High-grade issuers flood primary; Enterprise, Ford, BPCE, John Deere, GM, Kroger, Duke price

By Cristal Cody

Tupelo, Miss., Jan. 6 – The investment-grade primary market shifted into high gear on Monday with heavy volume at the start of the first full week of 2020.

Issuers during the session included Enterprise Products Operating LLC, Ford Motor Credit Co. LLC, BNP Paribas SA, Metropolitan Life Funding I, National Australia Bank Ltd., New York Branch, BPCE SA, John Deere Capital Corp., General Motors Financial Co. Inc., the Southern Co., Duke Energy Carolinas LLC, Kroger Co., Southern California Gas Co. and Southern California Edison Co.

Also, MDC Holdings, Inc. priced $300 million of split-rated 10-year notes.

In addition, Home Depot, Inc., Sumitomo Mitsui Financial Group, Inc. and Santander UK plc were selling investment-grade bonds on Monday.

Volume was expected to be strong in January after only about $20 billion of bonds priced in December, according to market sources.

January supply is forecast to total in the $115 billion to $125 billion area, syndicate sources said.

The Markit CDX North American Investment Grade 33 index ended the day mostly unchanged at a spread of 45.9 basis points.

Enterprise Products prices $3 billion

Enterprise Products Operating priced $3 billion of guaranteed fixed-rate senior notes (Baa1/BBB+/BBB+) in three tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $1 billion tranche of 2.8% 10-year notes priced at 99.921 to yield 2.809%, or a spread of 100 bps over Treasuries. Initial price talk was in the Treasuries plus 120 bps area.

The company sold $1 billion of 3.7% notes due Jan. 31, 2051 at 99.413 to yield 3.732%, or a Treasuries plus 145 bps spread. The notes were initially talked to price in the 165 bps over Treasuries spread area.

In the final tranche, Enterprise Products priced $1 billion of 3.95% 40-year notes at 99.36 to yield 3.982%. The bonds were sold at a spread of Treasuries plus 170 bps.

Price guidance was in the Treasuries plus 195 bps area.

The notes are unconditionally guaranteed by parent company Enterprise Products Partners LP.

Bookrunners were Citigroup Global Markets Inc., Barclays, SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, RBC Capital Markets, LLC, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc.

The midstream energy services provider is based in Houston.

Ford Motor brings $2.4 billion

Ford Motor Credit (Ba1/BBB-/BBB) priced $2.4 billion of senior notes in two tranches on Monday, dropping a floating-rate tranche from the final sale, according to a market source and an FWP filing.

Ford sold $1.5 billion of 3.087% three-year notes at par to yield a spread of Treasuries plus 153 bps.

A $900 million tranche of 4.271% seven-year notes priced at par to yield a 255 bps over Treasuries spread.

Both tranches priced tighter than guidance.

Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Lloyds Securities Inc., SMBC Nikko, Banca IMI, SpA, Credit Agricole Securities (USA) Inc. and SG Americas Securities LLC were the bookrunners.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

BNP sells fixed/floaters

BNP Paribas (Baa1/A+/A+) priced $2 billion of 3.052% fixed-to-floating-rate notes due Jan. 13, 2031 on Monday at a spread of 125 bps over Treasuries, according to a market source.

The notes were initially talked to price with a spread in the Treasuries plus 140 bps to 145 bps area.

The rate on the notes will convert to a floating rate of SOFR plus 150.7 bps after the initial fixed-rate period.

BNP Paribas Securities Corp. was the bookrunner.

BNP Paribas is a Paris-based banking and financial services company.

MetLife prices $2 billion

Metropolitan Life Funding I priced $2 billion of notes (Aa3/AA-/) in two tranches on Monday, according to a market source.

The company sold $1 billion of floating-rate notes due Jan. 13, 2023 at SOFR plus 57 bps.

A $1 billion tranche of 1.95% three-year notes priced at a Treasuries plus 40 bps spread.

BofA Securities, Inc., J.P. Morgan, Morgan Staley & Co. LLC, TD Securities (USA) LLC and Wells Fargo were the bookrunners.

The issuer is a financing arm of New York City-based insurance and employee benefits company MetLife Inc.

National Australia Bank prints

National Australia Bank, New York sold $1.75 billion of senior notes (Aa3/AA-/) in two tranches on Monday, according to a market source.

A $1 billion tranche of three-year floating-rate notes priced at Libor plus 41 bps.

The bank sold $750 million of 1.875% notes due Dec. 13, 2022 at a Treasuries plus 43 bps spread.

BofA Securities, Citigroup Global Markets Inc., National Australia Bank and RBC were the bookrunners.

The National Australia Bank Ltd. branch is based in New York City.

GM Financial sells $1.25 billion

General Motors Financial (Baa3/BBB/BBB) priced $1.25 billion of 2.9% notes due Feb. 26, 2025 at 99.874 to yield 2.926%, or a spread of 132 bps over Treasuries on Monday, according to a market source and an FWP filing.

The notes priced better than initial talk in the Treasuries plus 150 bps area.

