AutoZone prices $750 million; Owl Rock, DPL, SMBC Aviation eye market; inflows increase

By Cristal Cody

Tupelo, Miss., April 4 – Deal supply thinned on Thursday with one all high-grade corporate deal reported in the primary market during the session.

AutoZone, Inc. sold $750 million of senior notes in two tranches on the tight side of guidance.

Several investment-grade deals are being marketed, sources note.

Owl Rock Capital Corp. plans to price a benchmark-sized offering of five-year senior notes after holding fixed income investor calls over the past two sessions.

DPL Inc. is expected to price dollar-denominated notes following fixed income investor calls over the day.

Also on Thursday, SMBC Aviation Capital Ltd. began global fixed income investor calls for a potential bond deal.

Investment-grade issuers have priced more than $15 billion of bonds week to date, compared to about $20 billion of deal volume forecast.

Lipper US Fund Flows reported corporate investment-grade fund inflows rose to $2.9 billion for the week ended April 3 from $2.75 billion in the prior week.

The Markit CDX North American Investment Grade 32 index firmed about 1 basis point over the day to head out at a spread of 61 bps.

In the secondary market, AIB Group plc’s $1 billion of 4.263% fixed-to-floating-rate notes due April 10, 2025, priced on Wednesday at a spread of 195 bps over Treasuries, improved about 4 bps, according to a market source.

After the initial fixed-rate period, the notes (Baa3/BBB-/BBB-) will convert to a floating rate of Libor plus 187.4 bps.

Elsewhere on Thursday, market participants noted that initial jobless claims for the week ended March 30 fell to a 49-year low. The Labor Department reported initial unemployment claims totaled 202,000, compared to market forecasts of 215,000.

AutoZone sells two tranches

AutoZone sold $750 million of senior notes (Baa1/BBB/BBB) in two parts on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $300 million tranche of 3.125% five-year notes priced at 99.711 to yield 3.188%, and a spread of 87 bps over Treasuries. The notes came on the tight side of guidance in the 90 bps over Treasuries spread area.

AutoZone sold $450 million of 3.75% 10-year notes at 99.727 to yield 3.783%, or a spread of 127 bps plus Treasuries. Price guidance was in the Treasuries plus 130 bps spread area.

Barclays, BofA Merrill Lynch and SunTrust Robinson Humphrey, Inc. were the bookrunners.

AutoZone is a Memphis-based auto parts and supplies retailer.

Owl Rock on deck

Owl Rock Capital plans to price a benchmark-sized offering of five-year senior notes (Baa3/BBB-/BBB-), according to a market source and a 497AD filing with the SEC on Thursday.

Initial price talk on the notes due April 15, 2024 is in the Treasuries plus 325 bps spread area.

Pricing is expected on Friday with the deal set to close on April 10.

The company held fixed income investor calls on Wednesday and Thursday.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, SG Americas Securities LLC and SunTrust Robinson Humphrey are the bookrunners.

Owl Rock Capital is a middle-market debt and equity asset management company based in New York City.

DPL plans deal

DPL (Ba1/BBB-/BBB-) plans to price an offering of dollar-denominated notes, according to a market source.

The company held fixed income investor calls on Thursday.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are the bookrunners.

DPL is a Dayton, Ohio-based electricity provider and subsidiary of AES Corp.

SMBC eyes dollar market

SMBC Aviation Capital (A-/A-) began global fixed income investor calls on Thursday for a potential bond deal, according to market sources.

The investor calls will be held in the U.S., Asia and Europe markets.

Citigroup Global Markets Inc., Credit Agricole CIB, Goldman Sachs, J.P. Morgan Securities plc, RBC Capital Markets and SMBC Nikko Securities America, Inc. are the arrangers.

SMBC Aviation Capital is a Dublin-based global aircraft leasing company.

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