Pricing action heavy; KfW, JPMorgan, Tyson Foods, Activision, Canadian Resources print

By Cristal Cody

Tupelo, Miss., May 23 – The high-grade market saw strong issuance for a second straight session on Tuesday.

Issuers brought more than $13 billion of bonds to the primary market.

Deal volume also was heavy on Monday, led by Becton, Dickinson and Co.’s $9,675,000,000 seven-part offering of senior notes.

Moody’s Investors Service gave most of the company’s notes high-yield ratings of Ba1 with the two-year tranche given a high-grade rating of Baa2. Moody’s said it expects to also downgrade the Baa2 rating for the two-year notes to Ba1 if the company’s transaction to acquire C.R. Bard Inc. closes as currently proposed.

The deal was rated investment grade by S&P and Fitch.

The split ratings from Moody’s for the offering is “highly unusual,” a market source said.

Becton Dickinson also tapped the European primary market on Tuesday with a €700 million offering of two-year notes.

Moody’s assigned Becton Dickinson’s new euro notes a Baa2 rating, though the rating is under review for downgrade to Ba1 if the acquisition closes as currently proposed.

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

KfW prices $5 billion

KfW priced $5 billion of 1.625% three-year global notes (Aaa/AAA/) on Tuesday at 99.849 and a spread of Treasuries plus 21.7 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The benchmark dollar notes were talked to price at the mid-swaps plus 15 bps area.

BofA Merrill Lynch, Nomura Securities International, Inc. and RBC Capital Markets, LLC were the lead managers.

The notes are guaranteed by the Federal Republic of Germany.

KfW is a government-backed bank based in Frankfurt.

JPMorgan in primary

JPMorgan Chase & Co. sold $3 billion of notes (A3/A-/A+) in two tranches on Tuesday, according to a market source.

The company priced $1 billion of four-year floating-rate notes at Libor plus 68 bps.

JPMorgan sold $2 billion of 3.22% 7.75-year fixed-to-floating-rate notes at a spread of Treasuries plus 113 bps.

J.P. Morgan Securities LLC was the bookrunner.

Proceeds will be contributed to JPMorgan Chase Holdings LLC, which will use the proceeds for general corporate purposes, according to a 424B2 filing with the Securities and Exchange Commission.

JPMorgan is a New York-based financial services firm.

Canadian Natural Resources prices

Canadian Natural Resources Ltd. (Baa3/BBB+/) sold $3 billion of notes in three tranches on Tuesday, according to a market source.

The company sold $1 billion of 2.95% notes due Jan. 15, 2023 at a spread of Treasuries plus 115 bps.

Canadian Natural Resources priced $1.25 billion of 3.85% 10-year notes at a Treasuries plus 160 bps spread.

The company placed $750 million of 4.95% 30-year notes with a spread of 200 bps over Treasuries.

J.P. Morgan Securities, Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc., MUFG and TD Securities were the bookrunners.

Proceeds will be used to finance a portion of the purchase price of several of the company’s planned asset acquisitions, according to a preliminary prospectus filed with the Securities and Exchange Commission on Tuesday. If the acquisitions are not completed on or before Dec. 8, the notes will be subject to a special mandatory redemption at 101.

Canadian Natural Resources also plans to issue new senior Canadian dollar-denominated debt and/or advances under its acquisition credit facilities.

The oil and gas producer is based in Calgary, Alta.

Tyson Foods sells notes

Tyson Foods Inc. brought $2.75 billion of senior notes (Baa2/BBB/BBB) in four tranches to the primary market on Tuesday, according to a market source and an FWP filing with the SEC.

The company sold $300 million of two-year floating-rate notes at par to yield Libor plus 45 bps.

Tyson priced $350 million of three-year floating-rate notes at par to yield Libor plus 55 bps.

The $1.35 billion tranche of 3.55% 10-year notes priced at 99.833 to yield 3.57%, or a spread of Treasuries plus 128 bps.

Tyson also sold $750 million of 4.55% 30-year notes at 99.416 to yield 4.586%, or a Treasuries plus 163 bps spread.

The floating-rate tranches priced tighter than guidance, while the fixed-rate notes priced on the tight side of talk.

