AutoNation, Magna, Colonial Pipeline do upsized deals; Barclays, Ford Motor Credit firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 16 – AutoNation Inc., Magna International Inc. and Colonial Pipeline Co. were each in the primary market with upsized bond offerings during a solid session for investment-grade bonds as the Federal Reserve kicked off its two-day policy meeting.

In the day’s largest trade, AutoNation increased its offering to $750 million from initial size thoughts of $600 million.

Magna International’s $650 million 10-year notes offering sold on top of talk and attracted and order book that was more than 3.5 times oversubscribed.

Also on Wednesday, Omega Healthcare Investors Inc. priced $600 million of long 10-year notes, and Colonial Pipeline sold a $350 million issue due 2025.

So far, investment-grade issuance has fallen far short of expectations this week, with only around $8.1 billion pricing.

Sources had anticipated around $25 billion to $30 billion of supply.

Bonds were mixed over Wednesday’s session with traders focused on Thursday’s interest rate decision by the Federal Reserve.

Barclays plc’s 5.25% notes due 2045 came in 4 bps over the session.

Ford Motor Credit Co. LLC’s 4.134% senior notes due 2025 firmed 2 bps in secondary trading.

Morgan Stanley’s 4% senior notes due 2025 headed out flat to 1 bp softer.

The Markit CDX North American Investment Grade index ended 1 bp tighter at a spread of 78 bps.

AutoNation prices tight

AutoNation priced an upsized $750 million issue of senior notes (Baa3/BBB-) in two tranches on Wednesday, according to a market source an FWP filed with the Securities and Exchange Commission.

There was $300 million of 3.35% notes due Jan. 15, 2021 sold at 99.998 to yield 3.351% with a spread of Treasuries plus 175 bps.

A $450 million 4.5% note due Oct. 1, 2025 sold at 99.663 to yield 4.542%, or Treasuries plus 225 bps.

Both tranches sold at the tight end of revised guidance.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. are the bookrunners.

Proceeds will be used to reduce borrowings under a revolving credit facility and for general corporate purposes.

The automotive retailer is based in Fort Lauderdale, Fla.

Magna upsizes, prices

Meanwhile, Magna International sold an upsized $650 million offering of 4.15% 10-year senior notes on Wednesday at Treasuries plus 190 bps, according to a market source and a filing with the SEC.

The size of the issue was increased from a planned $500 million.

The notes (Baa1/A-) priced at 99.61 to yield 4.198%.

Pricing was on top of guidance, which firmed from initial talk in the low-200 bps area over Treasuries.

BofA Merrill Lynch, Citigroup Global Markets Inc. and RBC Capital Markets LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include capital expenditures and acquisitions.

Magna is an automotive supplier based in Aurora, Ont.

Omega sells new issue

Omega Healthcare Investors priced $600 million of 5.25% senior notes (Baa3/BBB-/BBB-) due Jan. 15, 2026 on Wednesday at Treasuries plus 300 bps, a market source said.

Pricing was at 99.717 to yield 5.287%.

The issue sold in line with guidance.

BofA Merrill Lynch and JPMorgan were the bookrunners.

Omega is a Hunt Valley, Md.-based real estate investment trust investing in and providing financing to the long-term care industry.

Colonial taps market

The session also hosted Colonial Pipeline, which priced an upsized $350 million of 3.75% 10-year senior notes on Wednesday at Treasuries plus 150 bps, a market source said.

The issue was increased from a planned $300 million.

The notes (A3/A) sold at 99.726 to yield 3.783%.

Pricing was at the tight end of guidance set in the 162.5 bps area over Treasuries.

Bookrunners were Mizuho Securities, MUFG and Wells Fargo Securities LLC.

The fuel pipeline operator is based in Alpharetta, Ga.

Freddie Mac passes

Freddie Mac said on Wednesday that it would forgo issuing Reference Notes on its Sept. 16 announcement date, according to a company news release.

The government-sponsored enterprise is based in McLean, Va.

Barclays bonds improve

Barclays’ 5.25% notes due 2045 tightened 4 bps to 215 bps bid in the secondary market, a source said.

Barclays sold $1.5 billion of the bonds (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

Ford Motor Credit firms

Ford Motor Credit Co. LLC’s 4.134% notes due 2025 firmed 2 bps to 200 bps bid on Wednesday, according to a market source.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on July 30 at Treasuries plus 187.5 bps.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Morgan Stanley mostly flat

Morgan Stanley’s 4% notes due 2025 were unchanged to 1 bp softer at 153 bps bid in secondary trading, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

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