Home Depot, John Deere Capital, Duke Energy, Magellan, Cabot price; RBS preps; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., Sept. 6 – High-grade corporate issuers kicked the post-Labor Day market off with about $10 billion of bond issuance on Tuesday.

Mitsubishi UFJ Financial Group, Inc. raised $4 billion in a four-part offering of senior notes.

Home Depot, Inc. priced $2 billion of senior notes in 10- and 40-year tranches.

American Honda Finance Corp. came with a $1.75 billion three-tranche offering of notes on Tuesday.

John Deere Capital Corp. priced $750 million of three-year notes in fixed- and floating-rate tranches.

Duke Energy Florida, LLC placed $600 million of 30-year first mortgage bonds, while Magellan Midstream Partners, LP sold $500 million of 30-year senior notes during the session.

Cabot Corp. brought $250 million of 10-year senior notes to market on Tuesday.

In other market activity, the Royal Bank of Scotland Group plc announced plans to price seven-year senior notes.

The Markit CDX North American Investment Grade index tightened 1 basis point over the day to close at a spread of 71 bps.

Coca-Cola Co.’s 2.25% notes due 2026 (Aa3/AA-/A+) priced a week ago traded about 2 bps tighter in secondary trading earlier Tuesday.

Mitsubishi prices $4 billion

Mitsubishi UFJ Financial Group priced $4 billion in a four-part offering of senior notes (A1/A/A) on Tuesday, according to a market source.

The company sold $1 billion of five-year floating-rate notes at Libor plus 106 bps.

Mitsubishi UFJ priced $1.5 billion of 2.19% five-year fixed-rate notes at a spread of Treasuries plus 108 bps.

In the third tranche, the company priced $500 million of 2.527% seven-year notes at 115 bps plus Treasuries.

Mitsubishi UFJ also sold $1 billion of 2.757% 10-year notes at 123 bps over Treasuries.

Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and MUFG were the bookrunners.

Proceeds from the seven-year notes will be used to fund existing and future renewable energy projects, according to a 424B5 filed with the Securities and Exchange Commission. Funds raised from the other tranches will be used for operations of Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mitsubishi UFJ Trust and Banking Corp. through loans.

Mitsubishi UFJ said the notes are intended to qualify as total loss-absorbing capacity (TLAC) debt once the TLAC regulations are implemented in Japan.

The bank is based in Tokyo.

Home Depot sells $2 billion

Home Depot sold $2 billion in two tranches of senior notes (A2/A/A) on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

The company placed $1 billion of 2.125% 10-year notes at 98.904 to yield 2.248% and a spread of 70 bps over Treasuries.

In the second tranche, Home Depot priced $1 billion of 3.5% 40-year notes at 98.097 to yield 3.59%. The notes priced with a spread of Treasuries plus 135 bps.

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

Home Depot, an Atlanta-based home improvement retailer, plans to use the proceeds for general corporate purposes.

American Honda Finance prices

American Honda Finance priced $1.75 billion of notes (A1/A+/) in three tranches on Tuesday, according to a market source.

American Honda Finance sold $250 million of five-year floating-rate notes with a coupon of Libor plus 61 bps.

The company priced $1 billion of 1.7% notes due Sept. 9, 2021 at a spread of 63 bps plus Treasuries.

In the final tranche, American Honda Finance sold $500 million of 2.3% 10-year notes at 80 bps over Treasuries.

The bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC.

American Honda Finance is a Torrance, Calif.-based financing arm of American Honda Motor Co.

John Deere sells two parts

John Deere Capital brought $750 million of three-year series F senior medium-term notes (A2/A) in two parts to the market on Tuesday, according to FWP filings with the SEC.

The company sold $250 million of floating-rate notes due Oct. 9, 2019 at with a coupon of Libor plus 28.5 basis points.

John Deere Capital priced $500 million of 1.25% three-year notes at 99.798 to yield 1.317%. The notes priced with a spread of 47 bps over Treasuries.

Barclays, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the bookrunners.

John Deere Capital is a financing arm of Moline, Ill.-based farm equipment supplier Deere & Co.

Duke Energy brings $600 million

Duke Energy Florida sold $600 million of 3.4% 30-year first mortgage bonds on Tuesday at 99.438 to yield 3.43%, according to a FWP filing with the SEC.

The bonds due Oct. 1, 2046 (A1/A/A) priced with a spread of 120 bps over Treasuries.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds from the offering will be used to fund capital expenditures for ongoing construction and capital maintenance, to pay down short-term debt under the company’s money-pool borrowing arrangement with Duke Energy Corp. and for general corporate purposes.

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

Magellan prices longs

Magellan Midstream Partners priced $500 million of 4.25% 30-year senior notes with a spread of 210 bps over Treasuries on Tuesday, according to an FWP filing with the SEC.

The notes due Sept. 15, 2046 (Baa1/BBB+) priced at 98.762 to yield 4.324%.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Mizuho Securities USA Inc. and RBC Capital Markets Corp. were the bookrunners.

Proceeds from the sale will be used for general partnership purposes.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

Cabot sells notes

Cabot sold $250 million of 3.4% 10-year senior notes (Baa2/BBB) at 99.849 on Tuesday, according to a market source and a press release.

The notes due Sept. 15, 2026 priced with a spread of 187.5 bps over Treasuries, on the tight side of guidance of 190 bps area.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Mizuho Securities USA Inc. were the bookrunners.

The notes may be redeemed via a make-whole call until three months before maturity and then will be callable at par, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds along with cash on hand will be used to redeem the company’s $300 million outstanding of 5% senior notes due Oct. 1.

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

Royal Bank of Scotland to price

The Royal Bank of Scotland Group is marketing seven-year senior notes, according to a 424B5 filing with the SEC on Tuesday.

RBS Securities Inc., BNP Paribas Securities Corp., BofA Merrill Lynch and Morgan Stanley & Co. LLC are the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

Royal Bank of Scotland Group is a banking and financial services company based in Edinburgh, Scotland.

Coca-Cola firms

Coca-Cola’s 2.25% notes due 2026 were seen early Tuesday about 2 bps tighter from Friday at 66 bps bid in the secondary market, a source said.

Coca-Cola sold $1 billion of the notes on Aug. 29 at a spread of 70 bps plus Treasuries.

The beverage company is based in Atlanta.

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