High-grade supply strong; American Express, Chevron, KfW, Royal Bank of Canada sell notes

By Cristal Cody

Tupelo, Miss., Feb. 28 – High-grade issuers flooded the primary market for a second straight session with more than $15 billion of bonds priced over the session.

American Express Credit Corp. sold $4.5 billion of notes in four tranches during the session.

Chevron Corp. priced $4 billion of notes in seven tranches on Tuesday.

KfW brought $4 billion of three-year global notes to the primary market.

Royal Bank of Canada priced $2.1 billion of three-year fixed- and floating-rate notes.

“RBC was in the dollar market today, so I wouldn’t be surprised if one of the banks decided to issue in Canada,” a syndicate source said.

Additional Canadian banks could tap the Canadian primary market before the week is out, the source said.

Toronto-Dominion Bank releases its first quarter earnings on Thursday.

In other new issuance, Georgia Power Co. priced an upsized $850 million two-part offering of senior notes.

Discovery Communications, LLC raised $650 million in two tranches of senior notes.

The Markit CDX North American Investment Grade index ended mostly unchanged on the day at a spread of 62 bps.

American Express prices

American Express Credit sold $4.5 billion of notes (A2/A-/A) in four tranches on Tuesday, according to a market source.

American Express priced $450 million of three-year floating-rate notes at Libor plus 43 basis points.

The company priced $2 billion of 2.2% three-year fixed-rate notes at a spread of Treasuries plus 72 basis points.

The company sold $300 million of five-year floating-rate notes at Libor plus 70 bps.

American Express priced $1.75 billion of 2.7% five-year fixed-rate notes at a Treasuries plus 82 bps spread.

BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Mizuho Securities USA Inc. were the bookrunners.

American Express Credit is a New York City–based credit card services provider.

Chevron places seven tranches

Chevron brought a $4 billion seven-part offering of senior notes (Aa2/AA-/) to the primary market on Tuesday, according to a market source.

The company sold $450 million of two-year floating-rate notes at Libor plus 9 bps.

Chevron priced $550 million of 1.686% two-year fixed-rate notes at a spread of Treasuries plus 45 bps.

The $400 million three-year floating-rate tranche priced at Libor plus 21 bps.

Chevron sold $600 million of 1.991% three-year fixed-rate notes at a spread of 50 bps over Treasuries.

The $300 million five-year floating-rate tranche priced at Libor plus 48 bps.

Chevron priced $700 million of 2.498% five-year fixed-rate notes at a Treasuries plus 60 bps spread.

In the final tranche, the company priced $1 billion of 2.895% seven-year notes at a spread of 70 bps over Treasuries.

BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, MUFG and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including refinancing a portion of commercial paper.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

KfW prices $4 billion

KfW priced $4 billion of 1.75% three-year global notes (Aaa/AAA/AAA) on Tuesday at 99.993 with a spread of Treasuries plus 31.5 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes will be guaranteed by the Federal Republic of Germany.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Nomura International plc were the managers.

KfW is a government-backed bank based in Frankfurt.

Royal Bank sells $2.1 billion

Royal Bank of Canada priced $2.1 billion of three-year series G senior medium-term fixed- and floating-rate notes (Aa3/AA-/AA) in two parts on Tuesday, according to FWP filings with the SEC.

Royal Bank of Canada priced $600 million of three-year floating-rate notes at par to yield Libor plus 38 bps.

The bank sold $1.5 billion of 2.125% notes due March 2, 2020 at 99.928 to yield 2.15%, or a spread of Treasuries plus 67 bps.

RBC Capital Markets, LLC, BofA Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.

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

Georgia Power brings $850 million

Georgia Power priced an upsized $850 million of senior notes (A3/A-/A+) in two tranches on Tuesday, according to a market source and an FWP filing with the SEC.

Georgia Power placed $450 million of 2% series 2017A notes due March 30, 2020 at 99.952 to yield 2.016%. The three-year notes priced with a spread of Treasuries plus 53 bps.

The company sold $400 million of 3.25% series 2017B 10-year notes at 99.887 to yield 3.263% and a spread of Treasuries plus 90 bps.

Georgia Power upsized the deal to $850 million from $800 million.

Barclays, J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and UBS Securities LLC were the bookrunners.

Proceeds will be used to repay a portion of the company’s $115 million of short-term debt and for general corporate purposes.

The electric utility is based in Atlanta.

Discovery Communications prices

Discovery Communications priced $650 million of senior notes (Baa3/BBB-/BBB-) in two parts on Tuesday, according to a market source and an FWP filing with the SEC.

The company priced $450 million of 3.8% notes due 2024 at 99.811 to yield 3.831% and a spread of Treasuries plus 165 bps.

Discovery Communications sold $200 million in a reopening of its 4.9% notes due March 11, 2026 at 105.038 to yield 4.206%. The notes priced at a spread of 185 bps over Treasuries.

The company originally sold $500 million of the notes on March 8, 2016 at 99.633 to yield 4.947% and a spread of 312.5 bps over Treasuries. The total outstanding now is $700 million.

Both tranches priced on the tight side of guidance.

Barclays, Citigroup Global Markets Inc., RBC Capital Markets Corp., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities, BofA Merrill Lynch and Mizuho Securities USA Inc. were the bookrunners for the notes due 2024.

Citigroup, J.P. Morgan, BofA Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, Mizuho Securities and RBC were the lead managers for the add-on.

The notes are guaranteed by Discovery Communications, Inc.

Proceeds will be used for a tender offer for up to $600 million of debt securities and for general corporate purposes, including repaying or refinancing debt.

The global media company is based in Silver Spring, Md.

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