Primary heats up; BMO, UniCredit, Vulcan, Fifth Third, Masco price bonds; deal pipeline fills

By Cristal Cody

Tupelo, Miss., June 12 – High-grade issuers kicked off the week on a strong note and priced nearly $7 billion of bonds over Monday’s session.

Bank of Montreal sold $2 billion of senior medium-term notes in two tranches.

UniCredit SpA placed $1 billion of 15-year split-rated subordinated notes.

Vulcan Materials Co. priced $1 billion of senior notes in three tranches on Monday.

Fifth Third Bancorp sold $700 million of five-year senior notes during the session.

Masco Corp. priced $600 million of split-rated senior notes in two parts.

Enbridge Inc. came with a $500 million offering of three-year senior floating-rate notes.

Also on Monday, Public Service Co. of Colorado sold $400 million of 30-year first mortgage bonds.

AvalonBay Communities, Inc. priced $300 million of 30-year medium-term notes.

Kemper Corp. priced a $200 million reopening of its 4.35% senior notes due Feb. 15, 2025.

At least two issuers plan to tap the investment-grade bond market on Tuesday.

Kommunalbanken AS is marketing a Rule 144A and Regulation S offering of dollar notes due Sept. 15, 2020.

Inter-American Development Bank plans to price three-year global floating-rate notes.

The Markit CDX North American Investment Grade index closed less than 1 basis point tighter at a spread of 60 bps.

BMO sells $2 billion

Bank of Montreal priced $2 billion of series D senior medium-term notes (A1/A+/AA-) in three-year fixed- and floating-rate tranches on Monday, according to a market source and a 424B2 filing with the Securities and Exchange Commission.

The bank sold $1 billion of floating-rate notes due June 15, 2020 at Libor plus 44 bps.

Bank of Montreal priced $1 billion of 2.1% fixed-rate notes due June 15, 2020 at a spread of Treasuries plus 62 bps.

BMO Capital Markets Corp., BofA Merrill Lynch, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

The financial services company is based in Toronto.

UniCredit prices $1 billion

UniCredit sold $1 billion of 5.861% 15-year dollar-denominated subordinated notes at a spread of Treasuries plus 365 bps on Monday, according to a market source.

The split-rated notes (Ba1/BB/BBB-/) priced in the Rule 144A and Regulation S offering on the tight side of guidance in the Treasuries plus 370 bps area, plus or minus 5 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, SG Americas Securities, LLC and UniCredit Capital Markets LLC were the lead managers.

UniCredit held a roadshow at the start of the month in the United States, Canada and Asia for the transaction.

The banking and financial services company is based in Milan, Italy.

Vulcan in primary

Vulcan Materials priced $1 billion of senior notes (Baa3/BBB/BBB-) in three tranches on Monday, according to a market source and an FWP filing with the SEC.

The company sold $250 million of three-year floating-rate notes at par to yield Libor plus 60 bps.

Vulcan Materials sold $50 million in a reopening of its 3.9% notes due April 1, 2027 at 103.54 to yield 3.461% and a Treasuries plus 125 bps spread.

Vulcan Materials originally sold $350 million of the notes on March 9 at 99.603 to yield 3.948% and a spread of 135 bps over Treasuries. The total outstanding now is $400 million.

In the final tranche, the company priced $700 million of 4.5% 30-year notes at 99.624 to yield 4.523%, or a spread of 165 bps over Treasuries.

The notes priced on the tight side of guidance.

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

Proceeds will be used for the acquisition of Aggregates USA, the planned redemption of the company's 7% notes due 2018 and the planned redemption of its 10.375% notes due 2018.

Vulcan makes construction materials and is based in Birmingham, Ala.

Fifth Third Bancorp prices

Fifth Third Bancorp sold $700 million of 2.6% five-year senior notes (Baa1/BBB+/A) on Monday at a spread of 83 bps over Treasuries, according to a market source.

The notes were talked to price in the Treasuries plus 85 bps area, plus or minus 2 bps.

Morgan Stanley, Citigroup Global Markets, Credit Suisse Securities (USA) LLC and Fifth Third Securities Inc. were the bookrunners.

The notes feature a par call 30 days prior to the maturity date, according to a 424B3 filing with the SEC.

Proceeds will be used for general corporate purposes.

Fifth Third is a Cincinnati-based financial services company.

