Hyundai, Jackson Life, Moller-Maersk, KKR, ERP, Wisconsin Power price ahead of Fed

By Cristal Cody

Tupelo, Miss., June 17 – High-grade issuers priced more than $4 billion of new bonds on Monday as issuers moved to tap the primary market ahead of the Federal Reserve’s mid-week monetary policy decision.

Hyundai Capital America priced $800 million of fixed-rate notes in two tranches.

Jackson National Life Global Funding priced $600 million of senior secured notes in two parts.

A.P. Moller-Mærsk A/S came by with $500 million of 10-year notes.

KKR & Co. Inc. subsidiary KKR Group Finance Co. VI LLC sold $500 million of 10-year senior notes.

Cabot Corp. brought $300 million of 10-year senior notes to the primary market.

ERP Operating LP sold $600 million of 10-year notes.

Caterpillar Financial Services Corp. placed $500 million of one-year medium-term floating-rate notes via a reserve inquiry.

Also, Wisconsin Power & Light Co. sold $350 million of 10-year debentures.

In other deal action on Monday, Fiserv, Inc. wrapped up the euro- and sterling-denominated legs of its multi-currency bond offering to refinance the debt of First Data Corp. The company sold €1.5 billion of notes in three tranches and £1.05 billion of notes in two tranches.

Fiserv priced $9 billion of notes in four tranches on June 10. Fiserv held a roadshow in Europe last week following the dollar-denominated offering.

The Brookfield, Wis.-based provider of financial services technology announced in January that it plans to acquire First Data Corp. in an all-stock transaction valued at about $22.7 billion. The deal is expected to close by the end of the year.

Fiserv’s $9 billion of senior notes (Baa2/BBB/) were mostly weaker than issuance in the secondary market, a source said.

Supply is expected to thin this week due to heavier than expected volume over the previous two weeks and the Federal Reserve’s monetary policy decision due on Wednesday, sources said.

About $15 billion to $20 billion of investment-grade corporate issuance is forecast with issuance expected to be front-loaded ahead of the Fed meeting. Some market sources estimate as little as $10 billion of volume for the week.

More than $28 billion of corporate bonds were sold last week, along with nearly $10 billion of sovereign, supranational and agency bonds.

The first week of June racked up more than $24 billion of corporate issuance.

The Markit CDX North American Investment Grade 32 index closed about 1 basis point tighter at a spread of 60 bps.

Hyundai Capital America prices

Hyundai Capital America (Baa1/BBB+/) priced $800 million of fixed-rate notes in two tranches on Monday, according to a market source.

The company sold $400 million of 3% three-year notes on the tight side of guidance at a spread of 120 bps over Treasuries.

A $400 million tranche of 3.4% five-year notes were placed on top of guidance at a spread of 155 bps over Treasuries.

BofA Securities, Inc., BNP Paribas Securities corp., Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC, MUFG and Mizuho Securities USA Inc. were the bookrunners.

Hyundai Capital America is an Irvine, Calif.-based auto financing arm of the Hyundai Motor Co.

ERP raises $600 million

ERP Operating sold $600 million of 3% 10-year notes (A3/A-/A) on Monday at 99.58 to yield 3.049%, or a spread of 97 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

J.P. Morgan Securities, Morgan Stanley & Co. LLC, RBC Capital Markets LLC, U.S. Bancorp Investments Inc. and Barclays were the bookrunners.

The unit of apartment property builder and manager Equity Residential is based in Chicago.

Jackson National Life sells notes

Jackson National Life Global Funding priced $600 million of senior secured notes (A1/AA-/AA-) in two tranches on Monday, according to a market source.

The company sold $300 million of 2.65% five-year notes with a Treasuries plus 85 bps spread. Initial price talk was in the Treasuries plus 90 bps area.

A $300 million tranche of 3.05% 10-year notes priced at a spread of 100 bps over Treasuries. The notes were initially talked to price in the Treasuries plus 115 bps area.

BofA Securities, Citigroup Global Markets Inc., J.P. Morgan Securities and Morgan Stanley were the bookrunners.

The company is a financing arm of Lansing, Mich.-based Jackson National Life Insurance Co.

KKR taps primary

KKR Group Finance priced $500 million of 3.75% 10-year senior notes (/A/A) on Monday on the tight side of guidance at a spread of 170 bps over Treasuries, according to a market source and a news release.

Citigroup Global Markets, Goldman Sachs & Co. LLC, Mizuho Securities, Morgan Stanley and KKR were the bookrunners.

The notes will be guaranteed by KKR & Co. Inc. and subsidiaries KKR Management Holdings LP, KKR Fund Holdings LP and KKR International Holdings LP.

KKR is a New York-based global investment firm.

A.P. Moller-Mærsk prices

A.P. Moller-Mærsk (Baa3/BBB) priced $500 million of 4.5% 10-year notes on Monday at a spread of 250 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 260 bps area.

Barclays, Citigroup Global Markets, Deutsche Bank Securities Inc., J.P. Morgan Securities and SMBC Nikko Securities America, Inc. were the bookrunners.

The company held a roadshow and fixed income investor calls in New York and London at the start of the month for the offering.

A.P. Moller-Maersk is an integrated container shipping company based in Copenhagen, Denmark.

Caterpillar sells floaters

Caterpillar Financial Services (A3/A/A) priced $500 million of one-year medium-term floating-rate notes on Monday at par to yield Libor plus 10 bps in a reverse inquiry-driven offering, according to an FWP filing with the SEC.

Citigroup Global Markets was the bookrunner.

Nashville, Tenn.-based Caterpillar Financial Services is a financing arm of Caterpillar Inc.

Wisconsin Power prints

Wisconsin Power & Light sold $350 million of 3.05% 10-year debentures on Monday at 99.708 to yield 3.034%, according to an FWP filing with the SEC.

The bonds (A2/A/) priced with a spread of 95 bps over Treasuries.

Barclays, Mizuho Securities, MUFG and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to reduce commercial paper.

The Madison, Wis.-based public utility distributes electricity and natural gas to central and southern Wisconsin.

Cabot prices $300 million

Cabot sold $300 million of 4% 10-year senior notes (Baa2/BBB) at 99.704 to yield 4.036% on Monday, according to a market source and an FWP filing with the SEC.

The notes priced at a spread of 195 bps over Treasuries. Guidance was in the 195 bps spread area.

Citigroup Global Markets, J.P. Morgan Securities and U.S. Bancorp Investments were the bookrunners.

The specialty chemicals and performance materials company is based in Boston.

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