Prologis, Black & Decker, KeyCorp, Citizens tap high-grade primary; energy, bank issues mixed

By Cristal Cody

Tupelo, Miss., Feb. 3 – Several issuers tapped the high-grade primary market on Monday, led by a $2.2 billion three-part offering from Prologis, LP to help finance its merger with Liberty Property LP.

Stanley Black & Decker, Inc. priced $1.5 billion of notes in two tranches.

The Federation des caisses Desjardins du Quebec brought $1 billion of five-year notes following a roadshow in January.

KeyCorp sold $800 million of seven-year senior medium-term notes.

Discover Bank priced $500 million of 10-year senior notes.

Also, Citizens Financial Group, Inc. sold $300 million of 10-year senior notes.

About $15 billion to $20 billion of new investment-grade issuance is expected this week, according to syndicate sources.

Deal volume for the month is expected to total about $90 billion to $100 billion.

The Markit CDX North American Investment Grade 33 index improved more than 1 basis point to end Monday at a spread of 49.4 bps.

In the secondary market, Union Pacific Corp.’s 2.4% senior notes due Feb. 5, 2030 priced last week were mostly unchanged but improved from Friday.

Energy bonds priced earlier in January from Energy Transfer Operating LP and Western Midstream Operating, LP traded modestly better on the day.

Occidental Petroleum Corp.’s 3.5% senior notes due Aug. 15, 2029 (Baa3/A/) priced as part of a $13 billion 10-tranche offering last year firmed about 5 bps to 160 bps bid, according to a market source.

The Los Angeles oil and gas, chemical and midstream company sold $1.5 billion of the notes on Aug. 1 at a Treasuries plus 185 bps spread.

Bank and financial paper were mixed.

Morgan Stanley’s new 2.699% fixed-to-floating-rate notes due Jan. 22, 2031 tightened 4 bps during the session.

Prologis brings $2.2 billion

Prologis priced $2.2 billion of fixed-rate notes (A3/A-) in three parts on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $500 million tranche of 2.125% seven-year notes priced at 99.833 to yield 2.15% and with a spread of 70 bps over Treasuries.

Initial price talk was in the 95 bps spread area.

The company sold $1 billion of 2.25% 10-year notes at a Treasuries plus 80 bps spread, compared to initial talk in the 105 bps spread area. The issue priced at 99.331 to yield 2.324%.

In the final tranche, $700 million of 3% 30-year notes priced at 98.936 to yield 3.054%, or a 105 bps over Treasuries spread.

The notes were initially talked to price with a 130 bps area spread.

J.P. Morgan Securities, LLC, SMBC Nikko Securities America, Inc., Wells Fargo Securities LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc. were the bookrunners.

The 2027 and 2050 notes have mandatory calls if the company does not complete its merger with Liberty Property on or before Aug. 1, 2020 at 101%.

The logistics real estate company is based in San Francisco.

Stanley Black & Decker prices

Stanley Black & Decker priced $1.5 billion of notes in two tranches on Monday, according to a market source and FWP filings.

A $750 million tranche of 2.3% 10-year notes (Baa1/A/A-) priced at 99.667 to yield 2.337%, or a spread of 82 bps over Treasuries.

Price guidance on the notes was in the Treasuries plus 100 bps area.

Stanley Black & Decker sold $750 million of fixed-to-fixed reset rate junior subordinated debentures due March 15, 2060 (Baa2/BBB+/BBB) at par to yield 4%.

The rate on the debentures will reset March 15, 2025 to but excluding the final maturity to a rate of Treasuries plus 265.7 bps.

Initial price talk was at the 4.375% area.

BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan and Wells Fargo were the bookrunners.

Stanley Black & Decker is a New Britain, Conn.-based maker of hand tools, power tools and accessories.

Federation des caisses prints

The Federation des caisses Desjardins du Quebec (Aa2/A+/AA-) priced a $1 billion offering of 2.05% five-year notes on Monday at a spread of 73 bps over Treasuries, according to a market source.

Initial price talk was in the 90 bps spread area.

BNP Paribas Securities Corp., Citigroup, Goldman Sachs & Co. LLC and RBC Capital Markets LLC were the bookrunners.

A roadshow was held in January.

The Federation is a Montreal-based organization that supports the Desjardins caisses.

KeyCorp taps primary

KeyCorp priced $800 million of 2.25% seven-year senior medium-term notes (Baa1/BBB+/A-) on Monday at 99.879 to yield 2.268% and a spread of Treasuries plus 82 bps, according to a market source and an FWP filing.

Initial price talk was in the 100 bps over Treasuries spread area.

KeyBanc Capital Markets Inc., BofA Securities, Goldman Sachs and Morgan Stanley & Co. LLC were the bookrunners.

Cleveland, Ohio-based KeyCorp is a bank holding company for regional bank KeyBank.

Discover Bank prices $500 million

Discover Bank sold $500 million of 2.7% 10-year senior notes (Baa2/BBB/BBB+) at a spread of 120 bps over Treasuries on Monday, according to a market source.

Initial talk was in the Treasuries plus 135 bps area.

Barclays, Citigroup and RBC Capital Markets were the lead managers.

Discover Bank is a banking and payment services company based in Riverwoods, Ill.

Citizens Financial sells notes

Citizens Financial Group priced $300 million of 2.5% 10-year senior notes on Monday at a spread of 100 bps over Treasuries, according to a market source.

The notes were initially talked to price with a spread in the 115 bps to 120 bps area.

Barclays, Credit Suisse, J.P. Morgan, Morgan Stanley and Citizens Capital Markets, Inc. were the bookrunners.

The banking and financial services company is based in Providence, R.I.

Union Pacific steady

Union Pacific’s new 2.4% notes due Feb. 5, 2030 (Baa1/A-/) were flat at 78 bps area, a market source said.

The notes were seen Friday at 83 bps bid, 80 bps offered in secondary trading.

Union Pacific sold $750 million of the 10-year notes on Tuesday at a Treasuries plus 80 bps spread.

The tranche was initially talked to price in the 95 bps to 100 bps area.

The railroad transportation company is based in Omaha.

Energy Transfer tightens

Energy Transfer Operating’s 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) firmed more than 5 bps to the 197 bps bid area on Monday, according to a market source.

The company sold $1.5 billion of the long 10-year notes on Jan. 7 at a Treasuries plus 255 bps spread, compared to initial guidance in the 212.5 bps over Treasuries area.

Energy Transfer is a natural gas midstream and intrastate transportation and storage company based in Dallas.

Western Midstream improves

Western Midstream Operating’s 4.05% notes due Feb. 1, 2030 (Ba1/BBB-/BBB-) improved about 5 bps in secondary trading to the 255 bps bid area, a market source said.

The notes priced in a $1.2 billion tranche on Jan. 9 at a spread of 220 bps over Treasuries.

Initial guidance was in the 250 bps to 262.5 bps area.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets.

Morgan Stanley firms

Morgan Stanley’s 2.699% fixed-to-floating-rate notes due Jan. 22, 2031 traded 4 bps better at 97 bps bid in the secondary market on Monday, a source said.

Morgan Stanley (A3/BBB+/A) sold $3.5 billion of the notes on Jan. 16 at par to yield a spread of Treasuries plus 90 bps.

The notes convert Jan. 22, 2030 to a floating rate of SOFR plus 114.3 bps to but excluding the final maturity date.

Morgan Stanley is a New York-based financial products and services company.

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