Microsoft, Synchrony, Consumers Energy, Tanger price; Microsoft, Procter & Gamble bonds ease

By Cristal Cody

Eureka Springs, Ark., Aug. 1 – August high-grade deal action kicked off with a bang on Monday with several issuers in the primary market, including Microsoft Corp.

Microsoft priced $19.75 billion of notes in seven parts to in part help fund its acquisition of LinkedIn Corp.

Also in the primary market on Monday, Synchrony Financial brought $500 million of 10-year senior notes.

Consumers Energy Co. priced $450 million of 30-year first mortgage bonds.

Tanger Properties LP sold $250 million of 10-year senior notes.

About $25 billion to $30 billion of volume is forecast for the week.

Investment-grade bonds were mostly weaker in the secondary market on Monday.

Microsoft’s existing bonds priced in a $13 billion offering last year softened over the day.

Procter & Gamble Co.’s 2.7% notes due 2026 traded 3 basis points weaker on Monday in front of the release of the company’s quarterly earnings before the market opens on Tuesday.

Verizon Communications Inc.’s 2.625% senior notes due 2026 eased about 2 bps to 3 bps weaker earlier in the day.

Teva Pharmaceutical Finance Netherlands III BV’s 3.15% senior notes due 2026 traded about 2 bps weaker early Monday.

The Markit CDX North American Investment Grade index closed the day more than 2 bps wider at a spread of 75 bps.

Microsoft prices $19.75 billion

Microsoft priced $19.75 billion of senior notes (Aaa/AAA/) in seven parts on Monday, according to a company release.

The company sold $2.5 billion of 1.1% three-year notes.

Microsoft priced $2.75 billion of 1.55% five-year notes.

The company brought $1.5 billion of 2% seven-year notes.

The company sold $4 billion of 2.4% 10-year notes.

Microsoft priced $2.25 billion of 3.45% 20-year notes.

The company printed $4.5 billion of 3.7% 30-year notes.

In the final tranche, Microsoft sold $2.25 billion of 3.95% 40-year bonds.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities LLC, Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, which may include acquisitions, including the previously announced acquisition of LinkedIn, funding for working capital, capital expenditures, capital stock repurchases and debt repayment.

The computer software company is based in Redmond, Wash.

Morgan Stanley sells $1 billion

Morgan Stanley detailed a $1 billion offering of 4% 30-year global medium-term notes (A3/BBB+/A) that priced on Friday at par, according to a 424B2 filing with the Securities and Exchange Commission.

The series H notes are due Aug. 13, 2046.

E. Sun Commercial Bank, Ltd. and Cathay United Bank Co., Ltd. were the bookrunners.

Morgan Stanley plans to apply to have the notes listed on the Taipei Exchange.

The financial services company is based in New York City.

Synchrony Financial prices

Synchrony Financial sold $500 million of 3.7% 10-year senior notes on Monday at 99.619 to yield 3.746%, according to an FWP filing with the Securities and Exchange Commission.

The notes priced with a spread of Treasuries plus 225 bps.

BofA Merrill Lynch, Mizuho Securities USA Inc. and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes.

Synchrony is a consumer financial services company based in Stamford, Conn.

Consumers Energy sells bonds

Consumers Energy priced $450 million of 30-year first mortgage bonds on Monday at 99.222 to yield 3.291%, according to an FWP filing with the SEC.

The bonds (A1/A/A+) priced with a spread of 105 bps plus Treasuries.

Citigroup, BofA Merrill Lynch, Mizuho, MUFG, Scotia Capital (USA) Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. were the lead managers.

The company intends to use the proceeds to pay off at maturity $173 million outstanding of 5.5% first mortgage bonds due Aug. 15, 2016 and for general corporate purposes.

Consumers Energy is an electric and gas utility based in Jackson, Miss.

Tanger Properties in primary

Tanger Properties (Baa1/BBB+/) sold $250 million of 3.125% 10-year senior notes at 99.605 to yield 3.171% on Monday, according to an 8-K filing with the SEC from operating partner Tanger Factory Outlet Centers, Inc.

BofA Merrill Lynch and Wells Fargo were the bookrunners.

Proceeds from the deal will be used to repay a $62 million floating-rate mortgage loan, to repay borrowings under the company’s unsecured lines of credit and for general corporate purposes.

The outlet center real estate investment trust is based in Greensboro, N.C.

Microsoft softens

Microsoft’s existing 3.125% notes due 2025 eased 1 bp to 82 bps bid, according to a market source on Monday.

The company sold $3 billion of the notes on Oct. 29, 2015 at a spread of Treasuries plus 95 bps.

Microsoft’s 4.45% notes due 2045 eased 1 bp to 146 bps bid in the secondary market.

The bonds priced in a $3 billion offering at Treasuries plus 150 bps in the Oct. 29, 2015 sale.

Microsoft's 4.75% notes due 2055 traded 2 bps softer going out at 172 bps bid.

The $1 billion tranche sold at Treasuries plus 180 bps in the Oct. 29, 2015 offering.

Procter & Gamble eases

Procter & Gamble’s 2.7% notes due 2026 eased 3 bps in late afternoon secondary trading to 51 bps bid, a market source said.

The company sold $600 million of the notes (Aa3/AA-) on Jan. 28, 2016 at 75 bps over Treasuries.

The consumer products company is based in Cincinnati.

Verizon widens

Verizon’s 2.625% notes due 2026 traded about 2 bps to 3 bps weaker at 117 bps offered earlier in the secondary market on Monday, a source said.

The notes headed out on Friday at 116 bps bid, 114 bps offered.

Verizon sold $2.25 billion of the notes (Baa1//A-) on Wednesday at Treasuries plus 115 bps.

The telecommunications company is based in New York City.

Teva weakens

Teva’s 3.15% notes due 2026 were seen about 2 bps weaker in early secondary trading at 143 bps offered, according to a market source.

The company sold $3.5 billion of the notes (Baa2/BBB/) on July 18 at a spread of 160 bps over Treasuries.

The pharmaceutical company is based in Jerusalem.

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