Sysco brings acquisition financing; Comcast adds on; Comcast, Charter firm; Time Warner flat

By Aleesia Forni and Cristal Cody

New York, March 22 – Sysco Corp., Citigroup Inc. and Comcast Corp. took advantage of tightening spreads on Tuesday, pricing a combined $6.05 billion of new investment-grade issuance.

Sysco sold a multi-tranche $2.5 billion issue of senior notes to finance its purchase of U.K.-based food distributor Brakes Group.

Citigroup sold $2.5 billion of bonds in two parts during the session.

Meantime, Comcast attracted an order book that was more than 2.7 times oversubscribed for its two-part add-on to existing notes due 2023 and 2026.

Tuesday’s three new deals push the week’s total supply to $9.1 billion.

Comcast’s reopened 3.15% notes due 2026 traded about 2 basis points tighter in the secondary market.

Charter Communications Inc.’s 4.908% notes due 2025 tightened 2 bps during the session.

Time Warner Inc.’s 3.875% notes due 2026 were flat over the day.

The Markit CDX North American Investment Grade index eased 3 bps to a spread of 80 bps.

Sysco offering

Tuesday’s primary market saw Sysco sell $2.5 billion of senior notes (A2/BBB+) in four tranches to fund its acquisition of Brakes Group, according to a market source.

The offering included $500 million of 1.9% three-year notes sold at 99.945 to yield 1.909%, or Treasuries plus 85 bps.

Pricing came at the tight side of the Treasuries plus 90 bps area guidance and tighter than initial talk set in the Treasuries plus 110 bps area.

A $500 million tranche of 2.5% five-year notes sold at 99.948 to yield 2.511%, or Treasuries plus 110 bps.

Guidance was in the Treasuries plus 115 bps area, and initial talk was in the Treasuries plus 140 bps area.

And $1 billion of 3.3% 10-year bonds sold at 99.623 to yield 3.344% with a spread of Treasuries plus 140 bps.

The notes sold at the tight end of the Treasuries plus 145 bps area guidance. Initial talk was in the Treasuries plus 170 bps area.

Finally, $500 million of 4.5% 30-year bonds priced with a 180 bps spread over Treasuries. Pricing was at 99.657 to yield 4.521%.

The notes were guided in the Treasuries plus 185 bps area and initially talked in the Treasuries plus 210 bps area.

Goldman Sachs & Co., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, TD Securities, HSBC, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the bookrunners.

Sysco is a Houston-based food service marketing and distribution company.

Citi two-parter

Citigroup priced a $2.5 billion issue of senior notes (Baa1/BBB+/A) in two five-year tranches on Tuesday, a market source said.

There was $1.5 billion of 2.7% notes sold at 99.856 to yield 2.713%, or Treasuries plus 133 bps.

The notes sold at the tight side of the Treasuries plus 135 bps area guidance and tighter than initial price thoughts in the high-140 bps area over Treasuries.

And $1 billion of five-year floaters sold at par to yield Libor plus 138 bps.

Citigroup Global Markets Inc. was the bookrunner.

The banking and financial services company is based in New York.

Comcast add-ons

Also in the primary market on Tuesday, Comcast sold $1.05 billion of add-ons to two existing tranches of its senior notes (A3/A-/A-), according to a market source and an FWP filed with the Securities and Exchange Commission.

There was a $350 million add-on to its 2.75% notes due March 1, 2023 sold at 101.871 to yield 2.451%, or Treasuries plus 75 bps.

The notes were talked in the Treasuries plus 85 bps area.

And a $700 million tap of the company’s 3.15% notes due March 1, 2026 priced at 102.861 to yield 2.81% with a spread of Treasuries plus 90 bps.

Price talk was in the Treasuries plus 100 bps area.

Both tranches were originally sold on Feb. 16.

Proceeds will be used for general corporate purposes.

Bookrunners were BofA Merrill Lynch, RBC Capital Markets LLC, Wells Fargo Securities LLC, Barclays and BNP Paribas Securities Corp.

Comcast’s reopened 3.15% notes due 2026 headed out 2 bps tighter at 88 bps bid, a market source said.

Comcast is a Philadelphia-based provider of entertainment, information and communication products and services.

Charter tightens

Charter Communications’ 4.908% notes due 2025 firmed 2 bps on Tuesday to 232 bps bid, a market source said.

The company sold $4.5 billion of the bonds (Ba1/BBB-) on July 9, 2015 at a spread of Treasuries plus 260 bps.

The Stamford, Conn.-based company provides cable, internet and phone services.

Time Warner unchanged

Time Warner’s 3.875% notes due 2026 were flat on the day at 164 bps bid, a source said.

Time Warner sold $600 million of the notes (Baa2/BBB/ BBB+) on Nov. 17 at a spread of Treasuries plus 162.5 bps.

The media company is based in New York.

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