Welltower prices add-on; Tokyo’s Meiji Yasuda Life sets roadshow; Kraft Heinz firms

By Aleesia Forni

Virginia Beach, Oct. 9 – Welltower Inc. sold a $500 million add-on of notes and Meiji Yasuda Life Insurance Co. announced new deal plans on Friday, closing out a busier-than-expected week for the primary.

The market hosted more than $27 billion of new issuance, blowing away earlier expectations of a $15 billion week.

Meantime, corporate investment-grade bond funds saw $941 million of outflows for the week ended Oct. 7, according to Lipper, following last week’s $3.17 billion of outflows, and bringing the year-to-date total inflows down to $12.5 billion.

Even with a murky outlook and earnings season underway, sources predict around $20 billion of supply to price next week following the extended Columbus Day-holiday weekend.

“We’re expecting a lot of that number to come from financials,” one market source said.

The week ahead is scheduled to see earnings from a number of large financial institutions including JPMorgan, Bank of America, Wells Fargo and Citigroup, all of which have the potential to bring new deals to market following their respective releases.

“Things went fairly well this week, so we should see some deals get done,” a market source added.

Secondary trading thinned ahead of the long holiday weekend with bonds mixed over the session, sources said.

Kraft Heinz Co.’s 3.95% notes due 2025 (Baa3/BBB-) tightened 7 basis points on Friday.

McDonald’s Corp.’s senior notes (A3/A-/BBB+) were mixed and remain weaker than issuance.

“Despite the recent move, investment-grade spreads are once again trading near year-to-date wides,” Barclays Bank plc analysts said in a note on Friday.

“Since the beginning of the sell-off in the latter half of 2014, the basis between BBBs and As has increased from 45 to 90 [bps],” according to the note. “Most of this increase has come since June, when the basis was about 60 [bps].”

Elsewhere, Hershey Co.’s 3.2% notes due 2025 were unchanged in the secondary market.

The Markit CDX North American Investment Grade 25 index ended the day mostly flat at a spread of 81 bps.

Welltower adds-on

Welltower, formerly known as Health Care REIT Inc., sold a $500 million add-on to its existing 4% notes due June 1, 2025 on Friday at Treasuries plus 217.6 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes (Baa2/BBB/BBB+) sold at 97.75 to yield 4.287%.

BofA Merrill Lynch is the bookrunner.

Proceeds will be used to repay advances under the company’s unsecured credit facility and for general corporate purposes.

The original $750 million issue sold at Treasuries plus 177 bps on May 20.

The Toledo, Ohio-based real estate investment trust invests in senior housing and health care real estate.

Meiji roadshow

In forward calendar news, Meiji Yasuda Life Insurance is planning to price an offering of 30-year subordinated notes, according to a market source.

J.P. Morgan Securities LLC and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The notes will be non-callable for 10 years.

The insurance services company is based in Tokyo.

Kraft Heinz stronger

Kraft Heinz’s 3.95% notes due 2025 tightened 7 bps on Friday to 147 bps bid, a market source said.

The issue priced in a $2 billion offering on June 23 at 155 bps over Treasuries.

Heinz merged with Kraft in July and the combined food and beverage company is based in Pittsburgh and Northfield, Ill.

McDonald’s mixed

McDonald’s 2.2% notes due 2020 traded about 1 bp softer at 90 bps bid on Friday, a source said.

The company sold $700 million of the notes on May 18 at Treasuries plus 70 bps.

The tranche of 4.6% notes due 2045 firmed 4 bps in secondary trading to 162 bps bid.

McDonald’s sold $600 million of the notes in the May 18 offering at Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

Hershey unchanged

Hershey’s 3.2% notes due 2025 were unchanged on Friday at 95 bps bid, a market source said.

Hershey sold $300 million of the notes (A1/A) on Aug. 18 at a spread of Treasuries plus 105 bps.

The chocolate, candy and confectionary product maker is based in Hershey, Pa.

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