Primary action heavy; Siemens, Brookfield, Exelon, Harley-Davidson price; credit spreads ease

By Cristal Cody

Tupelo, Miss., March 7 – Investment-grade pricing action remained strong over Tuesday’s session.

Issuers including Brookfield Finance LLC, Pacific Gas & Electric Co., Exelon Generation Co., LLC and Enstar Group Ltd. tapped the primary market.

“I think it will stay busy,” one syndicate source said on Tuesday.

Also on Tuesday, Siemens Financieringsmaatschappij NV priced a $7.5 billion seven-tranche offering of notes.

The European Investment Bank sold $3 billion of five-year global notes.

Harley-Davidson Financial Services, Inc. brought $500 million of senior medium-term notes in two tranches to the primary market.

Kommuninvest I Sverige AB sold $500 million of 1½-year notes.

Southern Natural Gas tapped the market with a $400 million 30-year senior notes deal.

The Markit CDX North American Investment Grade index eased about 1 basis point to end at a spread of 62 bps.

Siemens prices $7.5 billion

Siemens Financieringsmaatschappij priced $7.5 billion of notes (A1/A+/) in seven tranches on Tuesday, a market source said.

The company sold $800 million of three-year floating-rate notes at Libor plus 34 bps.

Siemens priced $1.1 billion of 2.2% three-year fixed-rate notes at a spread of Treasuries plus 60 bps.

The $850 million tranche of five-year floating-rate notes was placed at Libor plus 61 bps.

Siemens brought $1 billion of 2.7% five-year fixed-rate notes at a Treasuries plus 70 bps spread.

In the seven-year tranche, the company sold $1 billion of 3.125% notes at a spread of 80 bps over Treasuries.

The company priced $1.25 billion of 3.4% 10-year notes at Treasuries plus 90 bps.

The final tranche of $1.5 billion of 4.2% 30-year notes priced at a spread of 110 bps over Treasuries.

The lead managers included BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC.

The company is the financing arm of Munich-based manufacturing and electronics company Siemens AG.

EIB sells $3 billion

The European Investment Bank priced $3 billion of 2.375% five-year global notes at a spread of Treasuries plus 38.05 bps on Tuesday, according to a market source.

The notes are due June 15, 2022.

J.P. Morgan Securities plc, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the lead managers.

The European Investment Bank is a lending institution based in Luxembourg.

Exelon raises $750 million

Exelon Generation Co. sold $750 million of senior notes (Baa2/BBB/BBB) in two tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company brought a $250 million add-on to its 2.95% senior notes due Jan. 15, 2020 at 100.895 to yield 2.612% and a spread of Treasuries plus 100 bps.

Exelon originally issued $750 million of the notes on Jan. 8, 2015. The total outstanding is $1 billion.

In the new issue, Exelon priced $500 million of 3.4% notes due March 15, 2022 at 99.785 to yield 3.447% and a spread of Treasuries plus 140 bps.

Both tranches priced on the tight side of talk.

Barclays, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to repay all commercial paper obligations and for general corporate purposes.

Exelon is a utility services holding company based in Chicago.

Brookfield Finance upsizes

Brookfield Finance priced an upsized $750 million of 4% senior notes due April 1, 2024 (Baa2/A-/DBRS: A) at a spread of 170 bps over Treasuries on Tuesday, according to a market source and an FWP filing with the SEC.

The notes priced at 99.742 to yield 4.042%.

The deal was upsized from $500 million and priced on the tight side of guidance.

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the bookrunners.

Proceeds will be used for general corporate purposes.

The notes will be guaranteed by Brookfield Asset Management Inc., a Toronto-based alternative asset manager with about $250 billion in assets under management.

PG&E brings new issue, tap

Pacific Gas & Electric priced $600 million of senior notes (A3/BBB+/A) in two parts on Tuesday, according to a market source and an FWP filing with the SEC.

The company sold $400 million of 3.3% 10-year notes at 99.645 to yield 3.342% and a Treasuries plus 83 bps spread, on the tight side of talk at Treasuries plus 85 bps area, plus or minus 2 bps.

Pacific Gas & Electric sold $200 million in a reopening of its 4% notes due Dec. 1, 2046 in line with guidance at a spread of 100 bps over Treasuries. The notes priced at 97.932 to yield 4.121%.

The company originally sold $400 million of the notes at 98.164 to yield 4.107%, or 110 bps over Treasuries, on Nov. 28, 2016. The total outstanding now is $600 million.

BNP Paribas Securities Corp., Goldman Sachs & Co., RBC Capital Markets Corp. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The electric and natural gas utility is based in San Francisco.

Harley-Davidson sells two parts

Harley-Davidson Financial Services priced $500 million of senior medium-term notes (A3/A-/A) in two tranches on Tuesday, according to a market source.

The company sold $150 million of two-year floating-rate notes at Libor plus 35 bps.

Harley-Davidson Financial Services priced $350 million of 2.4% three-year fixed-rate notes at a spread of 80 bps over Treasuries.

Barclays, Citigroup Global Markets Inc. and Goldman Sachs & Co. were the bookrunners.

Proceeds will be used for general corporate purposes.

The Chicago-based company is the financing arm of Harley-Davidson Inc.

Kommuninvest prices $500 million

Kommuninvest I Sverige sold $500 million of 1.375% notes due Sept. 7, 2018 on Tuesday at a spread of Treasuries plus 17.35 bps in a Rule 144A and Regulation S offering, a market source said.

Barclays, BMO Capital Markets Corp. and Scotia Capital (USA) Inc. were the lead managers.

Kommuninvest is an Orebro-based company that offers funding to municipalities of Sweden.

Southern Natural Gas prices

Southern Natural Gas priced $400 million of 4.8% 30-year senior notes at a spread of Treasuries plus 170 bps on Tuesday, according to a market source.

The notes due March 15, 2047 (Baa2/BBB+/BBB+) priced on the tight side of guidance.

Barclays, Citigroup Global Markets Inc. and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Proceeds will be used to refinance a portion of the company’s $500 million of notes due April 1, 2017.

Southern Natural Gas is a Birmingham, Ala.-based natural gas pipeline company and division of Kinder Morgan, Inc.

Enstar sells five-year notes

Enstar Group priced $350 million of 4.5% five-year senior notes on Tuesday at par, according to an FWP filing with the SEC.

The notes due March 10, 2022 (/BBB-/BBB-) were placed at a spread of 245.1 bps over Treasuries.

The bookrunners were Barclays, Wells Fargo Securities LLC, Lloyds Securities Inc. and SunTrust Robinson Humphrey, Inc.

Proceeds will be used to repay debt under the company’s the revolving credit facility and Sussex term loan facility and for general corporate purposes.

Enstar is a Hamilton, Bermuda-based company that acquires and manages insurance and reinsurance companies.

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