MidAmerican Energy, Kroger, Amphenol, Metropolitan Edison tap market; Westpac prices

By Cristal Cody

Tupelo, Miss., Jan. 7 – Investment-grade issuers priced $3.7 billion of corporate bonds on Monday.

MidAmerican Energy Co. led deal volume with a $1.5 billion two-part offering of green first mortgage bonds.

Kroger Co. came with $1.2 billion of senior notes in two tranches.

Amphenol Corp. priced $500 million of 10-year senior notes.

Metropolitan Edison Co. sold $500 million of 10-year senior notes.

In addition, in sovereign, supranational and agency issuance on Monday, Westpac Banking Corp. priced $2 billion of five-year notes.

Coming up on Tuesday, BNG Bank NV plans to bring a benchmark-sized Rule 144A and Regulation S offering of two-year notes to the primary market.

About $25 billion to $30 billion of investment-grade issuance, dependent on market tone, is expected by syndicate sources for the first full week of 2019.

About 30 issuers remain in the deal pipeline, one source said.

High-grade issuers priced more than $11 billion of bonds in the first week of 2019, sources report.

“With recent market volatility this is the weakest start to the year since at least 2006,” according to a BofA Merrill Lynch research note released on Monday. “Many corporate issuers will be in 4Q18 earnings-related blackouts over the coming weeks, implying that a lot of the pent-up supply from December could be delayed further.”

The Markit CDX North American Investment Grade 31 index closed the day at a spread of 82 basis points.

In the secondary market, Kroger’s existing senior notes (Baa1/BBB/BBB-) headed out mostly better, a source said.

The company’s 3.7% notes due 2027 improved to 178 bps bid on Monday from the 183 bps area last week.

The issue priced in a $600 million tranche on July 17, 2017 at a Treasuries plus 140 bps spread.

MidAmerican Energy prices

MidAmerican Energy sold $1.5 billion of green first mortgage bonds (Aa2/A+) in two tranches on Monday, according to a market source.

The company placed $600 million of 3.65% long 10-year bonds at a spread of 97 bps over Treasuries, on the tight side of guidance in the Treasuries plus 100 bps area, plus or minus 3 bps. Initial talk on the notes was in the Treasuries plus 115 bps area.

MidAmerican Energy sold $900 million of 4.25% long 30-year bonds on top of guidance at a Treasuries plus 130 bps spread. The notes were initially talked to print in the Treasuries plus 145 bps spread area.

Barclays, BNY Mellon Capital Markets LLC, Mizuho Securities USA LLC, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp. and SMBC Nikko Securities America Inc. were the bookrunners.

MidAmerican Energy is a utility company based in Des Moines.

Kroger raises $1.2 billion

Kroger’s $1.2 billion offering of senior notes (Baa1/BBB) included two tranches, according to an FWP filing with the Securities and Exchange Commission.

A $600 million tranche of 4.5% 10-year notes priced at 99.403 to yield 4.575% and a spread of Treasuries plus 190 bps, while a $600 million tranche of 5.4% 30-year notes sold at 99.646 to yield 5.424%, or 245 bps over Treasuries.

Wells Fargo, Citigroup Global Markets Inc., U.S. Bancorp Investments, BB&T Capital Markets, BNY Mellon Capital Markets and MUFG were the bookrunners for the 10-year notes.

On the 30-year tranche, Wells Fargo, Goldman Sachs & Co. LLC, BofA Merrill Lynch, Fifth Third Securities, Inc., RBC Capital Markets, LLC and Santander Investment Securities Inc. were the bookrunners.

Kroger is a Cincinnati-based grocery retailer.

Amphenol sells notes

Amphenol priced $500 million of 4.35% 10-year senior notes (Baa1/BBB+) at 99.904 to yield 4.362% on Monday, according to an FWP filing with the SEC.

The notes priced at a spread of 168 bps over Treasuries.

Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch, Citigroup, Commerz Markets LLC, MUFG and TD Securities (USA) LLC were the bookrunners.

The designer, manufacturer and marketer of electric, electronic and fiber optic components is based in Wallingford, Conn.

Metropolitan Edison prints

Metropolitan Edison brought $500 million of 4.3% 10-year senior notes (A3/BBB/BBB+) to the market at a spread of Treasuries plus 163 bps, a source said.

The notes priced on the tight side of guidance in the Treasuries plus 165 bps area, plus or minus 2 bps. Initial price talk was in the Treasuries plus 175 bps to 180 bps area.

BofA Merrill Lynch, JPMorgan, Mizuho Securities and Scotia Capital (USA) Inc. were the bookrunners.

Metropolitan Edison is an Akron, Ohio-based electric utility and subsidiary of FirstEnergy Corp.

Westpac Banking prices

Westpac Banking placed $2 billion of 3.15% five-year notes (Aa3/AA-/AA-) during the session at a spread of mid-swaps plus 58 bps, or Treasuries plus 65 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 60 bps area.

HSBC Securities (USA) Inc., RBC Capital Markets, TD Securities and Westpac Banking Corp. were the bookrunners.

The bank is based in Sydney, Australia.

BNG Bank eyes deal

Coming up on Tuesday, BNG Bank (Aaa/AAA/AA+) plans to price a benchmark-sized Rule 144A and Regulation S offering of two-year fixed-rate notes, according to an informed source.

The notes due Jan. 15, 2021 were initially talked to price with a spread in the mid-swaps plus 5 bps area.

BMO Capital Markets Corp., BNP Paribas Securities, Citigroup and JPMorgan are the bookrunners.

BNG Bank, formerly known as Bank Nederlandse Gemeenten NV, is a banking services company based in The Hague, Netherlands.

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