Supply thins; Spirit AeroSystems, U.S. Bank tap primary; Yara continues investor calls

By Cristal Cody

Tupelo, Miss., May 22 – Two issuers tapped the investment-grade primary market on Tuesday with market sources questioning whether much more supply will come ahead of the long holiday weekend.

Spirit AeroSystems, Inc. priced a $1.3 billion three-tranche offering of senior notes, while U.S. Bank NA sold $1 billion of notes in two parts.

On Monday, Unum Group sold $300 million of $25-par 40-year junior subordinated notes, and the Bank of N.T. Butterfield & Son Ltd. priced $75 million of 10-year fixed-to-floating rate subordinated notes.

About $25 billion of volume was forecasted for the week. The bond markets will close early Friday ahead of the Memorial Day holiday weekend and will remain closed on Monday.

Several deals are in the pipeline, while other issuers are marketing bonds.

On Tuesday, Yara International ASA wrapped a two-day round of fixed-income investor calls via Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Societe Generale CIB.

The company plans to price dollar-denominated senior notes in a Rule 144A and Regulation S deal.

Also, ASB Bank Ltd. is continuing a roadshow for a Rule 144A and Regulation S dollar-denominated offering of five-year notes in the U.S. market through Thursday. The roadshow began on May 14 in Asia.

Citigroup Global Markets and J.P. Morgan Securities are the arrangers.

The Markit CDX North American Investment Grade 30 index closed modestly tighter at a spread of 61 basis points.

Spirit AeroSystems prices

Spirit AeroSystems sold $1.3 billion of senior notes (Baa3/BBB-/) in three tranches during the session, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company priced $300 million of three-year floating-rate notes at par to yield Libor plus 80 bps.

The $300 million tranche of 3.95% five-year fixed-rate notes priced at 99.98 to yield 3.954%, or a spread of Treasuries plus 105 bps.

In the final tranche, the company sold $700 million of 4.60% 10-year notes at a Treasuries plus 155 bps spread. The notes priced at 99.846 to yield 4.619%.

The notes all priced tighter than initial guidance.

BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Goldman Sachs & Co., Mizuho Securities USA Inc. and RBC Capital Markets, LLC were the bookrunners.

Spirit AeroSystems is a Wichita, Kan.-based maker of commercial and military airplane components, including fuselages, propulsion systems and wings.

U.S. Bank sells two tranches

U.S. Bank priced $1 billion of three-year notes (A1/AA-/AA) in two tranches on Tuesday, according to a market source.

The company sold $500 million of floating-rate notes due May 21, 2021 at Libor plus 29 bps.

U.S. Bank priced $500 million of 3.104% three-year notes at a spread of Treasuries plus 53 bps.

U.S. Bancorp Investments, Inc., RBC Capital Markets and UBS Securities LLC were the bookrunners.

U.S. Bank is a Cincinnati, Ohio-based banking services company.

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