Marsh & McLennan, Dominion, Jefferies, General Mills price; Marsh covenants spark concerns

By Cristal Cody

Eureka Springs, Ark., Jan. 9 – High-grade pricing action remained strong on Monday with robust supply expected over the remainder of the second week of the new year.

About $25 billion to $35 billion of deal volume is forecast for the week.

Marsh & McLennan Cos., Inc. sold $1 billion of fixed-rate senior notes in two parts on Monday.

The company’s offering raised red flags for one covenant watch group.

“Marsh & McLennan is in the market today with a new offering that has a variant on the new horrible ‘no premium on default’ language that first appeared in the Rackspace offering in October, then the ServiceMaster and EP Energy offerings in November, and rolling into high grade with FedEx in January,” according to a release from Covenant Review, an independent credit research firm.

Covenant Review said it “urges investors to reject this deal unless this no premium language is deleted. If investors do not act, then this language will quickly continue to spread with terrible consequences.”

In other pricing action on Monday, Dominion Resources, Inc. sold $800 million in a two-part notes offering.

Jefferies Group LLC tapped the primary market with a $750 million 10-year senior note sale.

General Mills, Inc. sold $750 million of 10-year notes.

In the secondary market, Societe Generale SA’s 4% senior non-preferred notes due 2027 improved from Friday.

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