Rogers, Nexa tap primary market; PG&E to bring $5.93 billion bonds; Upjohn starts deal calls

By Cristal Cody

Tupelo, Miss., June 15 – The high-grade primary market stayed fairly quiet on Monday, while the deal pipeline is growing.

Rogers Communications Inc. priced $750 million of floating-rate senior notes due March 22, 2022 (Baa1/BBB+/BBB+) during the session.

Also, Luxembourg-based South American mineral mining and resources producer Nexa Resources SA (Ba2/BB+/BBB-) sold $500 million of split-rated senior notes due Jan. 28, 2028.

Meanwhile, Pacific Gas and Electric Co. is expected to price a $5,925,000,000 offering of first mortgage bonds (Baa3/BBB-/BBB-) in six tranches this week.

Global fixed income investor calls were held on Monday and expected to continue on Wednesday.

Parent company PG&E Corp. also intends to bring $3.75 billion of high-yield senior notes (B1/BB-/BB) in three tranches to the primary market on Friday.

Proceeds from all the debt offerings will be held in escrow until the company emerges from bankruptcy.

The high-grade bonds are subject to a mandatory redemption at 101% if Pacific Gas and Electric does not meet the escrow conditions on or before Sept. 9, 2020.

Upjohn Inc. kicked off fixed income investor calls on Monday for about $12 billion of senior notes (Baa3/BBB-/BBB) in multiple tranches as part of its spin-off from Pfizer Inc. and merger with Mylan NV.

Coming up on Tuesday, Kommuninvest I Sverige AB (Aaa/AAA/) intends to price $1 billion of notes due Feb. 16, 2024. Initial price talk is in the mid-swaps plus 22 basis points area.

Later in the week, Ford Foundation is expected to price a $1 billion two-tranche offering of long-dated taxable social bonds (Aaa/AAA/) on Thursday.

About $20 billion to as much as $40 billion of high-grade supply is expected by market participants this week.

High-grade credit spreads came in more than 9 bps over Monday’s session. The Markit CDX North American Investment Grade 33 index closed the day at a spread of 70.35 bps.

In other activity on Monday, the Federal Reserve Board announced updates to the secondary market corporate credit facility created under the Cares Act.

Under the facility, the Federal Reserve Bank of New York will lend to a special purchase vehicle, which will purchase corporate bonds that meet criteria including ratings and maturity to create a corporate bond portfolio based on a broad, diversified market index of U.S. corporate bonds and exchange-traded funds.

The Department of Treasury will make a $75 billion equity investment in the vehicle to support both the primary and secondary facilities.

The initial allocation of the equity will be $50 billion toward the primary market facility and $25 billion toward the secondary market facility. The combined size of both facilities will be up to $750 billion.

The program is set to expire on Sept. 30.

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