Gilead sells $5 billion; Freddie Mac, Pitney Bowes, CCL price; credit spreads tighten

By Cristal Cody

Eureka Springs, Ark., Sept. 15 – Investment-grade supply remained heavy on Thursday with about $8 billion of bonds reported sold during the session.

Gilead Sciences Inc. priced $5 billion of senior notes in five tranches.

Freddie Mac sold $2.25 billion of two-year Reference Notes.

Pitney Bowes Inc. raised $600 million in a five-year notes offering.

Ingredion Inc. priced $500 million of 10-year senior notes.

CCL Industries Inc. tapped the U.S. market with a $500 million private placement offering of 10-year notes.

Kite Realty Group, LP sold $300 million of 10-year senior notes on Thursday.

Arizona Public Service Co. sold $250 million of 10-year notes.

Delphi Automotive plc sold $300 million of 30-year senior notes.

Agilent Technologies, Inc. sold $300 million of 10-year senior notes.

The Markit CDX North American Investment Grade index ended about 3 basis points tighter at a spread of 74 bps.

In the secondary market earlier on Thursday, bonds were mostly unchanged.

Thermo Fisher Scientific Inc.’s $1.2 billion offering of 2.95% senior notes due 2026 that priced on Wednesday traded flat to 1 bp tighter than issuance.

BP Capital Markets plc’s 3.017% guaranteed notes due 2027 were flat to 1 bp better than where the bonds priced on Tuesday.

Gilead Sciences prices

Gilead Sciences priced $5 billion of senior notes (A3/A) in five tranches on Thursday, according to a market source.

The company sold $500 million of 1.95% notes due March 1, 2022 at 80 bps over Treasuries.

Gilead Sciences priced $750 million of 2.5% seven-year notes at 105 bps over Treasuries.

The company sold $1.25 billion of 2.95% notes due March 1, 2027 at 125 bps over Treasuries.

The $750 million tranche of 4% 20-year notes priced at 157 bps over Treasuries.

Gilead Sciences also priced $1.75 billion of 4.15% 30-year notes at Treasuries plus 172 bps.

The notes priced on the tight side of guidance.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the bookrunners.

The notes will have make-whole calls and par calls, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds will be used for general corporate purposes.

The biopharmaceutical company is based in Foster City, Calif.

Freddie Mac taps market

Freddie Mac announced on Thursday that it priced $2.25 billion of 0.875% two-year Reference Notes at 99.957 to yield 0.896%.

The notes are due Oct. 12, 2018.

The deal is expected to settle on Friday.

Barclays, Goldman Sachs & Co. and TD Securities (USA) LLC were the lead managers.

The government-backed mortgage provider is based in McLean, Va.

Pitney Bowes prices

Pitney Bowes priced $600 million of 3.375% five-year notes on Thursday at 99.724 to yield 3.435%, according to an FWP filing with the SEC.

The notes (Baa3/BBB) priced with a spread of 225 bps over Treasuries.

BofA Merrill Lynch, Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to redeem all 300,000 shares of subsidiary Pitney Bowes International Holdings’ perpetual voting preferred stock for $300 million and for general corporate purposes.

Pitney Bowes is a Stamford, Conn.-based provider of services, including eCommerce shipping and mailing.

CCL Industries prices

CCL Industries sold $500 million of 3.25% 10-year notes in a Rule 144A and Regulation S private placement offering on Thursday, according to a market source and a company news release.

The notes due (Baa2/BBB) priced with a spread of 160 bps over Treasuries, on the tight side of talk.

The bookrunners were BofA Merrill Lynch and Scotia Capital (USA) Inc.

The notes will be CCL's senior obligations and will initially be guaranteed by CCL's subsidiaries, CCL Industries Corp. and CCL Industries (U.K.) Ltd.

CCL intends to use the proceeds from the offering to repay amounts owed under its revolving credit facility.

The specialty label and packaging company is based in Toronto.

