Primary action slows; H.B. Fuller issues notes; credit spreads firm; Apple bonds soften

By Cristal Cody

Tupelo, Miss., Feb. 9 – U.S. high-grade pricing action slowed on Thursday thanks in part to a winter snowstorm, according to market sources.

H.B. Fuller Co. came to the primary market as the lone reported corporate investment-grade issuer. The company priced $300 million of 10-year senior notes on the tight side of guidance.

In other action, BP Capital Markets plc detailed its $3.1 billion four-tranche offering of notes priced in the previous session.

The Markit CDX North American Investment Grade index tightened 2 basis points on the day to end at a spread of 65 bps.

Apple Inc.’s notes (Aa1/AA+/) priced a week ago softened in secondary trading on Thursday but remained better than issuance.

H.B. Fuller prices notes

H.B. Fuller priced $300 million of 4% 10-year senior notes (Baa3/BBB/) on Thursday on the tight side of guidance at a spread of 165 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes due Feb. 15, 2027 priced at 99.551 to yield 4.055%.

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

The company plans to use about $138 million of the proceeds to repay all borrowings under its revolving credit facility and will use the remaining proceeds to repay a portion of its term loan. Any remaining proceeds will be used for general corporate purposes.

The industrial adhesives, sealants, coatings and specialty materials company is based in St. Paul.

BP Capital details deal

BP Capital Markets detailed its $3.1 billion offering of notes (A2/A-/A) priced in four tranches on Wednesday in an FWP filing with the SEC.

The company sold $750 million of floating-rate notes due Aug. 14, 2018 at par to yield Libor plus 35 bps.

BP Capital Markets priced $500 million in a tap of its 2.315% notes due Feb. 13, 2020 at 100.807 to yield 2.036% and a spread of 65 bps over Treasuries.

The company originally sold $1.25 billion of the notes on Feb. 10, 2015 at par to yield a spread of 80 bps over Treasuries. The total outstanding is $1.75 billion.

In the third tranche, BP Capital priced $1 billion of 3.224% notes due April 14, 2024 at 99.994 to yield 3.224%. The notes priced with spread of Treasuries plus 110 bps.

The final $850 million tranche of 3.588% notes due April 14, 2027 priced at 99.993 to yield 3.588%. The notes were sold at a Treasuries plus 125 bps spread.

The company added the floating-rate tranche to the earlier planned three-part deal, according to a market source.

The notes due 2018, 2020 and 2024 priced on the tight side of guidance, while the 10-year notes priced in line with talk.

Barclays, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., BofA Merrill Lynch, MUFG and RBS Securities Inc. were the bookrunners.

The notes are guaranteed by parent company BP plc.

Proceeds will be used for general corporate purposes.

BP Capital Markets is a financing arm of the London-based oil and gas company.

Apple softens

Apple’s 3.5% notes due Feb. 9, 2027 climbed to head out better at 101.35 from where the notes traded at 100.87 early in the session, a market source said.

The notes ended down from where they traded late Wednesday afternoon at 101.45.

The company sold $2.25 billion of the notes on Feb. 2 at par or a spread of Treasuries plus 88 bps.

Apple’s 4.25% notes due Feb. 9, 2047 continued to slip in secondary trading over the day going out at 101.32 from where they traded late morning at 101.40. The notes were down more than a point from 102.40 seen on Wednesday.

The bonds priced on Feb. 2 in a $1 billion tranche at 99.798 to yield 4.262%, or Treasuries plus 115 bps.

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

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