Treasuries plus 287.5 bps.

The notes printed better than initial price guidance.

Barclays, Deutsche Bank Securities Inc. and SG Americas Securities LLC were the bookrunners.

General Motors is a Detroit-based automaker.

John Deere taps primary

John Deere Capital priced $1.3 billion of senior medium-term notes (A2/A/A) in three parts on Wednesday, according to FWP filings with the SEC.

The company sold $400 million of three-year floating-rate notes at par to yield Libor plus 26 bps.

A $600 million tranche of 3.125% three-year fixed-rate notes priced at 99.969 to yield 3.136% and a spread of 42 bps over Treasuries.

The company also sold a $300 million tap of its 3.45% notes due March 13, 2025 at 99.746 with a 3.494% yield, or a Treasuries plus 65 bps spread. The company previously issued $600 million of the notes on March 13 at 99.969 to yield 3.455% and a spread of 67 bps over Treasuries. The total outstanding is now $900 million.

Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and HSBC Securities were the bookrunners.

John Deere Capital is a financing arm of Moline, Ill.-based farm equipment supplier Deere & Co.

Equinor brings $1 billion

Equinor (Aa2/AA-/) priced $1 billion of 3.625% 10-year guaranteed notes on Wednesday at a spread of Treasuries plus 75 bps, according to an FWP filing with the SEC.

The notes priced at 99.834 to yield 3.645%.

Goldman Sachs, J.P. Morgan Securities and BofA Merrill Lynch were the bookrunners.

The notes are guaranteed by subsidiary Equinor Energy AS.

Equinor ASA, formerly known as Statoil ASA, is an oil, gas, wind and solar energy company based in Stavanger, Norway.

Willis sells two tranches

Willis North America priced a $1 billion two-part offering of guaranteed senior notes (Baa3/BBB/BBB) on Wednesday, according to an FWP filing with the SEC.

The $600 million tranche of 4.5% 10-year notes priced at 99.967 to yield 4.504%, or a spread of Treasuries plus 160 bps.

Willis sold $400 million of 5.05% 30-year notes at 99.647 to yield 5.073%. The bonds priced with a Treasuries plus 200 bps spread.

Barclays, BofA Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities, BofA Merrill Lynch, HSBC Bank plc, MUFG, PNC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities were the bookrunners.

The company is a subsidiary of Willis Towers Watson plc, a London-based global risk adviser and insurance and reinsurance broker.

PSE&G prices

Public Service Electric and Gas priced $650 million of secured medium-term notes (Aa3/AA/A+) in two tranches on Wednesday, according to a market source and FWP filings with the SEC.

The company sold $325 million of 3.25% five-year notes at 99.823 and a spread of 52 bps over Treasuries.

The $325 million tranche of 3.65% 10-year notes priced at 99.984. The notes priced with a Treasuries plus 75 bps spread.

Both tranches priced on the tight side of guidance.

CIBC World Markets Corp., MUFG, Scotia Capital (USA) Inc., Wells Fargo Securities, Credit Suisse Securities (USA) LLC and BofA Merrill Lynch were the bookrunners.

PSE&G is a Newark, N.J.-based electric and gas utility.

AEP brings 30-year notes

AEP Transmission sold $325 million of 4.25% 30-year senior notes (A2/A-/A-) on Wednesday at a spread of Treasuries plus 118 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.982 to yield 4.251%.

Goldman Sachs, Mizuho Securities USA LLC, MUFG and SunTrust Robinson Humphrey were the bookrunners.

Columbus, Ohio-based AEP Transmission is an electric utility and a division of American Electric Power Co., Inc.

Northern States sells notes

Northern States Power sold $200 million of 4.2% 30-year first mortgage bonds (Aa3/A/A+) on Wednesday at 99.629 to yield 4.222%, or a spread of Treasuries plus 115 bps, according to an FWP filing with the SEC.

Mizuho Securities and U.S. Bancorp Investments Inc. were the bookrunners.

The electric and natural gas utility is based in Minneapolis.

EIB prices $3 billion

The European Investment Bank (Aaa/AAA/AAA) priced $3 billion of 2.875% global notes due Dec. 12, 2021 on Wednesday at a spread of mid-swaps minus 1 bp, or Treasuries plus 15.85 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 1 bp area with guidance later tightened to the mid-swaps flat area.

Barclays, Citigroup Global Markets and RBC Capital Markets, LLC were the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

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