Morning Commentary: Progressive eyes notes; John Deere sells $1.5 billion; Transco prices

By Devika Patel

Knoxville, Tenn., March 9 – Friday saw a moderate amount of primary activity in the investment-grade bond market, with one new deal announced and terms emerging on three pricings.

Mayfield Village, Ohio, insurance company Progressive Corp. announced a sale of senior notes; Moline, Ill.-based farm equipment supplier John Deere Capital Corp. revealed pricing for $1.5 billion of fixed- and floating-rate notes in three tranches; Tulsa, Okla., natural gas transmission company Transcontinental Gas Pipe Line Co. LLC said it sold $1 billion notes of fixed-rate senior notes in two tranches; Warsaw, Ind., Norwood, Mass., maker of circuits for electronic equipment Analog Devices, Inc. disclosed the terms of its $750 million of senior notes in two tranches; and Scottsdale, Ariz., real estate investment trust Store Capital Corp. released details on its $350 million of 4.5% senior notes due 2028.

Progressive intends to price an offering of senior notes. The notes have a make-whole call and are then redeemable at par.

The bookrunners are Credit Suisse Securities (USA) LLC and Goldman Sachs & Co.

Proceeds will be used for general corporate purposes.

John Deere sold $1.5 billion of fixed- and floating-rate notes (A2/A/A) in three tranches.

John Deere priced $500 million of three-year floating-rate notes at par to yield Libor plus 24 basis points.

The company also sold $400 million of 2.875% three-year fixed-rate notes at 48 bps over Treasuries.

And it priced $600 million of 3.45% seven-year fixed-rate notes at 67 bps over Treasuries.

Barclays, Goldman Sachs & Co. and MUFG were the bookrunners.

Transcontinental Gas priced a $1 billion offering of fixed-rate senior notes in two tranches.

The company sold $400 million of 10-year 4% notes at 99.446 to yield 4.068%.

There was $600 million of 30-year 4.6% notes which priced at 99.276 to yield 4.645%.

Proceeds will be to repay debt, including Transco’s $250 million of 6.05% senior notes due 2018 upon their maturity on June 15, 2018, and for general corporate purposes.

Analog Devices sold $750 million of senior notes (Baa1/BBB/) in two tranches.

The company sold $300 million of 2.85% two-year notes at a spread of 70 bps over Treasuries.

It also priced $450 million of 2.95% notes, also at 70 bps over Treasuries.

BofA Merrill Lynch, MUFG, SMBC Nikko Securities America, Inc. and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to repay a portion of the borrowings under the company’s five-year term loan.

Store Capital priced a $350 million sale of 4.5% senior notes due 2028 at 99.515 with a spread of Treasuries plus 170 bps to yield 4.561%.

Goldman Sachs & Co., Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, Citigroup, J.P. Morgan, KeyBanc Capital Markets and SunTrust Robinson Humphrey were the bookrunners.

Proceeds will be used for property acquisitions, to repay debt under the company’s unsecured revolving credit facility, for working capital and for other general corporate purposes.

© 2015 Prospect News.
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