Conagra, FedEx, Royal Bank of Canada tap primary market; Nuveen plans deal

By Cristal Cody

Tupelo, Miss., Oct. 15 – Conagra Brands, Inc. dominated high-grade primary action on Monday with a $7.03 billion seven-part offering of senior notes.

The notes priced to help fund Conagra’s acquisition of Pinnacle Foods Inc. came on the tight side of guidance. A second tranche of floating-rate notes was dropped from the final sale.

Also on Monday, FedEx Corp. sold $1.25 billion of senior notes in two tranches.

In SSA issuance during the session, Royal Bank of Canada priced $1.7 billion of covered bonds.

Looking ahead, Nuveen, LLC is expected to bring a Rule 144A and Regulation S offering of guaranteed senior notes following a round of fixed-income investor calls on Tuesday.

New financial paper also is expected this week with banks exiting earnings blackout periods, according to market sources.

On Friday, JPMorgan Chase Bank, NA priced $800 million of two-year senior floating-rate notes due Oct. 19, 2020 at par to yield the Secured Overnight Financing Rate plus 55 basis points after parent company JPMorgan Chase & Co. reported better than expected third quarter earnings earlier in the session.

Heavier supply is likely this week, sources report. Less than $10 billion of corporate high-grade bonds were priced during the previous holiday-shortened week as stocks sold off.

About $25 billion to $35 billion of deal volume, with about half projected as bank supply, is forecast for the week.

The Markit CDX North American Investment Grade 31 index softened about 1 bp to close at a spread of 65 bps.

Conagra prices $7.03 billion

Conagra Brands priced $7,025,000,000 of senior notes (Baa3/BBB/BBB-) in seven tranches on the tight side of guidance on Monday, according to a market source.

A $525 million tranche of two-year floating-rate notes priced at Libor plus 75 bps.

Conagra sold $1.2 billion of 3.8% three-year notes at a spread of Treasuries plus 90 bps.

The company priced $1 billion of 4.3% notes due May 1, 2024 at a Treasuries plus 130 bps spread.

A $1 billion tranche of 4.6% notes due Nov. 1, 2025 were placed with a spread of 155 bps over Treasuries.

Conagra brought $1.3 billion of 4.85% 10-year notes at a spread of 170 bps over Treasuries.

A $1 billion tranche of 5.3% 20-year notes priced with a spread of 200 bps over Treasuries.

In the final tranche, Conagra sold $1 billion of 5.4% 30-year bonds at a Treasuries plus 210 bps spread.

Goldman Sachs & Co. LLC, BofA Merrill Lynch, J.P. Morgan Securities LLC and Mizuho Securities USA LLC were the bookrunners.

The packaged food company is based in Chicago.

FedEx raises $1.25 billion

FedEx sold $1.25 billion of guaranteed senior notes (Baa2/BBB/) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

A $400 million tranche of 4.2% 10-year notes priced at 99.879 to yield 4.215%, or a spread of 105 bps over Treasuries.

FedEx sold $850 million of 4.95% 30-year notes at 99.273 to yield 4.997%. The bonds priced with a Treasuries plus 165 bps spread.

BofA Merrill Lynch, Goldman Sachs, HSBC Securities (USA) Inc. and Mizuho Securities were the bookrunners.

FedEx is a Memphis-based package and freight transportation company.

RBC sells $1.7 billion

In new SSA issuance, Royal Bank of Canada (Aa2/AA-/AA) priced $1.7 billion of 3.35% covered bonds due Jan. 22, 2021 on Monday at a spread of mid-swaps plus 25 bps, or Treasuries plus 42.9 bps, according to a market source.

The bonds were initially talked to price in the mid-swaps plus 27 bps area.

RBC Capital Markets, LLC, HSBC Securities, TD Securities (USA) LLC and UBS Securities LLC were the bookrunners.

Royal Bank of Canada is a Toronto-based financial services company.

Nuveen eyes deal

Coming up, Nuveen (Baa2/BBB+/AA+) plans to hold fixed-income investor calls on Tuesday for a Rule 144A and Regulation S offering of guaranteed senior notes, according to market sources.

Citigroup Global Markets Inc., J.P. Morgan Securities and Wells Fargo Securities LLC are the arrangers.

The deal size is expected to total $1 billion, according to Fitch Ratings.

Parent company Teachers Insurance and Annuity Association of America will guarantee the notes.

Nuveen is an asset management company based in Chicago.

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