Quebec sells upsized notes; Kraft Heinz tightens; AT&T, Burlington Northern improve

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 28 – The Province of Quebec sold an upsized $700 million issue of three-year floaters to close a quiet week for the investment-grade primary market on Friday.

The offering priced in line with talk.

The session’s lone new issue brings the week’s total supply to $4.55 billion.

Also on Friday, Automatic Data Processing Inc. announced plans to bring a $2 billion debt offering to market.

Meantime, corporate investment-grade bond funds saw their fifth-straight week of outflows.

This week’s $1.99 billion of outflows follows last week’s outflows of $1.1 billion and brings the year-to-date total to $23.2 billion of inflows.

Bonds were mixed over the session.

Kraft Heinz Co.’s 3.95% notes due 2025 firmed 10 basis points in secondary trading on Friday.

AT&T Inc.’s 3.4% notes due 2025 continued to tighten over the session.

Burlington Northern Santa Fe LLC’s debentures (A3/BBB+) that priced earlier in the month traded about 1 bp to 5 bps tighter.

Ford Motor Credit Co. LLC’s 4.134% senior notes due 2025 were unchanged over the day.

Xerox Corp.’s 3.5% senior notes due 2020 headed out flat.

The Markit CDX North American Investment Grade index eased about 1 bp to a spread of 80 bps.

Quebec new issue

Quebec priced an upsized $700 million of floating-rate medium-term global notes, series A, at par to yield Libor plus 23 bps on Friday, according to a market source.

The deal was upsized from $250 million and priced in line with talk.

BofA Merrill Lynch, BMO Capital, J.P. Morgan Securities LLC and RBC Capital Markets LLC are the bookrunners.

ADP plans debt

Automatic Data Processing said it plans to price a public offering of $2 billion of debt securities subject to market and business conditions, according to a company press release.

Contingent upon the offering’s completion, the board of directors authorized the purchase of 25 million shares of its common stock. ADP anticipates that the share repurchases will be completed within a 12- to 24-month time period following the debt offering.

The company provides business outsourcing and computing services to automobile and heavy equipment dealers. The company is based in Roseland, N.J.

Kraft Heinz tightens

Over the afternoon, the tranche of 3.95% notes due 2025 from Kraft Heinz tightened 10 bps in the secondary market, a source said.

Heinz sold $2 billion of the notes (Baa3/BBB-) at Treasuries plus 155 bps on June 23 before it merged with Kraft in July.

The combined food and beverage company is based in Pittsburgh and Northfield, Ill.

AT&T firms over day

AT&T’s 3.4% notes due 2025 headed out tighter at 176 bps bid in the secondary market, a source said.

The notes were quoted earlier in the day at 182 bps offered and traded late Thursday at 187 bps bid.

AT&T sold $5 billion of the notes (/BBB+/A-) on April 23 at 150 bps over Treasuries.

The telecommunications company is based in Dallas.

Burlington Northern firms

Burlington Northern’s 3.65% debentures due 2025 tightened 5 bps to 145 bps bid on Friday, a source said.

The company sold $350 million of the bonds at a spread of Treasuries plus 148 bps on Aug. 13.

Burlington Northern’s 4.7% bonds due 2045 traded about 1 bp tighter at 177 bps bid.

The bonds priced in a $650 million tranche at Treasuries plus 185 bps in the Aug. 13 offering.

Burlington Northern Santa Fe is a holding company for railroad transportation subsidiaries based in Fort Worth, Texas.

Ford Motor Credit flat

Ford Motor Credit’s 4.134% notes due 2025 were unchanged on Friday at 208 bps bid, a market source said.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on July 30 at a spread of Treasuries plus 187.5 bps.

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

Xerox stable

The 3.5% senior notes due 2020 that Xerox priced traded flat on Friday at 201 bps bid, according to a market source.

The company sold $400 million of the notes (Baa2/BBB/BBB) on Aug. 17 at a spread of Treasuries plus 212.5 bps.

The maker of office machines is based in Norwalk, Conn.

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