Morgan Stanley & Co. LLC, J.P. Morgan Securities, BofA Merrill Lynch, Barclays and RBC Capital Markets were the bookrunners.

Proceeds will be used, together with cash on hand, borrowings under new term loans and proceeds from the issuance of commercial paper or commercial notes, to finance the acquisition of AdvancePierre Foods Holdings, Inc. and to repay in full AdvancePierre’s outstanding 5.4% senior notes due 2024 and first lien term loan.

If the acquisition is not completed on or before Dec. 25, or if the merger agreement is terminated before that date, the notes will be redeemed at 101.

Tyson is a Springdale, Ark.-based food company.

Nordea Bank taps primary

Nordea Bank AB sold $1.75 billion of three-year fixed- and floating-rate notes in two parts on Tuesday, according to a market source.

The bank priced $750 million of floating-rate notes due May 29, 2020 at Libor plus 47 bps.

The $1 billion tranche of 2.125% three-year notes priced at a spread of 67 bps over Treasuries.

Barclays, Citigroup Global Markets, Goldman, Sachs & Co. and J.P. Morgan Securities were the lead managers.

Nordea Bank is a financial services group based in Stockholm.

Activision Blizzard sells three parts

Activision Blizzard, Inc. priced $1.25 billion of senior notes due 2022, 2027 and 2047 (Baa2/BBB/) tighter than guidance on Tuesday, according to a market source and an FWP filing with the SEC.

The company sold $400 million of 2.6% five-year notes at 99.67 and a spread of Treasuries plus 85 basis points.

Activision priced $400 million of 3.4% 10-year notes at 99.367. The notes priced with a Treasuries plus 120 bps spread.

Activision sold $400 million of 4.5% 30-year notes at 98.554, and a Treasuries plus 165 bps spread.

BofA Merrill Lynch, J.P. Morgan Securities, Wells Fargo Securities, LLC, Mizuho Securities USA Inc., MUFG and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Proceeds will be used along with cash on hand to prepay $1.2 billion outstanding under the company’s term loan A facility due Aug. 23, 2021. As of March 31, the loan term carried interest at 2.23% per year.

Activision Blizzard is a Santa Monica, Calif.-based developer and distributor of video game content and services.

Great-West Lifeco prints

Great-West Lifeco Inc. subsidiary Great-West Lifeco Finance (Delaware) LP priced $700 million of 4.15% 30-year senior notes (A+/A/) on Tuesday at 99.218 and a spread of Treasuries plus 125 bps, according to a market source and a company release.

The notes priced on the tight side of guidance in the Treasuries plus 130 bps area, plus or minus 5 bps.

Wells Fargo Securities, BMO Capital Markets Corp., J.P. Morgan Securities, LLC and RBC Capital Markets, LLC were the lead managers.

The notes are fully and unconditionally guaranteed by Great-West Lifeco.

Proceeds from the deal will be used to fund all or a portion of the early redemption of its 5.691% subordinated debentures due 2067.

Great-West Lifeco is a Winnipeg, Man.-based insurance and financial services holding company.

DDR prices $450 million

DDR Corp. sold an upsized $450 million of 4.7% 10-year notes (Baa2/BBB-/BBB-) on Tuesday at 99.817 to yield 4.723% and a spread of Treasuries plus 245 bps, according to a market source and an FWP filing with the SEC.

The deal was upsized from $300 million.

Jefferies LLC, J.P. Morgan Securities and Wells Fargo Securities were the bookrunners.

Proceeds will be used to repay debt under the company’s $750 million revolving credit facility and for general corporate purposes. As of May 17, total debt under the facility was $350 million with a weighted average interest of 2%.

DDR is a Beachwood, Ohio-based real estate investment trust that owns, develops, leases and manages shopping centers.

Ascension Health reopens

Ascension Health Alliance priced an upsized $225 million add-on to its 3.945% senior notes due Nov. 15, 2046 (Aa2/AA+) on Tuesday at a spread of 112 bps over Treasuries, according to a market source.

The deal was upsized by $5 million.

Morgan Stanley was the bookrunner.

The company originally sold $700 million of the bonds on April 26, 2016 at spread of Treasuries plus 122 bps. The total outstanding is $925 million.

Ascension Health is a St. Louis-based nonprofit health care system.

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