Issuers flood market; Shell, Mizuho, RBS, Valero price; heavy bond supply forecast; CDX eases

By Cristal Cody

Eureka Springs, Ark., Sept. 7 – High-grade issuers flooded the primary market on Wednesday, pricing more than $15 billion of bonds during the session.

Issuers including Shell International Finance BV, Public Service Electric & Gas Co., Export Development Canada and Dr Pepper Snapple Group Inc. priced.

Shell tapped the market with a $4.75 billion five-part offering of guaranteed notes.

Mizuho Financial Group, Inc. sold $3.25 billion of notes in three tranches.

Royal Bank of Scotland Group plc priced $2.65 billion of seven-year notes on Wednesday.

Also, Valero Energy Corp. sold $1.25 billion of 10-year notes.

TJX Cos., Inc. upsized an offering of 10-year notes to $1 billion from $750 million.

W.P. Carey Inc. priced $350 million of 10-year notes during the session.

In addition, Public Service Electric & Gas Co. sold $425 million of 10-year secured medium-term notes.

Also on Wednesday, Ares Capital Corp. kicked off a three-day roadshow for a benchmark-size SEC-registered transaction.

Market sources expect investment-grade bond issuance over the month to soar past $100 billion.

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

In the secondary market, Home Depot Inc.’s $2 billion two-part offering of notes (A2/A/A) priced on Tuesday traded about 1 bp to 4 bps tighter earlier in the day.

Magellan Midstream Partners, LP’s 4.25% notes due 2046, priced in a $500 million tranche on Tuesday, traded flat to 1 bp better.

Shell sells $4.75 billion

Shell International Finance sold $4.75 billion of guaranteed senior notes (Aa2/A) in five tranches on Wednesday, according to a market source.

The company priced $500 million of three-year floating-rate notes at Libor plus 35 bps.

Shell sold $1 billion of 1.375% three-year notes at 53 bps over Treasuries.

The company priced $1 billion of 1.8% five-year notes at a 70 bps plus Treasuries spread.

In the fourth tranche, Shell sold $1 billion of 2.5% 10-year notes at 108 bps over Treasuries.

Shell also brought $1.25 billion of 3.75% 30-year bonds at a spread of 155 bps plus Treasuries.

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

The notes will be guaranteed by Royal Dutch Shell plc, according to a 424B5 filing with the Securities and Exchange Commission.

The Hague, the Netherlands-based oil and gas company plans to use the proceeds for general corporate purposes.

Mizuho prices $3.25 billion

Mizuho Financial Group sold $3.25 billion of senior notes in three tranches on Wednesday, according to a market source.

The company priced $1.25 billion of five-year floating-rate notes at Libor plus 114 bps.

Mizuho sold $1 billion of 2.273% five-year notes at Treasuries plus 115 bps.

The $1 billion tranche of 2.839% 10-year notes priced at 130 bps over Treasuries.

Mizuho Securities USA Inc., JPMorgan, Goldman Sachs, BofA Merrill Lynch and HSBC Securities (USA) Inc. were the bookrunners.

The notes will be non-callable, according to a 424B5 filed with the SEC.

Proceeds from the deal will be used for general corporate purposes.

Mizuho is a Tokyo-based financial institution.

RBS prices $2.65 billion

RBS priced $2.65 billion of 3.875% seven-year senior notes on Wednesday at 99.97 to yield 3.88%, according to an FWP filing with the SEC.

The notes (Ba1/BBB-/BBB+) priced with a spread of 250 bps plus Treasuries.

RBS Securities Inc., BNP Paribas Securities Corp., BofA Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

RBS is a banking and financial services company based in Edinburgh.

Valero sells $1.25 billion

Valero Energy sold $1.25 billion of 3.4% 10-year senior notes at 99.655 to yield 3.441%, according to an FWP filing with the SEC on Wednesday.

The notes (Baa2/BBB/BBB) priced with a spread of 190 bps plus Treasuries.

Citigroup, Barclays, Mizuho, RBC Capital Markets Corp., JPMorgan, Morgan Stanley, MUFG and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including to fund the redemption of $750 million of 6.125% senior notes due 2017 and $200 million of 7.2% senior notes due 2017.