Ingredion sells $500 million

Ingredion priced $500 million of 3.2% 10-year senior notes with a spread of 150 bps over Treasuries on Thursday, according to an FWP filing with the SEC.

The notes (Baa2/BBB/BBB) priced at 99.957 to yield 3.205%.

BofA Merrill Lynch, JPMorgan, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Mizuho Securities were the lead managers.

Proceeds will be used to repay about $350.3 million of debt under a term loan and about $42.03 million of outstanding debt under a revolver and the remainder for general corporate purposes.

The maker of starches and sweeteners is based in Westchester, Ill.

Agilent prints $300 million

Agilent Technologies sold $300 million of 3.05% 10-year senior notes with a spread of 140 bps over Treasuries on Thursday, according to an FWP filing with the SEC.

The notes due Sept. 22, 2026 (/BBB+/BBB+) priced at 99.624 to yield 3.094%.

BNP Paribas Securities Corp., Citigroup and Credit Suisse Securities (USA) LLC were the bookrunners.

Proceeds will be used to repay debt under a revolver due Sept. 15, 2019 and for general corporate purposes. As of July 31, the company had $236 million outstanding on the revolver.

The bio-analytic and electronic measurement technology company is based in Santa Clara, Calif.

Delphi prices $300 million

Delphi Automotive sold $300 million of 4.4% 30-year senior notes at 99.454 to yield 4.433% in the primary market on Thursday, according to an FWP filing with the SEC.

The notes (Baa3/BBB/BBB) priced with a spread of 195 bps over Treasuries.

Citigroup, Goldman Sachs, JPMorgan and BofA Merrill Lynch were the bookrunners.

Proceeds, along with funds from €500 million of 1.6% senior notes due 2028, will be used to redeem the company’s $800 million of 5% senior notes due 2023 on Sept. 30.

Delphi is a vehicle components manufacturer based in Troy, Mich.

Kite raises $300 million

Kite Realty Group sold $300 million of 4% 10-year senior notes at 99.599 to yield 4.049% on Thursday, according to an FWP filing with the SEC.

The notes (Baa3/BBB-) priced with a spread of 235 bps over Treasuries.

U.S. Bancorp Investments Inc., BofA Merrill Lynch, Barclays, JPMorgan and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to pay off the company’s $200 million term loan A, which matures on July 1, 2019, and for general corporate purposes.

Kite Realty is an Indianapolis-based real estate investment trust focused on neighborhood and community shopping centers.

Arizona Public Service prices

Arizona Public Service sold $250 million of 2.55% 10-year notes with a spread of 90 bps over Treasuries on Thursday, according to an FWP filing with the SEC.

The notes (A2/A-/A) priced at 99.537 to yield 2.603%.

BNY Mellon Capital Markets LLC, JPMorgan, MUFG and TD Securities were the bookrunners.

Proceeds will be used to repay commercial paper borrowings and to replenish cash used in connection with the payment at maturity of the company’s $250 million of 6.25% notes due Aug. 1, 2016.

Arizona Public Service is an electric utility based in Phoenix and a subsidiary of Pinnacle West Capital Corp.

Thermo Fisher mostly flat

Thermo Fisher Scientific’s 2.95% notes due 2026 traded flat to 1 bp tighter at 139 bps offered early on Thursday, according to a market source.

Thermo Fisher Scientific sold $1.2 billion of the notes (Baa2/BBB/BBB) on Wednesday at a spread of 140 bps over Treasuries.

The science technology company is based in Waltham, Mass.

BP mostly unchanged

BP Capital Markets’ 3.017% notes due 2027 traded mostly unchanged to 1 bp better at 129 bps offered earlier in the session, a market source said.

BP Capital Markets sold $1 billion of the long 10-year notes (A2/A-) on Tuesday at par with a spread of 130 bps over Treasuries.

BP Capital Markets is a financing arm of London-based oil and gas company BP plc.

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