High-grade issuers flood market; Altria, Nvidia, United Airlines price; credit spreads widen

By Cristal Cody

Eureka Springs, Ark., Sept. 13 – The high-grade primary market roared to life on Tuesday with more than $20 billion of bonds priced during the session, according to market sources.

Nvidia Corp. brought a $2 billion two-part offering of senior notes.

Altria Group Inc. sold $2 billion of guaranteed senior notes in two tranches.

United Airlines, Inc. sold $919,593,000 of pass-through certificates in two parts.

Duke Energy Progress Inc. priced $450 million of 30-year first mortgage bonds.

Liberty Property LP sold $400 million of 10-year senior notes.

Cisco Systems, Inc. sold about $6 billion of senior notes in five tranches on Tuesday. Final pricing details were not available by press time.

Washington Gas Light Co., World Bank and Kommunalbanken also planned to price.

In the Canadian investment-grade primary market, Sun Life Financial, Inc. sold C$1 billion of 3.05% 12-year debentures, Brookfield Asset Management Inc. priced C$500 million of 3.8% medium-term notes due March 16, 2027 and Industrial Alliance Insurance and Financial Services Inc. priced C$400 million of 3.3% 12-year debentures.

The Markit CDX North American Investment Grade index widened 4 basis points over the day to a spread of 77 bps.

In the secondary market earlier on Tuesday, Cox Communications Inc.’s 3.35% senior notes due 2026 traded about 1 bp tighter and about 5 bps better than where the bonds priced on Thursday.

Shell International Finance BV’s 2.5% guaranteed senior notes due 2026 priced in the previous week improved 2 bps in secondary trading.

Altria prices $2 billion

Altria Group sold $2 billion of guaranteed senior notes (A3/A-/BBB+) in two tranches, according a market source on Tuesday.

The company priced $500 million of 2.625% 10-year notes at Treasuries plus 95 bps.

Altria sold $1.5 billion of 3.875% 30-year notes at a spread of 150 bps over Treasuries.

Both tranches priced on the tight side of guidance.

Deutsche Bank Securities Inc., Goldman Sachs & Co., Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the lead bookrunners.

The notes will have a make-whole call and then are callable at par, according to a 424B5 filing with the Securities and Exchange Commission.

Proceeds from the deal will be used to repurchase the company’s 9.95% notes due 2038 and outstanding 10.20% notes due 2039 and for general corporate purposes.

The securities are guaranteed by Richmond, Va.-based parent Philip Morris USA Inc., a cigarette and smokeless tobacco product maker.

Nvidia raises $2 billion

Nvidia sold $2 billion of senior notes (Baa1/BBB-/BBB+) in two parts, according to a market source on Tuesday.

The company priced $1 billion of 2.2% five-year notes at Treasuries plus 100 bps.

A $1 billion offering of 3.2% 10-year notes priced at 150 bps over Treasuries.

Both tranches priced on the tight side of talk.

Goldman Sachs & Co., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

The notes will have a make-whole call until the par call date and a par call after that, according to a 424B5 filing with the Securities and Exchange Commission.

The Santa Clara, Calif., visual computing company will use the proceeds to prefund the repayment of its $1.5 billion of 1% convertible notes due Dec. 1, 2018 and for general corporate purposes.

United Airlines sells $919.59 million

United Airlines sold $919,593,000 of series 2016-2 pass-through certificates in two parts on Tuesday, according to FWP filings with the Securities and Exchange Commission.

The company priced $636,512,000 of 2.875% class AA certificates (Aa3/-/AA) at par.

United Airlines sold $283,081,000 of 3.1% class A certificates (A2/-/A) at par.

Both classes of certificates will have an average life of 9.1 years, an expected final distribution date of Oct. 7, 2028 and a final maturity of April 7, 2030.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. were the lead managers.

Proceeds will be used to finance new aircraft.

The airline is based in Chicago.

Liberty prices $400 million

Liberty Property priced $400 million of 3.25% 10-year senior notes with a spread of 162.5 bps over Treasuries on Tuesday, according to a FWP filing with the SEC.

The notes due Oct. 1, 2026 (Baa1/BBB/BBB) priced at 99.162 to yield 3.349%.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used for the early redemption of the company’s $300 million of 5.5% senior notes due Dec. 15, 2016, for working capital and for general corporate purposes, including repaying debt under the company’s $800 million credit facility.

The real estate investment trust for industrial and office properties is based in Malvern Pa.

Duke sells bonds

Duke Energy Progress priced $450 million of 3.7% 30-year first mortgage bonds at 99.745 to yield 3.714% on Tuesday, according to a FWP filing with the SEC.

The bonds due Oct. 15, 2046 (Aa3/A/A+) priced with a spread of 123 bps over Treasuries.

Credit Suisse Securities (USA) LLC, MUFG and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for capital expenditures for ongoing construction and capital maintenance and for general company purposes.

Raleigh, N.C.-based Duke Energy Progress generates and distributes electricity in North Carolina and South Carolina.

Cox tightens

Cox Communications’ 3.35% senior notes due 2026 traded about 1 bp tighter at 170 bps bid in early secondary trading on Tuesday, according to a market source.

Cox sold $1 billion of the 10-year senior notes (Baa2/BBB/BBB+) on Thursday at a spread of 175 bps over Treasuries.

Cox Communications is an Atlanta-based media and cable company and subsidiary of Cox Enterprises Inc.

Shell firms

Shell International Finance’s 2.5% notes due 2026 traded 2 bps tighter at 106 bps bid in the secondary market, a source said.

Shell International Finance sold $1 billion of the notes (Aa2/A) as part of a five-tranche offering on Wednesday at 108 bps plus Treasuries.

The notes are guaranteed by The Hague, the Netherlands-based oil and gas company Royal Dutch Shell plc.

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