Bank of Tokyo Mitsubishi, Agrium, Juniper among issuers; Apple firms; financial paper soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 25 – Bank of Tokyo Mitsubishi UFJ, JPMorgan Chase & Co., Agrium Inc., Juniper Networks, Inc. and Nederlandse Waterschapsbank NV sold bonds during another busy session for the investment-grade bond market.

New deals entering the market continued to receive tremendous demand from investors.

Bank of Tokyo Mitsubishi attracted an orderbook that was nearly three times oversubscribed for its new $3 billion offering of notes, which priced in three tranches during the session.

JPMorgan Chase was also in the market on Wednesday, pricing $2.5 billion of senior holdco notes in two parts.

Nederlandse Waterschapsbank priced a $1 billion offering of 1.625% five-year notes at the tight end of talk.

Also on Wednesday, Canada’s Agrium offered $1 billion of debentures in two maturities.

The deal’s orderbook was more than five times oversubscribed.

There was also a $600 million two-part issue of notes priced by Juniper Networks on Wednesday.

Both tranches of the new issue sold at the tight end of price talk.

The session also saw Magellan Midstream Partners, LP issue $500 million of notes in two parts, Discovery Communications LLC issue $300 million of 10-year senior notes, and the Kingdom of Belgium price $2 billion of three-year bonds.

In the preferred market, American Express Co. sold $850 million of $1,000-par noncumulative perpetual preferred stock.

“Everything was very strong again today,” a market source said.

In total, around $10.9 billion of new issuance sold during the active session, pushing the week’s total new issuance to $28.9 billion.

In the Canadian primary market, Caisse centrale Desjardins sold C$1.5 billion of 1.748% five-year deposit notes at par on Wednesday, according to a market source.

The notes due March 2, 2020 (Aa2/A+/DBRS: AA) priced with a spread of 98 bps over the Government of Canada benchmark.

Desjardins Securities Inc. was the bookrunner.

Caisse centrale Desjardins is the treasury arm of financial services cooperative Desjardins Group.

Royal Bank of Canada also sold C$1.5 billion of senior deposit notes during the session following the bank’s first-quarter earnings release on Wednesday, sources said. Final pricing details were not available by press time.

“The market has been anticipating bank issuance as we come out of earnings,” one informed source said.

Investment-grade bonds were mixed over the session, sources said on Wednesday afternoon.

The Markit CDX North American Investment Grade index edged less than 1 basis point tighter to a spread of 62 bps.

“The CDX investment-grade index has tightened roughly 60 bps since it’s mid-January wides, with 20 bps of that occurring over the last week,” RBC Capital Markets LLC analysts said in a market note on Wednesday.

Apple Inc.’s 2.5% senior notes due 2025 traded 4 bps tighter over the session.

General Electric Capital Corp.’s 2.2% senior notes due 2020 headed out 2 bps softer.

Morgan Stanley’s 2.65% senior notes due 2020 eased 2 bps in secondary trading.

BTM new issue

Bank of Tokyo Mitsubishi priced $3 billion of senior notes (A1/A+/) in three parts on Wednesday, a market source said.

There was $500 million of floating-rate notes priced at Libor plus 55 bps.

The notes were talked at the Libor equivalent to the three-year fixed-rate notes.

The $1 billion tranche of 1.7% three-year notes sold at 77 bps over Treasuries.

Pricing was at the tight end of the 80 bps area over Treasuries talk, which had tightened from 90 bps to 95 bps over Treasuries.

Finally, $1.5 billion of 2.3% five-year notes priced with a spread of Treasuries plus 87 bps.

The notes sold at the tight end of the 90 bps area talk. Talk had firmed from 100 bps to 105 bps over Treasuries.

The bookrunners were Morgan Stanley & Co. LLC, MUFG, BofA Merrill Lynch and Citigroup Global Markets Inc.

The sale was done via Rule 144A and Regulation S.

The retail and commercial banking arm of Mitsubishi UFJ Financial Group is based in Tokyo.

JPMorgan holdco notes

JPMorgan Chase priced $2.5 billion of senior holdco notes (A3/A/A+) in two parts due March 1, 2018 on Wednesday, according to a market source.

The sale included $250 million of three-year floaters priced at par to yield Libor plus 51 bps.

There was also a $2.25 billion tranche of 1.7% three-year notes sold at 99.974 to yield 1.809%, or 73 bps over Treasuries.

The notes sold at the tight end of price talk, which was set at the 75 bps area over Treasuries. The floating-rate notes were talked at the Libor equivalent.

Proceeds will be used for general corporate purposes.

J.P. Morgan & Co. LLC was the bookrunner.

The financial services company is based in New York City.

NWB Bank prices tight

Nederlandse Waterschapsbank sold $1 billion of 1.625% five-year notes (Aaa/AA+/) on Wednesday at mid-swaps plus 10 bps, an informed source said.

The notes were guided in the mid-swaps plus 11 bps area.

Barclays, HSBC Securities and RBS Securities Inc. were the joint bookrunners.

The notes will be sold via Rule 144A and Regulation S.

The financial services company for the public sector is based in the Hague, the Netherlands.

Agrium debentures

Agrium priced $1 billion of debentures (Baa2/BBB/) in two tranches on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

A $550 million tranche of 3.375% 10-year notes priced at 99.855 to yield 3.392%, or Treasuries plus 142 bps.

