Royal Bank of Canada, Lowe's, BB&T among issuers to pack session with deals; bonds mixed

By Cristal Cody

Tupelo, Miss., Sept. 4 - New investment-grade issuance continued to "ramp up" on Wednesday with more than $6 billion of deals priced, a market source said.

Royal Bank of Canada raised $2 billion in two tranches of notes, while BB&T Corp. sold $750 million of three-year notes.

Other issuers that tapped the market on Wednesday included Lowe's Cos., Inc., Nabors Industries, Inc., CME Group Inc. and San Diego Gas & Electric Co.

The Markit CDX Series 20 North American Investment Grade index ended flat at a spread of 83 bps.

In the secondary market, Lowe's two new tranches traded 1 bp to 2 bps wider from where they were issued, according to a trader.

BB&T's notes and CME Group's notes both tightened 2 bps going out.

RBC prices $2 billion

Royal Bank of Canada raised $2 billion in two tranches of series F fixed-rate and floating-rate senior medium-term notes (Aa3/AA-/AA) on Wednesday, according to FWP filings with the Securities and Exchange Commission.

Royal Bank of Canada sold $1.2 billion of floating-rate notes due Sept. 9, 2016 at par to yield 46 bps over three-month Libor.

The $800 million tranche of 1.45% fixed-rate notes due Sept. 9, 2016 priced at 99.877 to yield 1.492%, or a spread of Treasuries plus 63 bps.

RBC Capital Markets, LLC and JPMorgan Securities LLC were the bookrunners.

The financial services company is based in Toronto.

Lowe's brings $1 billion

Lowe's sold $1 billion in two tranches of notes (A3/A-/) on Wednesday, according to an informed source.

Lowe's priced $500 million of 3.875% notes due Sept. 15, 2023 at 99.401 to yield 3.948%, or a spread of 105 bps over Treasuries.

In the secondary market, the notes widened to 107 bps bid, 103 bps offered, a trader said.

Lowe's also sold $500 million of 5% bonds due Sept. 15, 2043 at 99.002 to yield 5.065%, or a spread of 123 bps over Treasuries.

Going out, the 30-year bonds traded 1 bp wider at 124 bps bid, 121 bps offered.

Joint bookrunners were BofA Merrill Lynch, J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc.

Proceeds will be used for general corporate purposes.

The home improvement company is based in Mooresville, N.C.

BB&T sells $750 million

BB&T sold $750 million of 1.45% three-year notes at 99.964 to yield 1.462% on Wednesday, according to an informed source.

The notes due Oct. 3, 2016 (A1/A/A+) priced at a spread of Treasuries plus 60 bps.

BB&T Capital Markets, Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC were the bookrunners.

In secondary trading, the notes due 2016 firmed 2 bps to 58 bps bid, 56 bps offered, according to a trader.

The financial services company is based in Winston-Salem, N.C.

CME prices $750 million

CME sold $750 million of 5.3% 30-year bonds at 99.82 to yield a spread of 148 bps over Treasuries on Wednesday, according to a syndicate source.

The bonds (Aa3/AA-/) are due Sept. 15, 2043.

The syndicate included Barclays; BofA Merrill Lynch; Citigroup Global Markets Inc.; Wells Fargo Securities, LLC; BMO Capital Markets Corp.; Lloyds Securities Inc.; Mitsubishi UFJ Securities (USA) Inc.; and UBS Investment Bank.

CME Group, a Chicago-based holding company for derivatives marketplaces, plans to use the proceeds with cash on hand to retire at maturity $750 million outstanding of 5.75% notes due February 2014 and for general corporate purposes.

In the secondary market, the notes traded better at 146 bps bid, 144 bps offered as the session closed, a trader said.

Nabors sells two tranches

Nabors Industries priced $700 million in two tranches of senior notes (Baa2/BBB/BBB) in a Rule 144A and Regulation S offering on Wednesday, according to a syndicate source.

In the first tranche, Nabors priced $350 million of 2.35% notes due Sept. 15, 2016 at 99.942 to yield 2.37%, or a spread of 150 bps over Treasuries.

Nabors also sold $350 million of 5.1% notes due Sept. 15, 2023 at 99.635 to yield 5.147%, or a spread of 225 bps plus Treasuries.

The notes will be fully and unconditionally guaranteed by Nabors Industries Ltd.

Mitsubishi UFJ Securities (USA) Inc., Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC were the lead managers.

The proceeds, together with cash on hand and borrowings under the company's revolving credit facility, if necessary, will be used to purchase any of the $1.125 billion outstanding of 9.25% senior notes due 2019 that are validly tendered in the company's tender offer announced on Wednesday.

The oil, natural gas and geothermal drilling contractor is based in Hamilton, Bermuda.

San Diego Gas sells $400 million

San Diego Gas & Electric sold $400 million of 3.6% 10-year first mortgage bonds at 99.984 to yield 3.602% on Wednesday, according to a syndicate source and a FWP filing with the Securities and Exchange Commission.

The series NNN first mortgage bonds due Sept 1, 2023 (Aa3/A+/AA-) priced at a spread of Treasuries plus 70 bps.

CastleOak Securities, LP, J.P. Morgan Securities LLC, RBS Securities Inc., BNP Paribas Securities Corp. and US Bancorp Investments, Inc. were the joint bookrunners.

Proceeds will be used to redeem all $60 million outstanding of the 5.85% series 1993A pollution control revenue bonds due 2021; $115.47 million outstanding of the 5.9% series 1996A bonds due 2014; $81.5 million outstanding of the company's cumulative preferred stock and preference stock and for general working capital purposes.

The public utility serves San Diego and southern Orange counties in California.

Unilever details $750 million deal

Unilever Capital Corp. sold $750 million of 2.2% senior notes due March 6, 2019 at 98.853 to yield 2.424%, according to a FWP filing with the Securities and Exchange Commission on Wednesday.

The notes (A1//A+/) priced with a spread of Treasuries plus 75 bps.

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

The notes will be guaranteed by Unilever NV, Unilever plc and Unilever United States Inc.

Proceeds will be used for general corporate purposes.

The U.S. office of the Dutch and English consumer goods company is based in Englewood Cliffs, N.J.

Bank, brokerage CDS easier

Investment-grade bank and brokerage CDS costs were unchanged to higher on Wednesday, a market source.

Bank of America Corp.'s CDS costs were flat at 110 bps bid, 114 bps offered. Citigroup Inc.'s CDS costs ended unchanged at 101 bps bid, 105 bps offered. JPMorgan Chase & Co.'s CDS costs rose 1 bp to 88 bps bid, 92 bps offered. Wells Fargo & Co.'s CDS costs eased 1 bp to 64 bps bid, 68 bps offered.

Merrill Lynch's CDS costs rose 1 bp to 104 bps bid, 111 bps offered. Morgan Stanley's CDS costs eased 1 bp to 140 bps bid, 145 bps offered. Goldman Sachs Group, Inc.'s CDS costs closed unchanged at 130 bps bid, 135 bps offered.

Paul Deckelman contributed to this review

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