Darden, McKesson, Lincoln, Kirby price; Sweden prints better than talk; BNG sells notes

By Cristal Cody

Tupelo, Miss., Feb. 7 – Several investment-grade issuers tapped the primary market on Wednesday after light supply came in the first two days of the week.

Lincoln National Corp. priced a $1.1 billion three-tranche offering of senior notes.

McKesson Corp. sold $600 million of 10-year notes.

Kirby Corp. priced $500 million of 10-year senior notes.

Darden Restaurants, Inc. brought $300 million of 30-year senior notes to the primary market.

In SSA issuance, Sweden sold $3 billion of three-year notes tighter than talk in an offering that attracted more than 40 bidders.

“Despite volatile markets, demand from investors was significant,” Anna Sjulander, head of funding at the Swedish National Debt Office, said in a news release.

Also on Wednesday, Bank Nederlandse Gemeenten NV sold $1.5 billion of three-year notes on top of guidance.

Elsewhere, Canadian high-grade deal action has remained quiet so far in the week on volatility in the U.S. stock and bond markets, but near-term supply is expected, a syndicate source said.

“It normally takes a day or two more before Canada responds to stable markets,” the source said. “There’s a very good chance of a deal tomorrow, but it may be Monday or Friday before it wakes up.”

In U.S. supply expected on Thursday, the Federal Home Loan Bank System plans to price two-year global notes.

Deal action was thin on Monday and Tuesday with heavy volatility in stocks and Treasuries.

Credit spreads widened to start the week before improving late Tuesday but softened again on Wednesday.

The Markit CDX North American Investment Grade 29 index closed about 1.5 basis points wider at a spread of 54.5 bps.

Lincoln prices $1.1 billion

Lincoln National sold $1.1 billion of senior notes (Baa1/A-/BBB+) in three tranches, including a reopening, on Wednesday, according to a market source.

The company placed $500 million of new 3.8% 10-year notes at a spread of Treasuries plus 98 bps.

Lincoln National priced $450 million of new 4.35% 30-year bonds at a Treasuries plus 123 bps spread.

In the add-on, Lincoln National sold $150 million of 4% notes due Sept. 1, 2023 at a spread of 75 bps over Treasuries.

The company originally priced $350 million of the 4% notes on Aug. 13, 2013 at 99.19 to yield 4.099%, or a spread of 138 bps over Treasuries. The total outstanding now is $500 million.

All the tranches priced on the tight side of guidance.

Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Barclays, Citizens Capital Markets, Deutsche Bank Securities Inc., PNC Capital Markets LLC and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used for the company’s planned acquisition of Liberty Life Assurance Co. of Boston.

Lincoln National is a Radnor, Pa.-based holding company for insurance and retirement subsidiaries.

McKesson upsizes

McKesson priced $600 million of 3.95% 10-year notes (Baa2/BBB+/BBB+) on Wednesday at a spread of Treasuries plus 112.5 bps, according to a market source.

The deal was upsized from $500 million and priced on the tight side of guidance in the Treasuries plus 130 bps to 135 bps area.

Goldman Sachs, BofA Merrill Lynch, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc. and Wells Fargo Securities LLC were the bookrunners.

The company also priced €750 million of euro-denominated notes in two tranches on Wednesday.

Proceeds from both issues will be used to finance the tender offers for up to $1.1 billion of the company’s 7.5% notes due 2019, 4.75% notes due 2021, 7.65% debentures due 2027, 6% notes due 2041 and 4.883% notes due 2044 and to fund the redemption of the 7.5% notes, if applicable, and for working capital and general corporate purposes.

McKesson is a San Francisco-based health-care services and information technology company.

Kirby sells $500 million

Kirby priced $500 million of 4.2% 10-year senior notes (Baa2/BBB+/) on Wednesday at a spread of 137.5 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.859 to yield 4.217%.

Morgan Stanley & Co. LLC and Wells Fargo Securities were the bookrunners.

Proceeds will be used to fund Kirby’s acquisition of Higman Marine, Inc. and for general corporate purposes, including working capital, debt repayment and other acquisitions.

Kirby is a Houston-based operator of inland tank barges and towing vessels to transport petrochemical products.

Darden brings notes

Darden Restaurants sold $300 million of 4.55% 30-year senior notes (Baa2/BBB/BBB) on Wednesday at 99.952 to yield 4.553%, according to an FWP filing with the SEC.

The notes priced with a spread of 145 bps over Treasuries.

BofA Merrill Lynch, Goldman Sachs, Wells Fargo Securities, Fifth Third Securities Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments were the bookrunners.

Proceeds will be used to fund a tender offer and consent solicitation for the company’s 6% senior notes due 2035 and 6.8% senior notes due 2037 and for general corporate purposes.

Darden Restaurants is an Orlando, Fla.-based casual dining operator.

Sweden prices $3 billion

Sweden (Aaa/AAA/AAA) priced $3 billion of 2.375% notes due Feb. 15, 2021 on Wednesday tighter than talk at a spread of mid-swaps minus 1 bp, or Treasuries plus 16.85 bps, according to a news release.

The notes were initially talked to price at the mid-swaps flat area.

The issue came at 99.741 to yield 2.465%.

Citigroup Global Markets Ltd., Barclays and HSBC Bank plc were the bookrunners.

More than 40 investors took part in the deal with bids totaling $4.4 billion.

Proceeds will be used to refinance maturing on-lending to the Riksbank, the central bank of Sweden.

Sweden’s National Debt Office said in 2018 it plans to issue bonds in foreign currency equivalent to SEK 102 billion for funding that refers to refinancing of bonds previously raised on behalf of the Riksbank. After Wednesday's transaction, a little more than SEK 14 billion remains, according to the release.

Nederlandse sells $1.5 billion

Bank Nederlandse Gemeenten (Aaa/AAA/AA+) priced $1.5 billion of 2.5% three-year notes on top of guidance Wednesday at a spread of mid-swaps plus 10 bps, or Treasuries plus 27.9 bps, according to a market source.

Deutsche Bank Securities, Goldman Sachs, NatWest Markets and RBC Capital Markets, LLC were the lead managers for the Rule 144A and Regulation S transaction.

The banking services company is based in The Hague.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.