Primary action mostly quiet; Tyco taps market; credit spreads soften; McDonald’s improves

By Cristal Cody

Tupelo, Miss., Jan. 25 – Activity stayed mostly muted in the investment-grade bond market on Monday a day ahead of the Federal Reserve’s two-day policy meeting.

Tyco Electronics Group SA sold $350 million of 3.7% 10-year senior notes with a spread of 170 basis points over Treasuries.

Alcentra Capital Corp. announced plans over the day to print an offering of 6.5% notes due Feb. 15, 2021 at the start of February.

Credit spreads softened over the session, and bonds were mixed in secondary trading.

The Markit CDX North American Investment Grade 25 index eased 2 bps to end at a spread of 107 bps.

In the secondary market, McDonald’s Corp.’s 3.7% bonds due 2026 traded about 1 bp better following the company’s report of an increase in fourth-quarter earnings but flat fiscal-year profit.

Tyco brings $350 million

Tyco Electronics sold $350 million of 3.7% 10-year senior notes at 99.757 to yield 3.729% on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes (Baa1/A-A-) priced with a spread of 170 bps over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities, LLC and Goldman Sachs & Co. were the bookrunners.

The notes are fully and unconditionally guaranteed by parent company TE Connectivity Ltd., a Schaffhausen, Switzerland-based maker of connectivity and sensor solutions for use in autos, planes, power grids, appliances, electronics and other products.

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

Tyco Electronics Group is a Luxembourg-based holding company.

Alcentra in pipeline

Looking ahead to upcoming deals, Alcentra Capital intends to price an offering of 6.5% notes due Feb. 15, 2021, according to filings on Monday with the SEC.

The trade date for the Alcentra Capital InterNotes (Egan-Jones: A-) is set for Monday with settlement expected on Feb. 4.

Incapital LLC is the bookrunner.

The notes may be redeemed on or after Feb. 15, 2017 at par plus accrued interest.

Proceeds from the deal will be used to repay outstanding debt under the company’s credit facility.

Alcentra Capital is a closed-end management investment company.

McDonald’s improves

McDonald’s 3.7% notes due 2026 firmed about 1 bp to 171 bps bid in secondary trading on Monday, according to a market source.

The company sold $1.75 billion of the notes (Baa1/BBB+/BBB+) on Dec. 2 at a spread of Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

© 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.