The notes sold at the tight end of talk set in the Treasuries plus 145 bps area, which tightened from guidance set at 160 bps to 165 bps over Treasuries.

A second tranche was $450 million of 4.125% 20-year bonds priced with a spread of Treasuries plus 162 bps. Pricing was at 99.11 to yield 4.191%.

The notes sold at the tight end of the 165 bps area talk after having tightened from guidance in the 180 bps area.

BofA Merrill Lynch, RBC Capital Markets LLC and CIBC World Markets Corp. were the bookrunners.

Proceeds will be used to reduce short-term debt.

The retailer of agricultural products is based in Calgary, Alta.

Belgium new issue

The Kingdom of Belgium sold $2 billion of 1.125% three-year bonds at a spread of mid-swaps plus 1 bp on Wednesday, a market source said.

The sale was done in line with guidance.

The notes (Aa3/AA/AA) were priced at 99.758 to yield 1.204%.

Barclays, Citigroup Global Markets and HSBC Securities were the bookrunners.

Juniper two-parter

Juniper Networks priced $600 million of senior notes (Baa2/BBB/) in tranches due 2020 and 2025 on Wednesday, according to a syndicate source.

A $300 million tranche of 3.3% five-year notes priced at 99.965 to yield 3.308%, or Treasuries plus 185 bps.

The notes priced at the tight end of talk set in the 190 bps area over Treasuries.

A second tranche was $300 million of 4.35% 10-year notes priced at Treasuries plus 240 bps. Pricing was at 99.883 to yield 4.365%.

The notes sold at the tight end of price talk, which was set in the area of Treasuries plus 140 bps.

Barclays, BofA Merrill Lynch and Citigroup Global Markets are the joint bookrunners, with BNP Paribas Securities Corp., Goldman Sachs & Co., JPMorgan, Morgan Stanley and Wells Fargo Securities LLC as lead managers.

Proceeds are being used for general corporate purposes.

The network designer and developer is based in Sunnyvale, Calif.

Magellan Midstream new issue

Magellan Midstream Partners priced $500 million of senior notes (Baa1/BBB+/) in tranches due 2025 and 2045 on Wednesday, according to a market source and an FWP filed with the SEC.

The sale included $250 million of 3.2% 10-year notes priced at 99.871 to yield 3.215%, or Treasuries plus 125 bps.

The notes sold at the tight end of price talk set in the 130 bps area, which tightened from guidance in the 145 bps area.

A second tranche was $250 million of 4.2% 30-year bonds priced at 99.965 to yield 4.202%, or 165 bps over Treasuries.

Pricing was at the tight end of the 170 bps area talk, which had firmed from price guidance set in the 185 bps area.

JPMorgan, Citigroup Global Markets, RBC Capital Markets and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds will be used for general partnership purposes and to repay borrowings outstanding under the company’s revolving credit facility and commercial paper program.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

Discovery prices tight

Discovery Communications priced $300 million of 3.45% 10-year senior notes (Baa2/BBB/BBB) on Wednesday at Treasuries plus 150 bps, according to a market source and an FWP filing with the SEC.

Pricing was at 99.915 to yield 3.46%.

The notes sold at the tight end of price talk set in the 155 bps area. Guidance was set at Treasuries plus 165 bps to 170 bps.

JPMorgan, Citigroup Global Markets, RBS Securities, BNP Paribas Securities, Goldman Sachs and Wells Fargo Securities were the bookrunners.

Proceeds will be used to repay a portion of the company’s 3.7% senior notes due June 2015 and for general corporate purposes, including the acquisition of other companies or businesses, repayment and refinancing of debt, working capital, capital expenditures and the repurchase of its capital stock

The notes are guaranteed by Discovery Communications, Inc.

The global media company is based in Silver Spring, Md.

AmEx preferreds

American Express priced $850 million of 4.9% $1,000-par series C fixed-to-floating-rate noncumulative perpetual preferred stock (expected ratings: Baa3/BB+/BBB-), a market source reported on Wednesday.

The preferreds will be issued as depositary shares representing a 1/1,000th interest.

Barclays, Citigroup Global Markets, Credit Suisse Securities (USA) LLC, RBC Capital Markets and Wells Fargo Securities are the joint bookrunning managers.

The dividend will be fixed until March 15, 2020, at which time it will begin floating at Libor plus 328.5 bps. While fixed, the dividend will be paid semiannually and then quarterly once floating.

The preferreds become redeemable at par plus accrued dividends on March 15, 2020. The shares can also be redeemed in whole within 90 days of a regulatory capital treatment event.

The securities will not be listed on any exchange.

Proceeds will be used for general corporate purposes.

American Express is a New York-based credit card company.

Apple firms

Apple’s 2.5% notes due 2025 tightened 4 bps to 68 bps bid, a market source said.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at a spread of Treasuries plus 85 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

GE Capital eases

General Electric Capital’s 2.2% notes due 2020 traded 2 bps softer at 49 bps bid, according to a market source.

The company sold $2 billion of the notes (A1/AA+/) on Jan. 6 at Treasuries plus 75 bps.

The funding arm of General Electric Co. is based in Fairfield, Conn.

Morgan Stanley

Morgan Stanley’s 2.65% notes due 2020 eased 2 bps over the day to 95 bps bid, a market source said.

Morgan Stanley sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 22 at Treasuries plus 130 bps.

The financial services company is based in New York City.

Stephanie N. Rotondo contributed to this review.

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