NextEra, Vodafone, Barclays, RenaissanceRe price notes; high-grade inflows decline

By Cristal Cody

Tupelo, Miss., March 28 – Investment-grade issuers priced nearly $6 billion of bonds over Thursday’s session.

NextEra Energy Capital Holdings Inc. sold $2.7 billion of debentures in four tranches.

Vodafone Group plc brought $2 billion of 60-year capital securities.

Barclays plc priced a $750 million add-on to its fixed-to-floating-rate senior notes due Feb. 15, 2023.

RenaissanceRe Holdings Ltd. also priced $400 million of 10-year senior notes following fixed income investor calls on Tuesday and Wednesday.

More than $18 billion of bonds, including a $5 billion eight-part offering of senior notes on Tuesday from Mars Inc., have priced week to date.

About $20 billion of investment-grade issuance was expected by syndicate sources for the week.

Meanwhile, a debt offering may be on the horizon from ZF Friedrichshafen AG (Baa3/BBB/) after the company announced on Thursday that it will acquire Wabco Holdings Inc. in a deal valued at about $7 billion. The transaction is expected to close at the start of 2020.

Lipper US Fund Flows reported on Thursday that for the week ended March 27, corporate investment-grade fund inflows came to $2.75 billion, down from $5.14 billion the previous week.

The Markit CDX North American Investment Grade 32 index headed out more than 1 basis point tighter on the day at a spread of 67 bps.

Smithfield Foods, Inc.’s $400 million of 5.2% senior notes due April 1, 2029 (Ba1/BBB-/BBB) priced on Wednesday improved 15 bps in aftermarket trading, a source said.

The Smithfield, Va.-based meat processor priced the notes at a spread of 290 bps over Treasuries, on the tight side of guidance in the Treasuries plus 295 bps area, plus or minus 5 bps.

NextEra prices $2.7 billion

NextEra Energy Capital Holdings sold $2.7 billion of debentures (Baa1/BBB+/A-) in four tranches on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $1 billion tranche of 2.9% three-year debentures priced at 99.906 to yield 2.933%, or a Treasuries plus 75 bps spread.

NextEra placed $900 million of 3.15% five-year bonds at par to yield a spread of Treasuries plus 95 bps.

The company sold $300 million of 3.25% seven-year debentures at 99.696 to yield 3.299%, or a spread of 100 bps over Treasuries.

A $500 million tranche of 3.5% 10-year bonds priced at 99.616 to yield 3.546%. The debentures priced with a spread of Treasuries plus 115 bps spread.

The bonds priced tighter than initial talk.

Bookrunners were Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, BofA Merrill Lynch, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Mizuho Securities USA LLC, SMBC Nikko Securities America Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets LLC, CIBC World Markets Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, MUFG, PNC Capital Markets LLC, RBC Capital Markets LLC, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC, U.S. Bancorp Investments Inc. and Wells Fargo Securities, LLC.

Parent company NextEra Energy, Inc. will guarantee the notes.

The energy company is based in Juno Beach, Fla.

Vodafone prices $2 billion

Vodafone Group (Baa2/BBB+/BBB+) priced $2 billion of capital securities due April 4, 2079 (Ba1/BBB-/BBB-) on Thursday at par to yield 7%, or mid-swaps plus 462.3 bps, according to a market source and an FWP filing with the SEC.

Price guidance was in the 7.125% area.

The rate on the notes will reset on the first reset date of April 4, 2029 at mid-swaps plus 487.3 bps. The rate will reset on or after April 4, 2049 at mid-swaps plus 562.3 bps.

BofA Merrill Lynch and RBC Capital Markets were the global coordinators. BNP Paribas Securities, HSBC Securities (USA) Inc. and Standard Chartered Bank were bookrunners.

The notes will be callable at the first call date to the first reset date.

The deal includes a 101% change-of-control put.

The offering is registered with the Securities and Exchange Commission.

The telecommunications company is based in London.

Barclays brings add-on

Barclays priced a $750 million reopening of its fixed-to-floating-rate senior notes due Feb. 15, 2023 on Thursday at a spread of 170 bps over Treasuries, according to a market source and an FWP filing with the SEC.

Initial price talk was in the Treasuries plus 175 bps area.

The notes (Baa3/BBB/A) priced at 101.966 to yield 3.872%.

Barclays originally sold $1.75 billion of the notes on Nov. 7, 2018 at 99.981 to yield 4.16% and a spread of 160 bps plus Treasuries. The notes will convert Feb. 15, 2022 to a floating rate of Libor plus 140 bps. The total outstanding is now $2.5 billion.

Barclays was the bookrunner.

The financial services company is based in London.

RenaissanceRe prints

RenaissanceRe Holdings priced $400 million of 3.6% 10-year senior notes on Thursday on the tight side of guidance at a spread of 138 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The notes (A3/A-/) priced at 98.606 to yield 3.768%.

Price guidance was in the Treasuries plus 140 bps area, plus or minus 2 bps.

Bookrunners were Citigroup Global Markets, BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities.

RenaissanceRe held fixed income investor calls on Tuesday and Wednesday for the offering.

RenaissanceRe is a Hamilton, Bermuda-based reinsurance company.

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