California Edison, Travelers, Regency Centers, EBRD among issuers; credit spreads ease

By Cristal Cody

Tupelo, Miss., Feb. 28 – Several high-grade issuers tapped the primary market on Wednesday for a third consecutive session of strong supply.

Issuers including Southern California Edison Co., Travelers Cos., Inc., Regency Centers, LP, European Bank for Reconstruction and Development and Municipality Finance PLC priced new bonds.

Also, Mizuho Financial Group, Inc., Bank of America Corp., Ford Motor Credit Co. LLC and Occidental Petroleum Corp. were planning new issues on Wednesday.

Goldman Sachs Group Inc. tapped the Canadian high-grade primary market on Wednesday in its first maple bond offering of the year. Goldman sold C$750 million of senior floating-rate notes due July 27, 2022 (A3/BBB+/DBRS: A) at par to yield CDOR plus 54 basis points, a source said.

SNC-Lavalin Group Inc. also came with C$525 million of senior debentures (/BBB/DBRS: BBB) in three tranches in a private placement offering in Canada on Wednesday, according to a market source and a news release.

Investment-grade issuance has been strong over the past three sessions with deal volume expected in the $25 billion to $30 billion range for the week.

“The markets turned a little into red here at the close,” a syndicate source said. “We’ll see what happens overnight but it feels like it might be a rest tomorrow.”

The Markit CDX North American Investment Grade 29 index eased about 1 basis point to close at a spread of 55 bps.

California Edison prices

Southern California Edison priced $1.25 billion of first and refunding mortgage bonds (Aa3/A/A+) in three tranches on Wednesday, according to a market source and FWP filings with the Securities and Exchange Commission.

The $450 million tranche of 2.9% series 2018A three-year notes priced with a spread of 50 bps over Treasuries.

Southern California Edison sold $400 million of 3.65% series 2018B 10-year bonds at 99.818 to yield 3.672%. The bonds priced with a spread of 80 bps over Treasuries.

The company sold $400 million of 4.125% series 2018C 30-year bonds at 99.812 to yield 4.136%, or a spread of Treasuries plus 100 bps.

The bonds priced on the tight side of talk.

BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc., MUFG, U.S. Bancorp Investments Inc., Mizuho Securities USA Inc. and PNC Capital Markets LLC were the bookrunners.

Proceeds will be used to repay commercial paper borrowings, to finance fuel inventories and for general corporate purposes.

Southern California Edison is an electric utility company based in Rosemead, Calif.

Travelers brings 30-year notes

Travelers sold $500 million of 4.05% 30-year senior notes on Wednesday at 99.364 to yield 4.087%, according to an FWP filing with the SEC.

The notes (A2/A/A) priced with a spread of 95 bps over Treasuries.

Barclays, Citigroup Global Markets, Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to retire the company’s $500 million of 5.8% senior notes due May 15, 2018.

Travelers is a New York-based holding company for auto, home and business property casualty insurance companies.

Regency sells senior notes

Regency Centers priced $300 million of 4.125% 10-year guaranteed senior notes (Baa1/BBB+/) on Wednesday at a spread of 127 bps over Treasuries, according to an FWP filing with the SEC.

The company placed the notes at 99.837 to yield 4.145%.

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

Proceeds will be used to repay $150 million of 6% notes due June 15, 2020 and about $115 million of 2018 mortgage maturities with an average interest rate of 6.3%, to reduce the balance on the company’s line of credit and for general corporate purposes.

The notes will be guaranteed by general partner Regency Centers Corp., a Jacksonville, Fla., real estate investment trust that owns retail shopping centers.

EBRD raises $1.5 billion

European Bank for Reconstruction and Development (Aaa/AAA/AAA) priced $1.5 billion of 2.75% global notes due March 7, 2023 on Wednesday at a spread of mid-swaps plus 7 bps, or Treasuries plus 18.05 bps, according to a market source.

The notes were initially talked to price with a spread in the mid-swaps plus 9 bps area.

BMO Capital Markets Corp., Citigroup Global Markets, Goldman Sachs & Co. LLC and TD Securities (USA) LLC were the lead managers.

The financial institution is based in London.

Municipality Finance prices

Municipality Finance (Aa1/AA+/) priced $1 billion of 2.875% five-year notes on Wednesday on top of talk at a spread of mid-swaps plus 16 bps, or Treasuries plus 27.05 bps, according to a market source.

HSBC Securities (USA) Inc., J.P. Morgan Securities, Mizuho Securities and Nomura Securities International, Inc. were the lead managers of the Rule 144A/Regulation S-eligible deal.

Municipality Finance is a Helsinki, Finland-based credit institution that provides funding for the public sector in Finland.

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