Bayer prices $15 billion; Duke Energy Florida sells $1 billion; Walmart deal in focus

By Cristal Cody

Tupelo, Miss., June 18 – Bayer AG tapped the high-grade primary market on Monday with a $15 billion eight-part Rule 144A and Regulation S offering of senior notes.

The company held three days of fixed-income investor calls that ended Friday for the deal.

Bayer closed June 7 on its $63 billion acquisition of Monsanto Co.

Duke Energy Florida, LLC also priced a $1 billion two-part offering of first mortgage bonds.

Prospect Capital Corp. placed an upsized $70 million add-on to its 5.875% senior notes (/BBB-//Kroll: BBB) due March 15, 2023 on Monday.

About $35 billion to as much as $50 billion of volume, including Bayer’s deal, is forecast for the week, according to syndicate sources.

Walmart Inc. is expected in the immediate horizon with a bond deal following fixed-income investor calls held on Monday, according to a market source.

Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

The mid-June week typically is slow with just $15 billion of average issuance since 2011 but higher-than-average volume is expected this week because of deal-related debt financing, BofA Merrill Lynch analysts said in a note released Monday.

The Markit CDX North American Investment Grade 30 index ended the day modestly softer at a spread of 61 basis points.

Bayer sells eight tranches

Bayer US Finance II LLC (Baa1/BBB/A-) priced $15 billion of senior notes in eight tranches in the Rule 144A and Regulation S offering on Monday, according to a market source.

The company sold $1.25 billion of three-year floating-rate notes at Libor plus 63 bps.

The $1.25 billion tranche of 3.50% three-year fixed-rate notes priced with a spread of Treasuries plus 85 bps.

Bayer priced $1.25 billion of five-year floating-rate notes at Libor plus 101 bps.

The company sold $2.25 billion of 3.875% five-year fixed-rate notes with a spread of 115 bps over Treasuries.

In a seven-year tranche, Bayer priced $2.5 billion of 4.25% notes with a Treasuries plus 140 bps spread.

The $3.5 billion of 4.375% 10-year notes were sold with a spread of 155 bps over Treasuries.

Bayer placed $1 billion of 4.625% 20-year notes at a 170 bps over Treasuries spread.

In the final tranche, the company priced $2 billion of 4.875% 30-year notes with a spread of 185 bps over Treasuries.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc. and J.P. Morgan Securities were the bookrunners.

The health care and agriculture products company is based in Leverkusen, Germany.

Duke Energy Florida prices

Duke Energy Florida sold $1 billion of first mortgage bonds (A1/A/) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

The $600 million tranche of 3.80% 10-year bonds priced at 99.815 to yield 3.822% and a spread of 90 bps over Treasuries.

Duke Energy Florida sold $400 million of 4.20% 30-year bonds at 99.861 to yield 4.208%. The bonds priced with a Treasuries plus 115 bps spread.

Barclays, BNP Paribas Securities Corp., PNC Capital Markets LLC, SMBC Nikko Securities America, Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners.

The public utility is based in St. Petersburg, Fla., and is a subsidiary of Duke Energy Corp.

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