Home Depot, Public Service, Dayton Power, Wintrust price; CDP, Parker-Hannifin eye new issues

By Cristal Cody

Tupelo, Miss., June 3 – High-grade corporate issuers priced about $2.5 billion of bonds over Monday’s session.

Home Depot Inc. placed $1 billion of new 10-year senior notes and a $400 million tap of its 3.9% notes due June 15, 2047.

Public Service Enterprise Group Inc. sold $750 million of five-year senior notes.

Dayton Power & Light Co. came by with a $425 million offering of 30-year senior secured notes.

Wintrust Financial Corp. also priced $300 million of 10-year subordinated notes during the session.

About $10 billion to $15 billion of issuance is forecast this week, though issuance will be dependent on market tone and geopolitical events, sources report.

Investment-grade deal volume was thin last week and missed market forecasts with nearly $6 billion of bonds priced, compared to the $10 billion to $15 billion of issuance predicted.

Speculation is growing that the Federal Reserve will cut rates at its June 18-19 meeting, sources report.

For the month of June, syndicate sources expect about $85 billion of deal volume.

Mergers-and-acquisitions-related funding is expected to slow in June.

May’s high-grade volume included $44.5 billion of merger-related funding from issuers including International Business Machines Corp. and Bristol-Myers Squibb Co., BofA Merrill Lynch analysts said in a global research report released on Monday.

“Looking ahead, we do not expect the $32.9 [billion] of M&A issuance from June last year to repeat this year after the overhang got lifted by a busy May,” the analysts said. “The pipeline of pending M&A deals with IG funding implications at $321 [billion] is near the bottom of the range since we began tracking it four years ago.”

In other activity on Monday, A.P. Moller-Mærsk A/S (Baa3/BBB) continued a roadshow in London and New York that started on Friday for a dollar-denominated Rule 144A and Regulation S offering of notes. The fixed income investor meetings are scheduled to conclude on Tuesday.

Coming up on Tuesday, CDP Financial Inc. plans to price a Rule 144A and Regulation S dollar-denominated offering of two-year guaranteed senior notes.

Looking ahead to Wednesday, Parker-Hannifin Corp. will hold fixed income investor calls for an offering of senior notes.

The Markit CDX North American Investment Grade 32 index ended mostly unchanged at a spread of 70 basis points after going out on Friday more than 3 bps wider.

Home Depot sells $1.4 billion

Home Depot priced $1.4 billion of senior notes (A2/A/) in new and reopened tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

Home Depot priced $1 billion of 2.95% 10-year notes at 99.426 to yield 3.017% and a spread of Treasuries plus 93 basis points.

The company also sold $400 million of 3.9% notes due June 15, 2047 at 102.542 to yield 3.751%, or a Treasuries plus 120 bps spread.

The notes originally priced in a $750 million offering on May 24, 2017 at 99.316 to yield 3.939%, or a Treasuries plus 100 bps spread. The total outstanding is now $1.15 billion.

Barclays, BofA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

Home Depot is an Atlanta-based home improvement retailer.

Public Service prices

Public Service Enterprise Group sold $750 million of 2.875% five-year senior notes (Baa1/BBB/) on Monday at 99.953 to yield 2.885%, or a spread of Treasuries plus 103 bps, according to an FWP filing with the SEC.

Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities, Morgan Stanley, BofA Securities and CIBC World Markets Corp. were the bookrunners.

Public Service Enterprise Group is a Newark, N.J., holding company for public electric utility subsidiaries that include Public Service Electric and Gas Co. and PSEG Power LLC.

Dayton Power taps market

Dayton Power & Light sold $425 million of 3.95% 30-year senior secured notes (A3/BBB+/A-) on Monday at a spread of 145 bps over Treasuries, according to a market source.

The notes priced on the tight side of guidance in the Treasuries plus 150 bps area and better than initial talk in the 155 bps to 160 bps spread area.

BofA Securities and J.P. Morgan Securities were the active bookrunners. Passives were PNC Capital Markets LLC and U.S. Bancorp Investments Inc.

Dayton Power & Light is a Dayton, Ohio-based electricity provider and subsidiary of DPL Inc., an AES Corp. company.

Wintrust in primary market

Wintrust Financial (//BBB/DBRS: BBB (high)) priced $300 million of 4.85% 10-year subordinated notes on Monday at par to yield a spread of 278.2 bps over Treasuries, according to an FWP filed with the SEC.

RBC Capital Markets LLC, U.S. Bancorp Investments and Wells Fargo Securities LLC were the bookrunners.

Wintrust is a Rosemont, Ill.-based financial holding company.

CDP Financial on deck

CDP Financial (Aaa/AAA/AAA) plans to price a Rule 144A and Regulation S dollar-denominated offering of two-year guaranteed senior notes on Tuesday, according to a market source.

Initial price talk on the notes due June 11, 2021 was in the mid-swaps plus 19 bps area.

BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs and HSBC Securities (USA) Inc. are the bookrunners.

Parent La Caisse de depot et placement du Quebec will guarantee the notes.

CDP Financial is a Montreal-based financing arm of the public and parapublic pension plan and insurance program manager.

Parker-Hannifin in pipeline

Parker-Hannifin (Baa1/A/A-) intends to tap the primary market with new senior notes, a source said.

The company plans to hold fixed income investor calls on Wednesday.

Barclays and J.P. Morgan Securities are the arrangers.

Parker-Hannifin is a Cleveland-based manufacturer of motion and control technologies.

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