Kroger, AvalonBay, Air Lease, Southwest Gas price; Hercules markets; credit spreads widen

By Cristal Cody

Eureka Springs, Ark., Sept. 26 – Several high-grade issuers including Kroger Co. tapped the primary market on Monday despite a rough market tone that kept some companies on the sidelines, according to market sources.

Kroger sold $1.75 billion of senior notes (Baa1/BBB/BBB) in three tranches, according to an FWP filing with the Securities and Exchange Commission.

The grocer sold $500 million of 1.5% three-year notes at 99.951 to yield 1.517% and a spread of 65 basis points plus Treasuries.

Kroger priced $750 million of 2.65% 10-year notes at 99.676 to yield 2.687%. The notes were sold with a spread of 110 bps over Treasuries.

The $500 million tranche of 3.875% 30-year notes priced at 99.963 to yield 3.877%, or Treasuries plus 155 bps.

AvalonBay Communities, Inc. priced $650 million of medium-term notes in two parts.

Air Lease Corp. raised $500 million in an offering of senior notes due Jan. 15, 2020.

Southwestern Electric Power Co. priced $400 million of 10-year notes.

Southwest Gas Corp. sold $300 million of 30-year senior notes on Monday.

In other activity, Hercules Capital, Inc. announced plans to kick off a three-day roadshow on Tuesday.

The Markit CDX North American Investment Grade index closed the session 2 bps weaker at a spread of 79 bps.

Shire Acquisitions Investments Ireland DAC’s 3.2% senior notes due 2026 priced last week firmed about 1 bp in secondary trading earlier in the day.

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