BofA Securities, Banco Bradesco BBI SA, Citigroup, Deutsche, J.P. Morgan and NatWest Markets Securities Inc. were the bookrunners.

General Motors Financial is the Fort Worth-based finance subsidiary of General Motors Co.

John Deere Capital in primary

John Deere Capital priced a $1.1 billion two-part offering of senior medium-term notes (A2/A/A) on Monday, according to an informed source and FWP filings.

The company sold $550 million of 2.05% notes due Jan. 9, 2025 at 99.972 to yield 2.056%, or a Treasuries plus 45 bps spread.

Initial talk was in the low 60 bps area.

A $550 million tranche of 2.45% notes due Jan. 9, 2030 priced at 99.947 to yield 2.456% and a spread of 65 bps over Treasuries, compared to initial talk in the low 80 bps area.

BofA Securities, Citigroup, Goldman Sachs and MUFG were the bookrunners.

John Deere Capital is a financing arm of Moline, Ill.-based farm equipment supplier Deere & Co.

Southern raises $1 billion

Southern Co. priced $1 billion of $25-par 4.95% junior subordinated notes due Jan. 30, 2080 (Baa3/BBB/BBB-) on Monday with a 4.95% coupon, according to a market source and an FWP filing.

The fixed-rate notes were initially talked to price in a $250 million offering in the 5.125% area.

BofA Securities, Morgan Stanley & Co. LLC, Wells Fargo, J.P. Morgan and RBC were the bookrunners.

Southern is an Atlanta-based electric utility company.

Duke prices two tranches

Duke Energy Carolinas priced a $900 million two-tranche offering of new and reopened first and refunding mortgage bonds (Aa2/A/) on Monday, according to a market source and an FWP filing.

In the new issue, the company priced an upsized $500 million of 2.45% bonds due Feb. 1, 2030 at 99.68 to yield 2.486%, and a spread of Treasuries plus 68 bps.

Guidance on the initial $450 million sized deal was in the 80 bps to 85 bps spread area.

Duke Energy placed a $400 million add-on to its 3.2% bonds due Aug. 15, 2049 at 100.794 to yield 3.158%. The bonds priced with a spread of 88 bps over Treasuries.

The issue was downsized from a $450 million expected tranche, while initial talk was in the Treasuries plus 105 bps area.

Duke Energy first sold $350 million of the 3.2% bonds on Aug. 12, 2019 at 99.732 to yield 3.214% and a Treasuries plus 110 bps spread. The total outstanding is now $750 million.

Bookrunners were BofA Securities, Citigroup, MUFG, Scotia Capital (USA) Inc., SMBC Nikko and Wells Fargo.

The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.

Kroger raises $750 million

Kroger priced $750 million of 3.95% senior notes due Jan. 15, 2050 (Baa1/BBB/) on Monday at 99.668 to yield 3.969% and a spread of Treasuries plus 170 bps, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 190 bps to 195 bps area.

BofA Securities, Mizuho, RBC, Citigroup, Fifth Third Securities Inc. and MUFG were the bookrunners.

Kroger is a Cincinnati-based grocery retailer.

Southern California Gas sells bonds

Southern California Gas sold an upsized $650 million of 2.55% first mortgage bonds due Feb. 1, 2030 on Monday at 99.77 to yield 2.576%, according to a market source and an FWP filing.

The bonds (Aa2/A+/AA-) priced with a spread of 77 bps over Treasuries.

Initial price talk had the $500 million deal pricing in the 100 bps area.

Credit Agricole, Mizuho, Scotia, U.S. Bancorp and Academy Securities, Inc. were the bookrunners.

The natural gas distributor is based in Los Angeles.

Southern California Edison prints

Southern California Edison priced $600 million of first and refunding mortgage bonds (A3/A-/BBB+) in new and reopened tranches on Monday, according to a market source and FWP filings.

The company sold $100 million of reopened 2.85% bonds due Aug. 1, 2029 at 101.179 to yield 2.706% and a spread of Treasuries plus 90 bps.

The notes were initially talked to price in the Treasuries plus 110 bps area.

The bonds were first sold in a $400 million offering on Aug. 1, 2019 at 99.845 to yield 2.868%, or a Treasuries plus 95 bps spread. The total outstanding is now $500 million.

Southern California Edison also priced $500 million of new 3.65% first and refunding mortgage bonds due Feb. 1, 2050 at 99.347 to yield 3.686%, or a Treasuries plus 140 bps spread.

Initial talk was in the 160 bps to 165 bps over Treasuries area.

The bookrunners were MUFG, PNC Capital Markets LLC, RBC and Wells Fargo.

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

BPCE prices $1.25 billion

BPCE (Baa2/A+/A+) priced $1.25 billion of 2.375% notes due Jan. 14, 2025 on Monday at a spread of 90 bps over Treasuries, according to an informed source.

Initial price talk was in the Treasuries plus 110 bps area.

Barclays, Credit Suisse, Goldman Sachs, J.P. Morgan and Natixis Securities Americas LLC were the lead managers.

The financial services company is based in Paris.

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