Berkshire, Western Gas, Commonwealth Edison, Ralph Lauren, Hyatt among issuers; Kroger steady

By Cristal Cody

Tupelo, Miss., Aug. 7 – High-grade issuers priced nearly $5 billion of bonds during Tuesday’s session as new deal activity continued Monday’s vigorous pace.

Berkshire Hathaway Finance Corp. tapped the primary market with a $2.35 billion sale of 30-year senior notes.

Western Gas Partners, LP brought $750 million of split-rated senior notes in two tranches to the market.

Commonwealth Edison Co. sold $550 million of 10-year first mortgage bonds.

Ralph Lauren Corp. was in the deal market on Tuesday and sold $400 million of seven-year senior notes.

Hyatt Hotels Corp. also sold $400 million of 10-year senior notes.

In addition on Tuesday, Arizona Public Service Co. priced $300 million of 30-year notes.

More than $10 billion of investment-grade bonds priced on Monday from issuers including American Water Capital Corp., Ford Motor Credit Co. LLC, Bank of New York Mellon Corp., Ventas Realty, LP, Duke Energy Progress, LLC, Indiana Michigan Power Co., Intercontinental Exchange, Inc., American Water Capital Corp., NextEra Energy Capital Holdings, Inc., Paccar Financial Corp., Discover Bank and Associated Bank, NA.

Deal volume was expected to climb this week from about $8 billion of investment-grade bond issuance in the previous week, according to market sources who predicted about $20 billion to $25 billion of supply through Friday.

In the secondary market, Kroger Co.’s senior notes (Baa1/BBB/BBB-) were ending flat to about 1 basis point softer following Fitch Ratings’ downgrade of the company on Tuesday, a source said.

Kroger’s 3.7% notes due 2027 headed out unchanged at 126 bps bid.

The Cincinnati-based grocery retailer sold $600 million of the notes on July 17, 2017 at a Treasuries plus 140 bps spread.

Fitch dropped the company’s credit rating to BBB- from BBB.

The Markit CDX North American Investment Grade 30 index firmed about 1 bp over the day to end at a spread of 58 bps.

Berkshire Hathaway prices

Berkshire Hathaway Finance priced $2.35 billion of 4.2% 30-year senior notes (Aa2/AA/) on Tuesday at a spread of 110 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.493 to yield 4.23%.

Goldman Sachs & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC were the bookrunners.

The notes will be guaranteed by parent company Berkshire Hathaway Inc.

Berkshire Hathaway Finance is an Omaha-based financing arm of Berkshire Hathaway.

Western Gas sells notes

Western Gas Partners priced $750 million of split-rated senior notes (Ba1/BBB-/BBB-) in two tranches on Tuesday, according to an FWP filing with the SEC.

The company sold $400 million of 4.75% 10-year notes at 99.818 to yield 4.773%, or a spread of 180 bps over Treasuries.

Western Gas priced $350 million of 5.5% 30-year notes at 98.912 to yield 5.575%. The bonds priced with a 245 bps plus Treasuries spread.

Wells Fargo Securities, PNC Capital Markets LLC, RBC Capital Markets, LLC, U.S. Bancorp Investments Inc., Barclays, BB&T Capital Markets, BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC and Scotia Capital (USA) Inc. were the bookrunners.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets in the United States.

Commonwealth Edison prices

Commonwealth Edison sold $550 million of 3.7% 10-year first mortgage bonds (A1/A-/A) at 99.76 to yield 3.729% on Tuesday, according to an FWP filing with the SEC.

The first mortgage bonds priced with a spread of 75 bps over Treasuries.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs, U.S. Bancorp Investments, CIBC World Markets Corp., Credit Agricole Securities (USA) Inc. and SMBC Nikko Securities America, Inc. were the bookrunners.

Commonwealth Edison is a unit of Chicago-based energy provider Exelon Corp.

Ralph Lauren in primary

Ralph Lauren sold $400 million of 3.75% seven-year senior notes (A2/A-/) on Tuesday at a spread of 90 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.521 to yield 3.827%.

J.P. Morgan Securities LLC and BofA Merrill Lynch were the bookrunners.

Ralph Lauren is a New York-based company that designs, markets and distributes apparel, home, accessories and fragrance products.

Hyatt places notes

Hyatt Hotels sold $400 million of 4.375% 10-year senior notes (Baa2/BBB/) at a spread of 142 bps over Treasuries on Tuesday, according to an FWP filing with the SEC.

The notes priced at 99.866 to yield 4.391%.

Deutsche Bank Securities Inc., Goldman Sachs, J.P. Morgan Securities and Scotia Capital were the bookrunners.

purpose.

Chicago-based Hyatt Hotels operates full service hotels, resorts and residential and vacation properties.

Arizona Public prints

Arizona Public Service sold $300 million of 4.2% 30-year notes (A2/A-/A) at a spread of 112 bps over Treasuries on Tuesday, according to an FWP filing with the SEC.

The notes priced at 99.29 to yield 4.242%.

BNY Mellon Capital Markets LLC, J.P. Morgan Securities, PNC Capital Markets, RBC Capital Markets and TD Securities (USA) LLC were the bookrunners.

Arizona Public Service is an electric utility based in Phoenix and a subsidiary of Pinnacle West Capital Corp.

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