Costco, Capital One, Bank of New York Mellon, Sammons, Entergy Arkansas price; RBS eyes deal

By Cristal Cody

Tupelo, Miss., May 9 – Costco Wholesale Corp. led the deal action with a $3.8 billion four-tranche offering of senior notes in the investment-grade bond market on Tuesday.

Also, Capital One Financial Corp. brought a $2.5 billion three-part offering of senior notes to the primary market.

Bank of New York Mellon Corp. came with $1.75 billion of notes in two tranches.

Sammons Financial Group Inc. priced $500 million of 10-year senior notes.

Also, Monongahela Power Co. sold $250 million of 10-year first mortgage bonds on Tuesday.

Entergy Arkansas Inc. priced a $220 million add-on to its 3.5% first mortgage bonds due April 1, 2026.

In other action, Royal Bank of Scotland Group plc signaled plans to price a two-part offering of notes.

The Markit CDX North American Investment Grade index ended mostly flat at a spread of 62 basis points.

Costco prices $3.8 billion

Costco Wholesale sold $3.8 billion of senior notes (A1/A+/A+) in four parts on Tuesday, adding a four-year tranche to the final sale, according to a market source and an FWP filing with the Securities and Exchange Commission.

Costco priced $1 billion of 2.15% four-year notes at 99.825 to yield 2.196% and a spread of Treasuries plus 65 bps.

The company priced $800 million of 2.3% five-year notes at 99.625 to yield 2.38%, or Treasuries plus 45 bps.

The $1 billion offering of 2.75% seven-year notes was placed at 99.596 to yield 2.814% and a spread of 60 bps over Treasuries.

Costco also sold $1 billion of 3% 10-year notes at 99.137 to yield 3.101%. The notes priced with a Treasuries plus 70 bps spread.

The tranches all priced on the tight side of guidance.

Citigroup Global Markets Inc. and Guggenheim Securities, LLC were the bookrunners.

Proceeds will be used to pay a $7.00 common stock dividend and repay at or before maturity all $1.1 billion of the company’s 1.125% senior notes due Dec. 15, 2017.

The membership warehouse is based in Issaquah, Wash.

Capital One sells $2.5 billion

Capital One Financial sold $2.5 billion of senior notes (Baa1/BBB/A-) in three tranches, including an add-on to its 3.75% senior notes due 2027, according to a market source on Tuesday.

Capital One Financial priced $500 million of three-year floating-rate notes at Libor plus 76 bps.

The company sold $1.4 billion of 2.5% three-year fixed-rate notes at a spread of Treasuries plus 100 bps.

Capital One Financial priced a $600 million reopening of its 3.75% 10-year notes at a Treasuries plus 153 bps spread.

The company originally sold $750 million of the notes on March 6 at 99.694 to yield 3.787%, or 130 bps over Treasuries. The total outstanding now is $1.35 billion.

Barclays, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Capital One Securities were the bookrunners.

Proceeds will be used for general corporate purposes.

Capital One is a McLean, Va.-based financial services company.

Bank of New York Mellon prices

Bank of New York Mellon priced $1.75 billion of notes (A1/A/AA-) in two tranches on Tuesday, according to a market source.

The bank sold $1 billion of 2.661% six-year fixed-to-floating-rate notes at a spread of 73 bps over Treasuries. The notes will convert to a floating rate of Libor plus 63.4 bps.

Bank of New York Mellon priced $750 million of 3.25% 10-year notes at a spread of Treasuries plus 85 bps.

Both tranches priced on the tight side of guidance.

Barclays, Goldman Sachs & Co., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC and BNY Mellon Capital Markets LLC were the bookrunners.

Bank of New York Mellon is a financial products and services company based in New York.

Sammons sells $500 million

Sammons Financial Group priced $500 million of 4.45% 10-year senior notes (/BBB+/BBB+) on Tuesday at a spread of Treasuries plus 205 bps, a market source said.

The notes were talked to price in the Treasuries plus 210 bps area, plus or minus 5 bps.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Sammons Financial Group is a Chicago-based investment securities services and insurance provider.

Monongahela Power brings $250 million

Monongahela Power sold $250 million of 3.55% 10-year first mortgage bonds on Tuesday at a spread of 115 bps over Treasuries, a market source said.

The notes (A3/BBB+/) priced on the tight side of guidance in the Treasuries plus 120 bps area, plus or minus 5 bps.

J.P. Morgan Securities LLC and TD Securities (USA) LLC were the bookrunners.

Monongahela Power is a Fairmont, W.V.-based electricity distributor.

Entergy Arkansas sells add-on

Entergy Arkansas priced a $220 million add-on to its 3.5% first mortgage bonds due April 1, 2026 on Tuesday at a spread of 80 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The bonds (A2/A/) priced at 102.208 to yield 3.205%.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Stephens Inc. and Wells Fargo Securities LLC were the bookrunners.

The company originally sold $325 million of the notes on Jan. 5, 2016 at 99.671 to yield 3.539% with a spread of 130 bps over Treasuries. Entergy Arkansas sold an additional $55 million of the notes on June 13, 2016 at 108.3 to yield 2.516%, or 90 bps over Treasuries. The total outstanding now is $600 million.

Proceeds will be used to repay at maturity $54.7 million of 1.55% pollution control revenue refunding bonds due October 2017 and for general corporate purposes.

Entergy Arkansas is a Little Rock, Ark.-based energy provider.

RBS markets notes

Royal Bank of Scotland Group plans to price an offering of fixed-rate/floating-rate and floating-rate notes due 2023, according to a 424B5 filed with the Securities and Exchange Commission on Tuesday.

Both tranches will have par calls.

Credit Suisse, Morgan Stanley, NatWest Markets and UBS Investment Bank are the bookrunners.

Proceeds will be used to fund the company’s general banking business. Royal Bank of Scotland Group is a banking and financial services company based in Edinburgh, Scotland

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