Analog Devices plans notes; Zimmer, Sysco, Apollo, Edison International, Arbor price

By Devika Patel

Knoxville, Tenn., March 8 – Thursday brought several primary deals to the investment-grade bond market, with three new deals announced and five deals pricing.

Among the new offerings, Analog Devices, Inc., a Norwood, Mass., maker of circuits for electronic equipment, announced plans to sell senior notes in two tranches.

Meanwhile, Transcontinental Gas Pipe Line Co. LLC, a Tulsa, Okla., interstate natural gas transmission company, said it planned to price senior notes in two tranches, and Scottsdale, Ariz., real estate investment trust Store Capital Corp. expects to price fixed-rate senior notes due 2028.

Also, Zimmer Biomet Holdings, Inc., a Warsaw, Ind., producer of orthopedic reconstructive products, priced fixed-rate and floating-rate notes in two tranches.

Meanwhile, Houston-based food service marketing and distribution company Sysco Corp. priced a combined $1 billion of seven and 30-year senior notes.

New York-based alternative investment manager Apollo Management Holdings, LP priced $300 million of 5% 30-year senior notes, and Uniondale, N.Y.-based real estate investment trust Arbor Realty Trust Inc. sold $100 million of 5.625% five-year senior notes.

In addition, Edison International Inc., the Rosemead, Calif., energy company, priced $400 million of 4.125% 10-year senior notes.

Issuance continued with a new deal from Ottawa-based Canadian government-owned export credit agency Export Development Canada, which priced $1 billion of 2.75% five-year United States Dollar Bonds.

Also, Helsinki, Finland-based credit institution Kommunalbanken AS said its previously priced $500 million add-on to its senior floating-rate notes due March 12, 2021 priced at 100.002 with a book order of more than $550 million.

Zimmer’s notes

Among the new deals, Zimmer sold $750 million of notes (Baa3/BBB+) in two tranches.

The company sold $450 million of three-year floating-rate notes. These notes priced at par with a coupon of Libor plus 75 basis points. Zimmer also sold $300 million of 3.7% five-year notes with a spread of Treasuries plus 110 bps. These notes priced at 99.842 to yield 3.735%.

BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, MUFG, Wells Fargo Securities LLC and SMBC Nikko are the bookrunners.

Proceeds will be used with borrowings under the company’s senior unsecured credit facility and cash on hand to repay at maturity Zimmer’s $1.15 billion of 2% notes due April 1, 2018.

Sysco taps market

Sysco priced a combined $1 billion of seven and 30-year senior notes (A3/BBB+) in two tranches on Thursday, according to an FWP filed with the Securities and Exchange Commission.

The issuer sold $500 million of 3.55% seven-year senior notes (A3/BBB+) at Treasuries plus 85 bps, with pricing at 99.48 to yield 3.635%.

Sysco also priced $500 million of 4.45% 30-year notes at 99.378 to yield 4.488%, or 135 bps over Treasuries.

Goldman Sachs & Co., JPMorgan, TD Securities (USA) LLC and Wells Fargo are the bookrunners.

Proceeds will be used to fund a tender offer to purchase for cash up to $200 million of the company’s 6.625% senior notes due 2039, its 7.16% debentures due 2027, its 6.5% debentures due 2028 and its 5.375% senior notes due 2035.

Edison prices notes

Edison International priced $400 million of 4.125% 10-year senior notes (A3/BBB/A-) with a spread of 128 bps over Treasuries. The notes were sold at 99.845 to yield 4.144%.

Barclays, JPMorgan, Wells Fargo, Morgan Stanley & Co. LLC and TD Securities are the bookrunners.

Proceeds will be used to repay borrowings under the company’s term loan, to repay commercial paper borrowings and for general corporate purposes.

EDC brings $1 billion

Export Development Canada sold $1 billion of 2.75% five-year United States Dollar Bonds (Aaa/AAA) at a spread of 22.45 bps over Treasuries with pricing at 99.56 to yield 2.845%.

Barclays, BNP Paribas Securities Corp., BofA Merrill Lynch and CIBC World Markets Inc. are the bookrunners.

Proceeds will be used for general corporate purposes.

Alberta taps market

The Province of Alberta sold $1.25 billion of 3.3% 10-year bonds at 99.823 to yield 3.321%, with a spread of mid-swaps plus 45 bps.

The bookrunners were BMO Capital Markets Corp., CIBC World Markets, BofA Merrill Lynch and TD Securities.

Apollo brings $300 million

Apollo Management sold $300 million of 5% 30-year senior notes (Baa2/BBB) at a spread of 140 bps over Treasuries, with pricing at 99.892.

BofA Merrill Lynch, Goldman Sachs, Wells Fargo and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds will be used with cash on hand to repay the company’s term loan facility under its credit agreement and for general corporate purposes.

Arbor Realty prices notes

Arbor Realty priced $100 million of 5.625% five-year senior notes at par.

The company said proceeds will be used to fund the redemption of the company’s 7.375% notes due May 15, 2021, to make investments and for general corporate purposes.

Funds on the slide

Investment-grade corporate mutual and exchange-traded funds saw a $740 million net outflow during the week ended Wednesday, March 7, according to sources familiar with the weekly fund-flow statistics generated by AMG Data Services Inc.

That cash loss stood in contrast to the $1.37 billion net inflow those funds had seen last week, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

This week’s outflow was the second seen in the last four weeks by the corporate funds, a relative rarity.

The funds had seen a $1.57 billion inflow during the Feb. 21 week, which had followed a $790 million cash loss during the Feb. 14 week. That outflow had been the first downturn after 21 straight weeks of gains dating back to mid-September, according to a Prospect News analysis of the data.

Those gains had included the $4.73 billion for the seven-day period ended Feb. 7 – the biggest improvement seen so far this year, eclipsing the previous mark of $4.19 billion recorded during the Jan. 10 week, and one of the largest weekly inflows ever recorded for those IG funds.

This week’s funds downturn cuts the estimated year-to-date net inflow figure for the IG corporates to $20.29 billion from last week’s $21.03 billion total, the peak level for the year so far.

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