Mid-America, NextEra tap primary market; EPR eyes market; high-grade credit spreads widen

By Cristal Cody

Tupelo, Miss., Aug. 5 – Two high-grade issuers tapped the primary market on Monday in an otherwise quiet session as credit spreads widened over the day amid global trade tensions.

The Markit CDX North American Investment Grade 32 index closed the day 5 basis points wider at a spread of 62 basis points from where it ended Friday.

In the primary market, NextEra Energy Capital Holdings Inc. priced a $1.5 billion remarketing of two-year debentures.

Mid-America Apartments, LP placed a $250 million add-on to its 3.95% senior notes due March 15, 2029.

Also on Monday, real estate investment trust EPR Properties (Baa2/BBB-/BBB-) held fixed income investor calls for a possible deal, a market source said.

BofA Securities, Inc., Barclays, Citigroup Global Markets Inc. and RBC Capital Markets, LLC were the arrangers.

About $25 billion to $30 billion of supply is expected by syndicate sources this week with some predicting as much as $40 billion of issuance on the potential of a couple of mergers-and-acquisitions related bond funding deals.

Occidental Petroleum Corp. held fixed income investor calls on Thursday and Friday for up to nine tranches of senior notes to fund its acquisition of Anadarko Petroleum Corp.

T-Mobile U.S. Inc. also is expected to price a possible $10 billion to $15 billion of investment-grade secured bonds to complete its merger with Sprint Corp.

T-Mobile held a roadshow in the United States and Europe in May.

August deal volume is expected to total in the $75 billion up to $100 billion area, according to market sources.

NextEra prices $1.5 billion

NextEra Energy Capital Holdings priced a $1.5 billion remarketing of 2.403% debentures due Sept. 1, 2021 (Baa1/BBB+/A-) on Monday at 100.245 to yield 2.281%, according to an FWP filed with the Securities and Exchange Commission.

The debentures priced with a spread of 70 bps over Treasuries.

The bonds originally were issued in August 2016 as part of NextEra Energy, Inc.'s equity units.

Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC and Mizuho Securities USA Inc. were the remarketing agents.

The debentures are guaranteed by NextEra Energy Capital Holdings’ parent company, NextEra Energy, Inc.

NextEra Energy is an energy company based in Juno Beach, Fla.

Mid-America Apartments reopens

Mid-America Apartments priced a $250 million add-on Monday to its 3.95% senior notes due March 15, 2029 at a spread of 125 bps over Treasuries, according to an FWP filed with the SEC.

The notes (Baa1/BBB+/BBB+) priced at 107.827 to yield 2.985%.

Wells Fargo Securities LLC, Citigroup Global Markets, Jefferies LLC, J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc. and Mizuho Securities were the bookrunners.

The company originally sold $300 million of the notes on Feb. 26 at 99.72 to yield 3.984% and a spread of 135 bps over Treasuries. The total outstanding is $550 million.

Mid-America Apartments is a Memphis-based real estate investment trust.

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