Jackson National Life, Federal Realty, Municipality Finance price; Kroger bonds trade wider

By Cristal Cody

Tupelo, Miss., June 20 – Primary action slowed on Tuesday with two corporate deals priced in the high-grade bond market.

“Not a great day to be in the market,” a syndicate source said.

Deal action was led by Jackson National Life Global Funding’s $1.1 billion three-part offering of notes.

Federal Realty Investment Trust priced $400 million in two parts, including an add-on.

Also, Municipality Finance plc priced a $250 million reopening of its floating-rate notes due Feb. 7, 2020.

In the secondary market, Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) have softened more than 10 basis points since Friday to 105 bps bid on Tuesday, a source said.

The notes tightened about 85 bps on Friday to 92 bps bid following the news Amazon.com, Inc. will purchase the natural and organic foods grocer for $13.7 billion in cash.

Austin, Texas-based Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at a Treasuries plus 300 bps spread.

The acquisition is expected to close in the second half of the year.

Bonds from other retailers also have seen impact in secondary trading since the deal was announced, market sources report.

Kroger Co.’s senior notes (Baa1/BBB/BBB) were unchanged on Tuesday but trading about 20 bps to 30 bps wider than issuance, according to a market source.

The Cincinnati-based grocery retailer’s 2.65% notes due Oct. 15, 2026 were quoted at 136 bps bid. Kroger sold $750 million of the notes on Sept. 26 at a spread of 110 bps over Treasuries.

Kroger’s 4.45% notes due Feb. 1, 2047 traded flat at 180 bps bid on Tuesday. Kroger sold $1 billion of the bonds on Jan. 17 at a spread of 150 bps over Treasuries.

The Markit CDX North American Investment Grade index closed the day more than 1 bp wider at a spread of 62 bps.

Jackson National Life prices

Jackson National Life Global Funding priced $1.1 billion of notes (A1/AA/AA-) in three tranches on Tuesday, according to a market source.

The company sold $350 million of floating-rate notes due Dec. 27, 2018 at Libor plus 25 bps, on the tight side of guidance of Libor plus 27 bps area, plus or minus 2 bps.

Jackson National Life priced $400 million of five-year floating-rate notes on top of guidance at Libor plus 73 bps.

The company also sold $350 million of 2.5% five-year fixed-rate notes on top of talk at a spread of Treasuries plus 80 bps.

BofA Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were the lead managers.

The company is a financing arm of Lansing, Mich.-based Jackson National Life Insurance Co.

Federal Realty sells notes

Federal Realty Investment Trust priced $400 million of notes (A3/A-/) in two tranches on the tight side of talk on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The trust sold $300 million of new 3.25% 10-year notes at 99.083 to yield 3.358%. The notes priced with a Treasuries plus 120 bps spread.

Federal Realty Investment Trust also sold a $100 million add-on to its existing 4.5% notes due Dec. 1, 2044 at 105.76 to yield 4.143% and a spread of Treasuries plus 140 bps.

The trust originally sold $250 million of the notes on Nov. 10, 2014 at 98.86 to yield 4.57% and a spread of Treasuries plus 148 bps. Federal Realty Investment Trust also priced a $200 million reopening on March 11, 2015 at 105.379 to yield 4.179% and a spread of 155 bps over Treasuries.

The total outstanding now is $550 million.

Citigroup Global Markets Inc., Deutsche Bank Securities, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

Federal Realty intends to use the proceeds to pay down the balance under its revolving credit facility and for general corporate purposes.

The real estate investment trust for retail and mixed-use buildings is based in Rockville, Md.

Municipality Finance reopens

Municipality Finance (Aa1/AA+/) priced a $250 million add-on to its floating-rate notes due Feb. 7, 2020 on Tuesday on top of talk with a yield of Libor plus 4 bps, according to a market source.

Barclays, RBC Capital Markets, LLC and Scotia Capital (USA) Inc. were the lead managers.

Municipality Finance originally sold $500 million of the floaters on Jan. 11 at Libor plus 17 bps. The total outstanding now is $750 million.

The Helsinki, Finland-based credit institution provides funding for the public sector in Finland.

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