Broadridge upsizes; primary activity thins; Duke Energy bonds tighten; credit spreads improve

By Cristal Cody

Eureka Springs, Ark., June 21 – Investment-grade primary action remained thin over Tuesday’s session with one corporate deal priced from Broadridge Financial Solutions, Inc., which sold an upsized $500 million offering of 10-year senior notes.

Less than $10 billion of high-grade volume is forecasted for the week with market participants expected to stay mostly on the sidelines until after the Brexit vote on Thursday.

U.S. traders also were expected to be focused on Federal Reserve chair Janet Yellen’s semiannual congressional monetary policy reports on Tuesday and Wednesday.

The Markit CDX North American Investment Grade index closed the day 2 basis points tighter at a spread of 78 bps.

In the secondary market, Duke Energy Ohio, Inc.’s new 3.7% first mortgage bonds due 2046 that priced on Monday traded 2 bps better than issuance earlier in the day.

Duke Energy Progress Inc.’s existing bonds traded about 3 bps to 4 bps tighter over the session.

Broadridge prices $500 million

Broadridge Financial Solutions sold an upsized $500 million offering of 3.4% 10-year senior notes on Tuesday with a spread of 175 bps over Treasuries, according to a company release, a market source and a 424B5 filing with the Securities and Exchange Commission.

The notes (Baa1/BBB+/BBB+) were talked at 180 bps, plus or minus 5 bps, over Treasuries.

The deal was upsized from $400 million.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG, Wells Fargo Securities LLC, BNP Paribas Securities Corp., TD Securities (USA) Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used to repay outstanding debt under the company’s senior credit facility, to finance acquisitions and for general corporate purposes.

Broadridge is a Lake Success, N.Y.-based producer of goods and services for securities processing, clearing and outsourcing, and investor communications.

Duke Energy Ohio better

Duke Energy Ohio’s 3.7% first mortgage bonds due 2046 traded 2 bps better in the secondary market earlier on Tuesday at 123 bps offered, according to a market source.

The company sold $250 million of the bonds (A2/A/A) on Monday at a spread of 125 bps over Treasuries.

The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.

Duke Energy Progress firms

Duke Energy Progress’ 3.25% first mortgage bonds due 2025 firmed 3 bps over the day to 77 bps bid, a source said.

The company sold $500 million of the bonds on Aug. 10, 2015 at Treasuries plus 105 bps.

Duke Energy Progress’ 4.2% first mortgage bonds due 2045 tightened 4 bps to 119 bps bid in the secondary market on Tuesday.

The bonds priced in the Aug. 10, 2015 offering in a $700 million tranche at Treasuries plus 130 bps.

The Raleigh, N.C.-based company is an electricity distributor in North Carolina and South Carolina.

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