FedEx, John Deere Capital tap high-grade market; Duke Energy flat; JPMorgan paper softens

By Cristal Cody

Eureka Springs, Ark., Jan. 3 – High-grade bond issues opened the 2017 market quickly with new deals priced and announced over the first new session of the year on Tuesday.

FedEx Corp. came with a $1.2 billion two-tranche offering of notes.

John Deere Capital Corp. raised $1 billion in a three-part sale of senior medium-term notes, including a floating-rate tranche.

Also, Duke Energy Florida, LLC, Santander UK Group Holdings plc and Westpac Banking Corp. were expected to price new bonds.

Canadian investment-grade bond issuers stayed to the sidelines as January kicked off.

“Even the food court was quiet,” a syndicate source said. “It’s never been a terribly busy month in Canada. Our banks came out of blackout at the end of November so a lot of banks got their fiscal quarter funding done. The non-financial issuers, a lot of them, don’t go out of blackout till February.”

About C$5 billion to C$8 billion of Canadian high-grade supply is expected for the month, the source said.

U.S. issuance is expected by syndicate sources to remain strong in January with as much as $160 billion of volume forecasted.

The Markit CDX North American Investment Grade index closed the session about 2 basis points tighter at a spread of 66 bps.

Duke Energy Corp.’s 2.65% senior notes due 2026 traded flat on the day.

In other secondary trading, JPMorgan Chase & Co.’s 2.972% notes due Jan. 15, 2023 ended weaker from where the paper was seen earlier.

FedEx prices $1.2 billion

FedEx sold $1.2 billion of notes (Baa2/BBB/) in two tranches on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

The $450 million tranche of 3.3% notes due March 15, 2027 priced at 99.598 to yield 3.346% and a spread of 90 bps over Treasuries.

FedEx sold $750 million of 4.4% notes due Jan. 15, 2047 with a spread of 140 bps plus Treasuries. The 30-year notes priced at 98.946 to yield 4.464%.

Wells Fargo Securities LLC, Regions Securities LLC, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners.

The notes are guaranteed by Federal Express Corp., FedEx Ground Package System, Inc., FedEx Freight Corp., FedEx Freight, Inc., FedEx Corporate Services, Inc., FedEx Office and Print Services, Inc., Federal Express Europe, Inc., Federal Express Holdings SA and Federal Express International, Inc.

Proceeds will be used for working capital and general corporate purposes.

FedEx is a Memphis, Tenn.-based package and freight transportation company.

John Deere sells $1 billion

John Deere Capital priced $1 billion of series F senior medium-term notes (A2/A/A) in three parts on Tuesday, according to FWP filings with the SEC.

The company sold $250 million of floating-rate notes due Oct. 15, 2018 at par to yield Libor plus 27 basis points.

John Deere Capital priced $350 million of 1.65% fixed-rate notes due Oct. 15, 2018 at 99.935 to yield 1.688% and a spread of 47 bps over Treasuries.

The $400 million tranche of 2.65% five-year notes priced at 99.972 to yield 2.656% and a Treasuries plus 72 bps spread.

Citigroup Global Markets Inc., Goldman Sachs & Co. and BofA Merrill Lynch were the bookrunners.

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

Duke Energy stable

Duke Energy’s 2.65% notes due 2026 were unchanged in the secondary market on Tuesday at 103 bps bid, a source said.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps plus Treasuries.

The diversified energy company is based in Charlotte, N.C.

JPMorgan lower

JPMorgan Chase’s 2.972% notes due 2023 ended the session lower in trading at 99.65 from where the notes were seen early in the day at 100.76, according to a market source.

The notes last traded on Friday at 99.56.

JPMorgan priced $1.5 billion of the notes (A3/A-/) on Dec. 1 at par with a spread of Treasuries plus 108 bps.

The financial services company is based in New York City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.