Oracle, AutoNation, Kellogg, Japan Bank, Canada, Rentenbank price; credit spreads ease

By Cristal Cody

Tupelo, Miss., Nov. 7 – Oracle Corp. led pricing action in the high-grade bond market on Tuesday with a $10 billion five-tranche offering of senior notes.

Corporate and SSA supply was strong over the session.

AutoNation Inc. sold $750 million of senior notes in two tranches.

Kellogg Co. brought $600 million of 10-year senior notes to the primary market.

Textron Inc. sold $350 million of three-year floating-rate notes.

Also, Japan Bank for International Cooperation priced $4.5 billion of guaranteed senior bonds in three tranches.

Canada priced $3 billion of five-year global bonds in its first dollar global bond offering since 2015.

In addition, Landwirtschaftliche Rentenbank came with $1.25 billion of 10-year guaranteed senior global notes.

About $30 billion of bond volume is forecast by market sources for this week.

The Markit CDX North American Investment Grade 29 index eased more than 1 basis point on Tuesday to close at a spread of 54 bps.

Oracle prices $10 billion

Oracle sold $10 billion of senior notes (A1/AA-/A+) in five tranches on Tuesday, according to a company press release.

The company priced $1.25 billion of 2.625% notes due 2023, $2 billion of 2.95% notes due 2024, $2.75 billion of 3.25% notes due 2027, $1.75 billion of 3.8% notes due 2037 and $2.25 billion of 4% notes due 2047.

BofA Merrill Lynch, Wells Fargo Securities LLC and J.P. Morgan Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including stock repurchases, dividend payments, debt repayment and acquisitions.

The computer software and technology company is based in Redwood City, Calif.

AutoNation sells notes

AutoNation sold $750 million of senior notes (Baa3/BBB-/BBB-) in two parts on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

The company priced $450 million of 3.5% seven-year notes at 99.876 to yield 3.52%, or a spread of Treasuries plus 135 bps.

AutoNation sold $300 million of 3.8% 10-year notes at 99.925 to yield 3.809%. The notes priced with a Treasuries plus 150 bps spread.

J.P. Morgan Securities, BofA Merrill Lynch, SunTrust Robinson Humphrey Inc., Wells Fargo Securities, Mizuho Securities USA Inc. and MUFG were the bookrunners.

The Fort Lauderdale, Fla., automotive retailer will use the proceeds to reduce debt under its commercial paper program and/or revolving credit facility and for general corporate purposes.

Kellogg raises $600 million

Kellogg sold $600 million of 3.4% 10-year senior notes on Tuesday at a spread of 112.5 bps over Treasuries, according an FWP filing with the SEC.

The notes (Baa2/BBB/BBB) priced at 99.731 to yield 3.432%.

Barclays, Deutsche Bank Securities Inc. and BofA Merrill Lynch were the bookrunners.

Proceeds will be used for general corporate purposes.

The Battle Creek, Mich.-based company manufactures cereal and convenience foods.

Textron prices floaters

Textron priced $350 million of three-year floating-rate notes (Baa2/BBB/) on Tuesday at par to yield Libor plus 55 bps, according to an FWP filing with the SEC.

BofA Merrill Lynch, Wells Fargo Securities, SMBC Nikko Securities America, Inc. and PNC Capital Markets LLC were the bookrunners.

Proceeds will be used to repay a total of $350 million outstanding as of Sept. 30 under two term loans, one of which matures on Nov. 30, 2018 and bears interest at 2.46694% and the other which matures on March 14, 2019 and bears interest at 2.48444%.

The Providence, R.I.-based multi-industry company operates global aircraft, defense, industrial and finance units.

Japan Bank sells $4.5 billion

Japan Bank for International Cooperation priced $4.5 billion of guaranteed senior bonds (A1/A+) in three tranches on Tuesday, according to an FWP filing with the SEC.

Japan Bank priced $1.5 billion of 2.125% three-year bonds at 99.781 to yield 2.201% and a spread of Treasuries plus 46.4 bps.

The bank sold $1.5 billion of 2.375% five-year bonds at 99.836 to yield 2.41%. The five-year notes priced with a spread of 42.8 bps over Treasuries.

The final $1.5 billion tranche of 2.75% 30-year bonds priced at 99.922 to yield 2.759%, or a Treasuries plus 45.2 bps spread.

J.P. Morgan Securities, Barclays, Daiwa Capital Markets Europe Ltd. and Goldman Sachs International were the bookrunners.

The notes will be guaranteed by Japan.

Proceeds will be used for the bank’s ordinary operations.

The financial institution is based in Tokyo.

Canada prices $3 billion

Canada priced $3 billion of five-year global bonds on Tuesday with a 2% coupon at 99.688 to yield 2.006%, according to a news release from Canada’s Department of Finance and an FWP filing with the SEC.

The bonds (Aaa/AAA/) priced with a spread of Treasuries plus 9 bps.

The order book was more than $6 billion.

BMO Capital Markets Corp., Citigroup Global Markets Ltd., HSBC Bank plc, Scotia Capital (USA) Inc. and TD Securities (USA) LLC were the lead managers.

The offering is Canada’s first U.S. dollar global bond issue since it priced $3.5 billion of bonds in March 2015.

Canada said the issue received strong demand from investors in North America, Europe and Asia. The investor base for the deal included a range of central banks, other official institutions and foreign-based investment funds.

The issue will be listed on the Luxembourg Euro MTF market.

Rentenbank sells $1.25 billion

Landwirtschaftliche Rentenbank (Aaa/AAA/AAA) priced $1.25 billion of 2.5% 10-year guaranteed senior global notes at 99.815 on Tuesday, according to an FWP filed with the SEC.

Bank of Montreal, London Branch, Barclays, Merrill Lynch International and Toronto-Dominion Bank were the bookrunners.

The notes are guaranteed by Germany.

The issue will be listed on the regulated market of the Luxembourg Stock Exchange.

Proceeds will be used for lending activities, including refinancing liabilities.

The German development agency for agribusiness is based in Frankfurt.

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