EA, Kimberly-Clark issue bonds; credit spreads firm; Comcast improves; Anheuser-Busch weakens

By Aleesia Forni and Cristal Cody

New York, Feb. 17 – Electronic Arts Inc., Kimberly-Clark Corp. and Ryder System Inc. took advantage of what was again a stronger market tone on Wednesday.

Oil prices climbed and stocks were up, while credit spreads closed the day mostly tighter.

In the high-grade space, issuers accessed the market following what had been a volatile month for the primary so far.

Electronic Arts sold $1 billion of notes in two parts in its debut offering, which attracted a book that was more than four times oversubscribed.

And Kimberly-Clark and Ryder each sold their respective new issues inside price guidance.

Medical Properties Trust, Inc. sold an upsized $500 million crossover issue. A market source noted that the deal’s book reached more than $1.1 billion earlier Wednesday.

Elsewhere, Federal Home Loan Banks entered the market with an issue of global notes in two parts, and KfW sold a $4 billion issue at the tightest side of guidance.

The day saw $11.6 billion of new investment-grade issuance price, pushing the week’s total issuance to more than $33 billion.

The Canadian primary markets have “reopened” after a lull in early February for the most part with more issuance expected over the week, a syndicate source said.

“A couple more days would be helpful,” the source said.

On Wednesday, Omers Realty Corp., a Toronto-based real estate investment arm of the Ontario Municipal Employees Retirement System, sold C$375 million of 2.858% eight-year notes at par to yield a spread of 178 basis points versus the interpolated Government of Canada bond curve.

Investment-grade credit spreads tightened over the day.

The Markit CDX North American Investment Grade index firmed 3 bps to close at a spread of 118 bps.

In the secondary market, Comcast Corp.’s new 3.15% senior notes due 2026 priced on Tuesday ended higher.

Anheuser-Busch InBev Finance Inc.’s 3.65% senior notes due 2026 were modestly weaker on the day.

KfW sells $4 billion

KfW priced $4 billion of 1.625% global notes due March 15, 2021 at mid-swaps plus 44 bps on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.971, or Treasuries plus 36.1 bps.

The notes are guaranteed by the Federal Republic of Germany.

Bookrunners are Goldman Sachs & Co., J.P. Morgan Securities LLC and TD Securities.

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

FHLB global notes

Also on Wednesday, Federal Home Loan Banks sold $5 billion of Global Notes in two tranches, according to a company news release.

The issuer sold $3 billion of 0.875% two-year notes at 99.969 to yield 0.89%. The notes sold at Treasuries plus 14 bps via lead managers Barclays, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC.

A $2 billion tranche of 1.375% five-year notes sold at Treasuries plus 19.5 bps. Pricing was at 99.596 to yield 1.459%. Lead managers are Barclays, Deutsche Bank and TD Securities (USA) LLC.

FHLBanks are 12 government-sponsored funding providers.

EA prices tight

Electronic Arts sold a $1 billion two-tranche offering of senior notes (Baa2/BBB-/BBB) on Wednesday, according to a market source and an FWP filed with the SEC.

The sale included $600 million of 3.7% five-year notes sold with a 245 bps spread over Treasuries. The issue sold at 99.85 to yield 3.733%.

The notes sold at the tightest side of guidance set in the Treasuries plus 250 bps area following initial talk in the Treasuries plus 275 bps area.

There was also $400 million of 4.8% 10-year bonds priced at 99.669 to yield 4.842%, or Treasuries plus 300 bps.

Price guidance was set in the Treasuries plus 305 bps area, tightened from talk in the Treasuries plus 325 bps area.

Bookrunners are BofA Merrill Lynch, JPMorgan, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes.

Electronic Arts is a Redwood City, Calif.-based video game maker.

Kimberly-Clark two-parter

There primary also hosted Kimberly-Clark, which sold $800 million of senior notes (A2/A/A) in two parts, according to an FWP filed with the SEC.

There was $400 million of 1.4% three-year notes sold at 99.994 to yield 1.402%, or Treasuries plus 45 bps.

Also, $400 million of 2.75% 10-year bonds sold at 99.628 to yield 2.793%. The notes sold at Treasuries plus 95 bps.

Both tranches sold at the tightest side of price guidance.

The bookrunners were Citigroup, Deutsche Bank and JPMorgan.

Proceeds will be used for general corporate purposes, including the repayment of $250 million of floating-rate notes due May 15, 2016, $300 million of floaters due May 19, 2016 and a portion of outstanding commercial paper debt.

The consumer paper products company is based in Irving, Texas.

Medical Properties upsizes

Medical Properties Trust priced an upsized $500 million issue of split-rated eight-year senior notes (Ba1/BBB-) at par to yield 6 3/8% in a quick-to-market Wednesday transaction, according to a syndicate source.

The deal size was increased from $400 million.

The yield printed on top of yield talk.

BofA Merrill Lynch was the left bookrunner. Barclays, Wells Fargo, Goldman Sachs, JPMorgan and KeyBanc Capital Markets were the joint bookrunners.

The Birmingham, Ala.-based medical real estate investment trust plans to use the proceeds to repay its revolving credit facility.

Ryder new issue

Ryder System sold a $300 million offering of 3.45% senior notes (Baa1/BBB/A-) due Nov. 15, 2021 on Wednesday at Treasuries plus 220 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.918 to yield 3.464%.

The issue sold tighter than guidance set in the Treasuries plus 230 bps area. Price talk was set in the Treasuries plus 250 bps area.

Lloyds Securities, MUFG, U.S. Bancorp Investments Inc. and Wells Fargo are the joint bookrunners.

The transportation and logistics company is based in Miami.

Comcast gains

Comcast’s 3.15% senior notes due 2026 headed out at 100.44 on Wednesday, according to a market source.

The notes (A3/A/A-) traded softer early in the day at 142 bps offered.

Comcast sold $1.5 billion of the notes on Tuesday at 99.362 to yield 3.172% and a spread of Treasuries plus 140 bps.

The provider of entertainment, information and communication products and services is based in Philadelphia.

Anheuser-Busch softens

Anheuser-Busch’s 3.65% notes due 2026 traded at 102.27 late Wednesday afternoon, down slightly from 102.30 on Tuesday, a market source said.

The bonds (A2/A-) were quoted 3 bps weaker over the morning at 158 bps offered.

Anheuser-Busch sold $11 billion of the notes on Jan. 13 at 99.833 to yield 3.67% and a spread of 160 bps over Treasuries.

The brewery is based in Leuven, Belgium.

Paul A. Harris contributed to this review

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