Exelon prices bonds for Pepco merge; Fortune, Dun & Bradstreet do deals; Apple firms

By Aleesia Forni and Cristal Cody

Virginia Beach, June 8 – Exelon Corp., Fortune Brands Home & Security, Inc., Dun & Bradstreet Corp. and Fulton Financial Corp. came to the high-grade primary bond market with new bonds on Monday.

Exelon’s $4.2 billion acquisition financing highlighted the session, with all tranches selling between 15 basis points to 20 bps tight of initial price thoughts.

The deal’s order book was around 4.5 times oversubscribed.

Fortune Brands, meanwhile, sold an upsized $900 million two-part issue of notes at the tight end of guidance.

Also on Monday, Dun & Bradstreet offered a $300 million five-year issue of senior notes, while Fulton Financial tapped the market for a $150 million add-on to its existing tier 2 subordinated notes 2024.

The session also saw KfW, Inter-American Development Bank and Cantor Fitzgerald LP announce new deal plans.

Investment-grade bonds headed out mixed and credit spreads weakened on Monday, according to market sources.

The Markit CDX North American Investment Grade series 23 index widened 1 bp to a spread of 68 bps.

Apple Inc.’s bonds (Aa1/AA+/) traded about 1 bp to 2 bps tighter over the day. The company kicked off its annual Worldwide Developers Conference on Monday.

In other trading, McDonald’s Corp.’s senior notes (A3/A-/BBB+) priced in May traded flat to 4 bps wider after the company reported May sales. McDonald’s said global same-store sales fell 0.3% in May.

PepsiCo Inc.’s 2.75% senior notes due 2025 traded 3 bps softer over the day.

Exelon sells $4.2 billion

Exelon was in the market on Monday with a $4.2 billion five-tranche offering of senior notes (Baa2/BBB-/BBB+), according to a market source.

The sale included $550 million of 1.55% two-year notes priced at 99.932 to yield 1.585%. The notes sold at a spread of Treasuries plus 90 bps.

Pricing was at the tight end of the Treasuries plus 95 bps area talk, having tightened from initial guidance set in the 110 bps area over Treasuries.

A second tranche was $900 million of 2.85% five-year notes sold at 99.981 to yield 2.854%, or Treasuries plus 115 bps.

Price guidance was set in the Treasuries plus 120 bps area, having tightened from initial talk in the Treasuries plus 135 bps area.

There was a $1.25 billion 3.95% 10-year note priced at Treasuries plus 160 bps. Pricing was at 99.795 to yield 3.975%.

The notes sold at the tight end of the Treasuries plus 175 bps area guidance, which was unchanged from initial talk.

A $500 million 4.95% 20-year note priced at 99.722 to yield 4.972%, or Treasuries plus 185 bps.

Pricing was at the tight end of the Treasuries plus 190 bps area guidance. Initial talk was set in the Treasuries plus 200 bps area.

Finally, $1 billion of 5.1% 30-year bonds sold at 99.664 to yield 5.122%, or Treasuries plus 200 bps.

Guidance was in the Treasuries plus 205 bps area, having tightened from the Treasuries plus 215 bps area.

Plans for a two-year floating-rate tranche of notes were dropped prior to the deal’s launch.

Barclays, Goldman Sachs & Co., BNP Paribas Securities Corp., MUFG, Mizuho Securities USA Inc. and Scotia Capital (USA) Inc. are the bookrunners.

Proceeds will be used fund a portion of the purchase price of the merger between Exelon and Pepco Holdings, Inc., with any remaining proceeds used for general corporate purposes, which may include the repayment of debt.

Exelon is the parent of Exelon Generation and is a utility services holding company based in Chicago.

Fortune Brands upsizes

In other primary happenings, Fortune Brands Home priced an upsized $900 million issue of senior notes (Baa3/BBB/BBB) on Monday in tranches due 2020 and 2025, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $400 million tranche of 3% five-year notes priced at 99.972 to yield 3.006%, or Treasuries plus 130 bps.

A $500 million tranche of 4% 10-year notes priced at 99.357 to yield 4.079% with a spread of Treasuries plus 170 bps.

Both tranches sold at the tight end of price guidance.

BofA Merrill Lynch and J.P. Morgan Securities LLC are the active bookrunners. Passive bookrunners were Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC.

Proceeds will be used to repay debt under a revolving credit facility, with any remaining proceeds being used to repay term loan debt and for general corporate purposes.

Fortune Brands is a consumer brands company based in Deerfield, Ill.

Dun & Bradstreet offering

Dun & Bradstreet priced $300 million of 4% senior notes (/BBB-/BBB) due June 15, 2020 on Monday at Treasuries plus 237.5 bps, according to an FWP filing with the SEC.

Pricing was at 99.61 to yield 4.087%.

The notes sold tight of initial price talk set in the Treasuries plus 250 bps area.

JPMorgan, BofA Merrill Lynch, Barclays and HSBC Securities are the bookrunners.

Proceeds will be used to repay credit facility borrowings and for general corporate purposes.

The business information provider is based in Short Hill, N.J.

Fulton add-on

Fulton Financial sold a $150 million add-on to its existing 4.5% tier 2 subordinated notes (Baa1/BBB) due Nov. 15, 2024 on Monday at Treasuries plus 215 bps, according to a source away from the trade.

Pricing was at 99.708 to yield 4.538%.

Sandler O’Neill + Partners LP and Keefe Bruyette & Woods are the bookrunners.

Proceeds will be used to fund the anticipated redemption of the company’s 6.29% junior subordinated deferrable interest debt securities due 2036.

The original $100 million issue of notes priced at Treasuries plus 220 bps on Nov. 12, 2014.

Fulton Financial is a bank holding company based in Lancaster, Pa.

IADB sets talk

Inter-American Development Bank set price talk for a planned benchmark five-year offering of notes (Aaa/AAA) in the area of mid-swaps plus 1 bp, according to a market source.

BNP Paribas, HSBC, Morgan Stanley & Co. LLC and Nomura are the joint bookrunners.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

KfW on deck

KfW (Aaa/AAA/) set price talk on Monday for a benchmark issue of five-year global notes in the area of mid-swaps plus 3 bps, according to a market source.

The deal is expected to price on Tuesday.

The bookrunners are Goldman Sachs, JPMorgan and TD Securities.

The German government-owned development bank is based in Frankfurt.

Cantor Fitzgerald eyes deal

Cantor Fitzgerald is planning to sell $300 million of senior unsecured debt (expected: //BBB-), according to a Fitch Ratings press release.

Proceeds will be used to repay $300 million of senior notes due June 26, 2015.

Cantor Fitzgerald is a New York-based financial services firm.

Apple firms

Apple’s 3.2% notes due 2025 firmed 2 bps to 91 bps bid on Monday, a source said.

The company sold $2 billion of the 10-year notes on May 6 at Treasuries plus 100 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

McDonald’s flat to weaker

McDonald’s 2.2% notes due 2020 were unchanged on Monday at 76 bps bid, a market source said.

The company sold $700 million of the notes on May 18 at Treasuries plus 70 bps.

McDonald’s 4.6% notes due 2045 eased 4 bps to 164 bps bid in the secondary market.

The issue priced in a $600 million offering on May 18 at Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

PepsiCo weaker

PepsiCo’s 2.75% notes due 2025 eased 3 bps to 96 bps bid, according to a market source.

The company sold $1 billion of the notes (A1/A-/A) on April 27 at a spread of Treasuries plus 87 bps.

PepsiCo is a Purchase, N.Y.-based global food and beverage company.

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