High-grade issuers pack primary; Wells Fargo, Bank of America, NRG, Cargill, Goldman price

By Cristal Cody

Tupelo, Miss., May 20 – Investment-grade issuers flooded the primary market on Monday with more than $9 billion of bond deals in what is expected to be a front-loaded supply week.

Wells Fargo Bank NA led volume over the day with a $2.1 billion two-part offering of senior bank notes.

Bank of America NA priced $1.75 billion of two-year subordinated floating-rate notes.

Goldman Sachs Bank USA came with $1 billion of two-year floating-rate senior notes priced at the Secured Overnight Financing Rate benchmark rate.

Meanwhile, Oncor Electric Delivery Co. LLC sold $1.3 billion of senior secured notes in three tranches, including an add-on.

NRG Energy Inc. priced $1.1 billion of senior secured first-lien notes in two parts.

Cargill Inc. brought $1 billion of senior notes in two tranches to the primary market on Monday.

Also, Charles Schwab Corp. sold $600 million of 10-year senior notes, while Ohio Power Co. placed $450 million of 30-year senior notes.

In addition, on Monday Enstar Group Ltd. was marketing new 10-year senior notes.

Coming up on Tuesday, Kommuninvest I Sverige AB plans to price a $1 billion Rule 144A and Regulation S offering of two-year notes, according to an informed source. Initial price talk was in the mid-swaps plus 6 basis points area.

About $20 billion to $25 billion of deal volume, with the potential for as little as $15 billion of supply, is forecast by market sources for the week.

Supply is expected to thin by mid-week with the bond markets scheduled to close at 2 p.m. ET on Friday and remain closed on Monday for the Memorial Day holiday.

More than $29 billion of investment-grade bonds priced in the past week.

The “new issue calendar should remain active” this week as the end of the first quarter reporting season approaches with $22 billion of average historical seasonal volume, according to a BofA Merrill Lynch research note released on Monday.

The Markit CDX North American Investment Grade 32 index softened nearly 2 bps on Monday to a spread of 64 bps.

Wells Fargo Bank prices

Wells Fargo Bank sold $2.1 billion of senior bank notes (Aa2/AA-/AA-) in two tranches on Monday, according to a market source.

The bank priced $1 billion of three-year floating-rate notes at Libor plus 62 bps.

A $1.1 billion tranche of 2.897% three-year fixed-to-floating-rate notes priced with a Treasuries plus 68 bps spread. The notes will reset after the initial fixed-rate period to a floating rate of Libor plus 61 bps.

Wells Fargo Securities LLC was the bookrunner.

The bank is a subsidiary of San Francisco-based Wells Fargo & Co.

Bank of America brings $1.75 billion

Bank of America priced $1.75 billion of subordinated floating-rate notes due May 24, 2021 (Aa3/A-/AA-) on Monday at Libor plus 35 bps, according to a market source.

The notes were initially talked to price in the Libor plus 40 bps area.

BofA Securities, Inc. was the bookrunner.

The financial services company is a subsidiary of Charlotte, N.C.-based Bank of America Corp.

Oncor Electric sells three tranches

Oncor Electric Delivery priced $1.3 billion of senior secured notes (A2/A+/A) in three tranches on Monday, including a reopening, according to a market source.

Oncor sold $500 million of 2.75% five-year notes on the tight side of guidance at a spread of 55 bps over Treasuries.

The company priced a $300 million add-on to its 3.7% notes due Nov. 15, 2028 at a spread of Treasuries plus 78 bps, on the firm side of guidance.

In the original issue priced Aug. 7, Oncor sold $350 million of the 3.7% notes with a Treasuries plus 73 bps spread. The total outstanding is now $650 million.

A $500 million tranche of 3.8% new 30-year notes priced on the the tight side of guidance with a spread of 100 bps over Treasuries.

Barclays, MUFG, Mizuho Securities USA LLC and Wells Fargo Securities were the bookrunners.

Oncor Electric Delivery is an electric company based in Dallas.

NRG raises $1.1 billion

NRG Energy priced $1.1 billion of senior secured first-lien notes (Baa3/BBB-/) in two tranches in a Rule 144A and Regulation S transaction on Monday, according to market sources and a news release.

The company sold $600 million of 3.75% five-year notes at 99.971 and a spread of 155 bps over Treasuries. Initial price talk was in the Treasuries plus 175 bps area.

A $500 million tranche of 4.45% 10-year notes priced at 99.869 and with a Treasuries plus 205 bps spread, tighter than initial talk in the 225 bps over Treasuries area.

BofA Securities, Citigroup Global Markets Inc., Credit Suisse Securities (USA), J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

The notes are guaranteed by NRG’s current and future subsidiaries that guarantee debt under its credit agreement.

NRG Energy is a power company based in Princeton, N.J. and Houston, Texas.

Goldman Sachs prices $1 billion

Goldman Sachs Bank USA priced $1 billion of floating-rate senior notes due May 24, 2021 (A1/A+/A+) at par on Monday to yield the Secured Overnight Financing Rate plus 60 bps, according to a market source.

Initial price talk was in the SOFR plus 70 bps area.

Goldman, Sachs & Co. LLC was the bookrunner.

Goldman Sachs Bank USA is a New York City-based banking and financial services company and subsidiary of Goldman Sachs Group Inc.

Cargill prints two tranches

Cargill sold $1 billion of senior notes (A2/A/A) in two tranches on Monday, according to a market source.

A $650 million tranche of 3.25% 10-year notes priced at a spread of Treasuries plus 90 bps. Price guidance was in the Treasuries plus 90 bps area, plus or minus 2.5 bps.

Cargill sold $350 million of 3.875% 30-year notes with a Treasuries plus 112.5 bps spread. The notes were guided to print with a 112.5 bps over Treasuries spread, plus or minus 2.5 bps.

BofA Securities, Barclays and J.P. Morgan Securities were the active bookrunners.

Cargill is a Minneapolis, Minn.-based food and agriculture company.

Charles Schwab in primary

Charles Schwab sold $600 million of 3.25% 10-year senior notes (A2/A/A) on Monday at a spread of 87.5 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Price guidance was in the Treasuries plus 87.5 bps area, plus or minus 2.5 bps.

The notes priced at 99.653 to yield 3.291%.

Credit Suisse Securities, BofA Securities and Citigroup Global Markets were the bookrunners.

Charles Schwab is a brokerage and financial services company based in San Francisco.

Ohio Power sells 30-year notes

Ohio Power sold $450 million of 4% 30-year senior notes on Monday at 99.756 to yield 4.014%, according to an FWP filing with the SEC.

The notes (A2/A-/) priced at a spread of Treasuries plus 118 bps.

BNY Mellon Capital Markets, LLC, Credit Agricole Securities (USA) Inc., Credit Suisse Securities and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Ohio Power is a Columbus, Ohio-based electricity provider and subsidiary of the American Electric Power Co., Inc.

Enstar Group markets issue

Meanwhile, Enstar Group was marketing new senior notes due 2029 (/BBB/BBB) in the primary market on Monday, according to a 424B2 filing with the SEC.

Bookrunners are Wells Fargo Securities, HSBC Securities (USA) Inc., J.P. Morgan Securities and SunTrust Robinson Humphrey.

Enstar is a Hamilton, Bermuda-based company that acquires and manages insurance and reinsurance companies.

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