Masco places notes

Masco priced $600 million of split-rated senior notes (Ba1/BBB/BBB-) in two tranches on Monday, according to a market source and an FWP filing with the SEC.

The company sold $300 million of 3.5% long 10-year notes at 99.907 to yield 3.511% and a spread of Treasuries plus 130 bps.

Masco priced $300 million of 4.5% 30-year notes at 99.645 to yield 4.522%, or a spread of 165 bps over Treasuries.

Both tranches priced on the tight side of talk.

Citigroup Global Markets, Deutsche Bank Securities Inc., J.P. Morgan Securities, RBC Capital Markets, LLC and SunTrust Robinson Humphrey were the bookrunners.

Proceeds will be used for the tender offers of the company’s 7.125% notes due 2020, 5.95% notes due 2022, 7.75% notes due 2029 and 6.5% notes due 2032.

Masco is a Taylor, Mich., building products company.

Enbridge sells floaters

Enbridge priced $500 million of three-year senior floating-rate notes (Baa2/BBB+/BBB+) at par to yield Libor plus 70 bps on Monday, according to an FWP filing with the SEC.

BofA Merrill Lynch was the bookrunner.

Enbridge Gas is a Toronto-based natural gas distribution company.

Public Service brings bonds

Public Service Co. of Colorado sold $400 million of series 30 first mortgage bonds due June 15, 2047 (A1/A/A+) on Monday at 99.592 to yield 3.823%, according to a market source and an FWP filing with the SEC.

The bonds priced with a spread of 95 bps over Treasuries, on the tight side of guidance in the Treasuries plus 95 bps to 100 bps area.

BNP Paribas Securities Corp., J.P. Morgan Securities, RBC Capital Markets and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, including working capital, capital expenditures and acquisitions, repaying short-term debt and refunding long-term debt at maturity or otherwise.

The Denver-based company is an operating utility engaged primarily in the generation, purchase, transmission, distribution and sale of electricity. It is a subsidiary of Minneapolis-based Xcel Energy Inc.

AvalonBay prints

AvalonBay Communities priced $300 million of 4.15% 30-year medium-term notes (A3/A-/) at 99.999 and a spread of 128 bps over Treasuries on Monday, according to a market source and an FWP filing with the SEC.

The notes (A3/A-/) were talked to price in the Treasuries plus 130 bps area, plus or minus 2 bps.

Goldman Sachs and Wells Fargo Securities were the lead managers.

Proceeds will be used to help prepay debt outstanding under the company’s Freddie Mac secured debt pool that matures on May 1, 2019. The 5.86% annual fixed-rate debt pool was originated in April 2009 and includes 12 collateral properties. The aggregate principal of secured debt outstanding with the debt pool is $556.31 million as of June 1.

The manager and developer of apartment communities is based in Arlington, Va.

Kemper reopens

Kemper priced a $200 million reopening of its 4.35% senior notes due Feb. 15, 2025 (Baa3/BBB-/BBB-) on Monday at 101.193 with a yield to worst of 4.161%, according to a market source and an FWP filing with the SEC.

The notes priced on the tight side of guidance at a spread of Treasuries plus 195 bps.

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

The company originally sold $250 million of the notes on Feb. 19, 2015 at 99.937 to yield 4.359% and a spread of 225 bps over Treasuries. The total outstanding now is $450 million.

Proceeds from the reopening are expected to be used for general corporate purposes.

Kemper is a diversified insurance holding company based in Chicago.

Kommunalbanken eyes sale

Kommunalbanken (Aaa/AAA/) plans to price a Rule 144A and Regulation S offering of dollar notes due Sept. 15, 2020 on Tuesday, according to a market source.

The notes were initially talked to price in the mid-swaps plus 10 bps area.

Daiwa Capital Markets Europe Ltd., Deutsche Bank Securities Inc., J.P. Morgan Securities and Toronto-Dominion Bank are the lead managers.

The government-funded lender to municipalities is based in Oslo.

IADB talks offering

Inter-American Development Bank (Aaa/AAA/) intends to price new global floating-rate notes due July 15, 2022 on Tuesday, according to a market source.

The five-year notes were talked initially to price at the Libor plus 7 bps area.

BMO Capital Markets, Citigroup Global Markets and Wells Fargo Securities are the bookrunners.

The provider of development financing for Latin America and the Caribbean is based in Washington, D.C.

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