Amgen, FMS, Baxter among high-grade issuers; credit spreads soften; Duke Energy bonds improve

By Cristal Cody

Eureka Springs, Ark., Aug. 10 – Mid-week pricing action remained strong with several high-grade issuers in the primary market on Wednesday.

Amgen Inc. priced $3.75 billion of five-, seven- and 10-year senior notes and an add-on to its 4.4% senior notes due 2045.

FMS Wertmanagement sold $2 billion of three-year senior notes during the session.

Baxter International Inc. tapped the primary market with a $1.6 billion three-part offering of senior notes.

Bunge Ltd. Finance Corp. raised $700 million in an offering of 10-year senior notes.

Black Hills Corp. priced a $700 million two-part offering of senior notes.

The Markit CDX North American Investment Grade index closed about 1 basis point weaker at a spread of 72 bps.

Duke Energy Corp.’s new senior notes (Baa1/BBB+/BBB+) traded earlier in the day about 2 bps tighter in the secondary market.

The three-month Libor yield rose 2 bps to 81 bps on Wednesday.

Amgen prices $3.75 billion

Amgen priced $3.75 billion of five-, seven- and 10-year senior notes and an add-on to its 4.4% senior notes due 2045 on Wednesday, according to a market source.

The company priced $750 million of 1.85% notes due Aug. 19, 2021 at 80 bps over Treasuries, on the tight side of guidance of 85 bps, plus or minus 5 bps, over Treasuries.

Amgen sold $750 million of 2.25% notes due Aug. 19, 2023 at 95 bps plus Treasuries. The notes were guided at 100 bps over Treasuries, plus or minus 5 bps.

The company placed $1.25 billion of 2.6% notes due Aug. 19, 2026 at 110 bps over Treasuries, on the tight side of guidance of 115 bps, plus or minus 5 bps, over Treasuries.

Amgen priced a $1 billion add-on to its 4.4% senior notes due May 1, 2045 at a spread of Treasuries plus 170 bps. The notes were guided at 175 bps, plus or minus 5 bps, over Treasuries.

Amgen originally sold $1.25 billion of the bonds on April 28, 2015 at 175 bps over Treasuries. The total outstanding is $2.25 billion.

The bookrunners were Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used to repay debt, including borrowings under the company’s term loan credit agreement, to repurchase common stock and for general corporate purposes, according to a 424B3 filed with the Securities and Exchange Commission.

Amgen is a Thousand Oaks, Calif., manufacturer and marketer of human therapeutics based upon advances in cellular and molecular biology

FMS prints $2 billion

FMS Wertmanagement sold $2 billion of 1% three-year senior notes at 99.677 to yield 1.11% on Wednesday, according to a FWP filing with the Securities and Exchange Commission.

The notes due Aug. 16, 2019 (Aaa/AAA/AAA) priced with a spread of mid-swaps plus 8 bps, or 29.7 bps over Treasuries.

The bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch and RBC Capital Markets, LLC.

Proceeds will be used to refinance existing liabilities in order to replace maturing, short-term money market instruments with long-term funding. Any remaining proceeds will be for general corporate purposes.

Munchen, Germany-based FMS Wertmanagement is a German state-owned wind-down agency.

Baxter sells $1.6 billion

Baxter International sold $1.6 billion of senior notes (Baa2/A-/BBB+) in three parts, according to a market source on Wednesday.

The company priced $400 million of 1.7% notes due Aug. 15, 2021 at 65 bps over Treasuries.

Baxter sold $750 million of 2.6% notes due Aug. 15, 2026 at 110 bps over Treasuries.

The company also priced $450 million of 3.5% notes due Aug. 15, 2046 at Treasuries plus 135 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Goldman Sachs & Co. were the bookrunners. Proceeds will be used to redeem some of the company’s outstanding senior notes, including its 1.85% senior notes due January 2017, 1.85% senior notes due June 2018, 5.375% senior notes due June 2018, 4.5% senior notes due August 2019, 4.25% senior notes due March 2020 and 3.2% senior notes due June 2023, according to a 424B2 filed with the Securities and Exchange Commission. Remaining proceeds will be used for general corporate purposes, including the repayment of commercial paper.

Baxter is a medical products and health care company based in Deerfield, Ill.

Bunge places $700 million

Bunge Ltd. Finance priced $700 million of 3.25% 10-year senior notes on Wednesday with a spread of 175 bps over Treasuries, according to a market source.

The notes due Aug. 15, 2026 were guided at 180 bps over Treasuries, plus or minus 5 bps.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

The notes are fully and unconditionally guaranteed by Bunge Ltd., according to a 424B3 filed with the Securities and Exchange Commission.

Proceeds will be used for general corporate purposes, including, but not limited to, the repayment of outstanding debt, which includes debt under the company’s revolving credit facilities.

The White Plains, N.Y.-based agribusiness and food company plans to use the proceeds for general corporate purposes.

Black Hills brings two-parter

Black Hills sold $700 million of senior notes (Baa1/BBB/BBB+) in two tranches on Wednesday, according to a FWP filing with the Securities and Exchange Commission.

The company priced $400 million of 3.15% notes due Jan. 15, 2027 at 99.949 to yield 3.156% and a spread of 165 bps plus Treasuries.

Black Hills priced $300 million of 4.2% notes due Sept. 15, 2046 at 99.455 to yield 4.232%, or Treasuries plus 200 bps.

J.P. Morgan Securities LLC, MUFG, Scotia Capital (USA) Inc., RBC Capital Markets, LLC and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds from the offering, along with proceeds from recent bank loan transactions, will be used to repay outstanding term loans and senior notes and to settle certain outstanding interest rate swaps. Any remaining proceeds may be used for general corporate purposes.

The energy company is based in Rapid City, S.D.

Duke Energy firms

Duke Energy’s 2.65% notes due 2026 traded early Wednesday at 113 bps offered, according to a market source.

The company sold $1.5 billion of the 10-year notes on Tuesday at a spread of 115 bps plus Treasuries.

Duke Energy’s 3.75% notes due 20246 tightened to 148 bps offered in the secondary market, the source said.

The notes priced on Tuesday in a $1.5 billion tranche at a spread of 150 bps over Treasuries.

The diversified energy company is based in Charlotte, N.C.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.