Parker-Hannifin, LyondellBasell, Manulife price; Bank of England markets; Goldman softens

By Cristal Cody

Tupelo, Miss., Feb. 21 – Parker-Hannifin Corp. tapped the investment-grade primary market on Tuesday with a $1.3 billion offering of senior notes following the company’s roadshow the previous week.

Also on Tuesday, LyondellBasell Industries NV subsidiary LYB International Finance II BV sold $1 billion of 10-year guaranteed notes.

Manulife Financial Corp. placed $750 million of 15-year subordinated notes.

Coming up in new supply, the Bank of England is in the deal pipeline with an offering of three-year dollar-denominated notes.

The Markit CDX North American Investment Grade index firmed 1 basis point to a spread of 62 bps on Tuesday.

In the secondary market, Goldman Sachs Group Inc.’s 3.85% notes due Jan. 26, 2027 remained weak on the day.

Parker-Hannifin prices

Parker-Hannifin priced $1.3 billion of dollar senior notes (Baa1/A/A-) in two tranches in a private offering on Tuesday, according to a market source and a news release.

The $700 million tranche of 3.25% 10-year notes priced with a spread of 83 bps over Treasuries.

The company sold $600 million of 4.1% 30-year notes at a Treasuries plus 108 bps spread.

Both tranches priced on the tight side of guidance.

Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC were the active bookrunners of the Rule 144A and Regulation S offering.

Also on Tuesday, Parker-Hannifin priced €700 million of 1.125% senior notes due 2025.

The deals follow a roadshow held in the U.S. and Europe markets the previous week.

Proceeds from the transactions will be used to finance a portion of the company’s acquisition of Clarcor, Inc.

The notes will be subject to a special mandatory redemption at 101.00 if the deal is not completed on or before Dec. 1, 2017.

Parker-Hannifin is a Cleveland-based manufacturer of motion and control technologies.

LyondellBasell sells $1 billion

LyondellBasell Industries subsidiary LYB International Finance II sold $1 billion of 3.5% 10-year guaranteed notes on Tuesday at 98.968 to yield 3.624%, according a market source and an FWP filing with the Securities and Exchange Commission.

The notes due March 2, 2027 (Baa1/BBB) priced on the tight side of guidance at a spread of 120 bps over Treasuries.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc., and Wells Fargo Securities, LLC were the bookrunners.

The issue is guaranteed by the parent company.

Proceeds will be used redeem or repay $1 billion of the company’s 5% senior notes due April 15, 2019.

LyondellBasell Industries is a Houston-based chemical company with executive offices in London and incorporated in the Netherlands.

Manulife brings $750 million

Manulife Financial sold $750 million of 4.061% subordinated notes due Feb. 24, 2032 at par to yield a spread of 163 bps over Treasuries on Tuesday, according to a market source and an FWP filing with the SEC.

The notes (/A-/BBB+) came on the tight side of talk at Treasuries plus 165 bps area, plus or minus 2 bps.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the lead managers.

The rate will reset on the notes from Feb. 24, 2027 to but excluding Feb. 24, 2032 at a rate per year equal to five-year mid-swaps plus 164.7 bps.

The financial services and reinsurance company is based in Toronto.

Bank of England in pipeline

The Bank of England (Aa1/AA/AA) is expected to price an offering of three-year dollar-denominated notes in a Rule 144A and Regulation S transaction soon, according to a source on Tuesday.

BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman, Sachs & Co. and HSBC Securities (USA) Inc. are the lead managers.

London-based Bank of England is the central bank of the United Kingdom.

Goldman softens

Goldman Sachs’ 3.85% notes due Jan. 26, 2027 remained soft on the day at 100.59 in the secondary market on Tuesday from where the paper went out on Friday at 102.88, according to a market source.

Goldman Sachs sold $1.25 billion of the 10-year notes (A3/A/) in a reopening on Feb. 13 at 100.146 to yield 3.832% and a spread of Treasuries plus 140 bps.

The company originally sold $1.75 billion of the 10-year notes on Jan. 23 at 99.72 to yield 3.884%, or Treasuries plus 148 bps.

The banking, securities and investment management company is based in New York.

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