High-grade busy; Ford, Honda, Fortune, Southern California Gas, Interstate Power price

By Cristal Cody

Tupelo, Miss., Sept. 19 – Supply in the high-grade market remained strong on Wednesday.

Ford Motor Credit Co. LLC priced $750 million of two-year floating-rate notes, while American Honda Finance Corp. sold $300 million of floating-rate medium-term notes due May 22, 2020.

Fortune Brands Home & Security, Inc. tapped the primary market with a $600 million offering of five-year senior notes.

Southern California Gas Co. sold $550 million of long 30-year first mortgage bonds.

Interstate Power and Light Co. brought $500 million of 10-year senior debentures to the primary market.

In other corporate issuance, Sysco Canada, Inc. sold C$500 million of 3.65% senior guaranteed notes due April 25, 2025 (A3/BBB+/) on Wednesday at 99.962 to yield 3.656%, or a spread of 129 basis points over the interpolated Government of Canada bond curve.

Also on Wednesday, Japan Finance Organization for Municipalities was offering $1 billion of five-year senior notes with the spread set at mid-swaps plus 41 bps, tighter than guidance in the mid-swaps plus 43 bps area.

The investment-grade market is showing no signs of fatigue when it comes to digesting more than $100 billion of supply month to date, according to market sources.

Issuance has been strong week to date with more than $28 billion of investment-grade issues priced, including Nestle Holdings Inc.’s six-part deal on Monday.

Investment-grade bonds priced this week have been well received in the secondary market and are trading mostly flat to about 5 bps better than issuance, a source said.

National Retail Properties, Inc.’s $700 million of senior notes (Baa1/BBB+/BBB+) priced on Tuesday tightened about 4 bps in secondary trading.

The Orlando-based real estate investment trust sold $400 million of 4.3% notes due Oct. 15, 2028 at a spread of 135 bps over Treasuries and $300 million of 4.8% notes due Oct. 15, 2048 at a Treasuries plus 170 bps spread.

The Markit CDX North American Investment Grade 30 index closed modestly tighter at a spread of 56 bps.

Ford prices $750 million

Ford Motor Credit (Baa2/BBB/BBB) priced $750 million of two-year floating-rate notes (Baa3/BBB/BBB) on Wednesday at par to yield Libor plus 93 bps, according to a 424B2 filing with the Securities and Exchange Commission.

BofA Merrill Lynch, Barclays, Morgan Stanley & Co. LLC and SG Americas Securities, LLC were the bookrunners.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

American Honda sells floaters

Also on Wednesday, American Honda Finance priced $300 million of floating-rate medium-term notes due May 22, 2020 (A2/A+/) at par to yield Libor plus 18 bps on Wednesday, according to an FWP filing with the SEC.

Barclays was the bookrunner.

The interest rate will initially reset on Nov. 22, 2018 and will reset on each interest payment date.

American Honda Finance is a Torrance, Calif.-based financing arm of American Honda Motor Co.

Fortune Brands prices

Fortune Brands Home & Security sold $600 million of 4% five-year senior notes (Baa3/BBB+/BBB) on Wednesday at a spread of 105 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.969 to yield 4.007%.

The bookrunners were Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC.

The Deerfield, Ill., company creates products and services for homeowners, including entry door systems, windows, faucets and locks.

Southern California Gas prints

Southern California Gas sold $550 million of 4.3% first mortgage bonds due Jan. 15, 2049 on Wednesday at 99.955 to yield 4.303%, according to an FWP filed with the SEC.

The bonds (Aa2/A+/AA-) priced with a spread of 107 bps over Treasuries.

Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, MUFG, UBS Securities LLC and Williams Capital Group LP were the bookrunners.

The natural gas distributor is based in Los Angeles.

Interstate Power sells bonds

Interstate Power and Light priced $500 million of 4.1% 10-year senior debentures (Baa1/A-/) in a green bond offering on Wednesday at 99.748 to yield 4.131%, according to an FWP filing with the SEC.

The bonds priced with a spread of Treasuries plus 105 bps.

Goldman Sachs, MUFG and Wells Fargo Securities were the bookrunners.

The electric and natural gas subsidiary of Alliant Energy Corp. is based in Cedar Rapids, Iowa.

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