San Antonio-based Valero is an oil refinery owner and operator.

Export Development prices

Export Development Canada (Aaa/AAA) sold $1 billion of 1% three-year notes on Wednesday at 99.862 to yield 1.047%, according to an FWP filing with the SEC.

The notes priced with a spread of 19.35 bps over Treasuries. The notes were talked to price in the mid-swaps plus 3 bps area, according to a market source.

BMO Capital Markets Corp., Citigroup, JPMorgan and RBC were the lead managers.

Ottawa-based Export Development Canada is a Canadian government-owned export credit agency.

TJX upsizes

TJX priced an upsized $1 billion of 2.25% 10-year senior notes with a spread of 80 bps over Treasuries on Wednesday, according to a market source.

The notes priced on top of guidance of 80 bps, plus or minus 2 bps.

The deal was upsized from $750 million.

Deutsche Bank Securities Inc., BofA Merrill Lynch, JPMorgan and Wells Fargo were the bookrunners.

The notes will have a make-whole call until three months before maturity and will then be redeemable at par, according to a 424B2 filing with the SEC.

Proceeds will be used to redeem the company’s $375 million of 6.95% notes due April 15, 2019, and remaining funds will be used for working capital and other general corporate purposes.

The retailer of off-price apparel and home fashions is based in Framingham, Mass.

Dr Pepper Snapple sells bonds

Dr Pepper Snapple Group sold $400 million of 2.55% 10-year senior notes with a spread of 105 bps over Treasuries on Wednesday, according to an FWP filing with the SEC.

The notes (Baa1/BBB+) priced at 99.676 to yield 2.587%.

Credit Suisse Securities (USA) LLC, JPMorgan and Morgan Stanley were the bookrunners.

Proceeds will be used to redeem $360 million of the company’s $724 million outstanding 6.82% senior notes due 2018 and for general corporate purposes.

The maker of non-alcoholic beverages is based in Plano, Texas.

W.P. Carey raises $350 million

W.P. Carey priced $350 million of 4.25% 10-year senior notes with a spread of 275 bps over Treasuries on Wednesday, according to an FWP filing with the SEC.

The notes (Baa2/BBB) priced at 99.682 to yield 4.289%.

JPMorgan, Barclays and Citigroup were the bookrunners.

Proceeds will be used to reduce debt under the company’s credit facility and revolver and for general corporate purposes.

New York-based W.P. Carey is a publicly traded net-lease real estate investment trust.

PSE&G sells $425 million

Public Service Electric & Gas sold $425 million of 2.25% 10-year secured medium-term notes, series L, at 99.671 with a spread of 75 bps over Treasuries on Wednesday, according to a market source and an FWP filing with the SEC.

The notes were talked to price in the 75 bps to 80 bps range.

Credit Suisse, MUFG, Wells Fargo, BNY Mellon Capital Markets LLC and Mizuho were the lead managers.

Proceeds will be used for general corporate purposes.

PSE&G is a Newark, N.J.-based utility.

Ares Capital holds roadshow

Ares Capital (/BBB/BBB) kicked off a three-day roadshow on Wednesday with a benchmark-size SEC-registered senior transaction expected to follow, according to a 497AD filed with the SEC.

The roadshow will continue through Friday.

BofA Merrill Lynch, Wells Fargo, JP Morgan and SunTrust Robison Humphrey, Inc. are arranging the investor calls.

Ares Capital is a specialty finance company based in New York City.

Home Depot improves

Home Depot’s 2.125% notes due 2026 traded flat to 1 bp tighter in the secondary market at 69 bps offered early Wednesday, according to a market source.

The company sold $1 billion of the 10-year notes on Tuesday at a spread of 70 bps over Treasuries.

Home Depot’s 3.5% notes due 2056 firmed to 131 bps offered in secondary trading.

Home Depot sold $1 billion of the 40-year notes in Tuesday’s offering at Treasuries plus 135 bps.

The home improvement retailer is based in Atlanta.

Magellan flat to tighter

Magellan Midstream Partners’ 4.25% notes due 2046 were quoted over the morning at 209 bps offered in the secondary market, a source said.

The company priced $500 million of the 30-year notes (Baa1/BBB+) on Tuesday at a spread of 210 bps over Treasuries.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

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