Supply surges ahead of Fed; Boeing, Las Vegas Sands, Ford, Union Pacific; others price notes

By Cristal Cody

Tupelo, Miss., July 29 – Deal volume surged in the high-grade primary market on Monday, led by a $5.5 billion six-tranche offering of senior notes from Boeing Co.

Las Vegas Sands Corp. also tapped the market on Monday with a $3.5 billion three-part offering of senior notes.

Ford Motor Credit Co. LLC sold $2 billion of fixed-rate senior notes in two tranches and dropped a floating-rate tranche.

National Australia Bank Ltd. priced $1.5 billion of 15-year subordinated notes.

Union Pacific Corp. brought $1 billion of fixed-rate senior notes in two parts to the primary market.

Republic Services, Inc. sold $900 million of five-year notes.

Owens Corning came with $450 million of 10-year green senior notes.

In addition, Essex Portfolio, LP sold $400 million of long 10-year guaranteed senior notes.

Supply was expected to be front-loaded this week ahead of the Federal Reserve’s monetary policy decision on Wednesday, according to market sources.

The Federal Open Market Committee begins its two-day meeting on Tuesday. Market sources widely expect a possible rate cut of about 25 basis points up to 50 bps.

Investment-grade bond supply is forecast to total in the $20 billion to $25 billion range with some market sources predicting $30 billion or more of volume this week.

A potential $10 billion to $15 billion investment-grade secured bond deal from T-Mobile U.S. Inc. is being eyed after the company received tentative approval from the Department of Justice, a source said.

On Friday, T-Mobile received federal antitrust approval, pending court approval of a divestiture settlement proposal, to acquire Sprint Corp.

T-Mobile held a roadshow in the United States and Europe in May via Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC.

Investment-grade issuers priced more than $23 billion of bonds last week.

The Markit CDX North American Investment Grade 32 index softened nearly 2 bps on Monday to a spread of 53 bps.

Boeing prices $5.5 billion notes

Boeing priced $5.5 billion of senior notes (A2/A/) in six tranches during the session, according to a market source.

Boeing sold $750 million of 2.3% two-year notes at a spread of 45 bps over Treasuries.

A $1 billion tranche of 2.7% notes due Feb. 1, 2027 priced with a Treasuries plus 80 bps spread.

The company sold $750 million of 2.95% notes due Feb. 1, 2030 at a spread of 90 bps over Treasuries.

A $750 million tranche of 3.25% notes due Feb. 1, 2035 priced with a Treasuries plus 120 bps spread.

Boeing placed $1.25 billion of 3.75% notes due Feb. 1, 2050 at a spread of 120 bps over Treasuries.

Finally, the company priced $1 billion of 3.95% notes due Aug. 1, 2059 at a spread of 140 bps over Treasuries.

J.P. Morgan Securities LLC, Barclays, RBC Capital Markets LLC, Lloyds Securities, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. were the bookrunners for the 2021 notes.

JPMorgan, Mizuho Securities USA Inc., MUFG, BofA Securities Inc., BBVA Securities Inc. and Santander Investment Securities Inc. were bookrunners for the 2027 notes.

JPMorgan, Deutsche Bank Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., Commerzbank Capital Markets Corp. and SG Americas Securities LLC were the bookrunners for the 2030 notes. JPMorgan, Credit Suisse Securities (USA) LLC, SMBC Nikko Securities America, Inc., Credit Agricole CIB, Mizuho Securities USA Inc. and Santander were bookrunners for the 2035 notes.

JPMorgan, BofA Securities, Morgan Stanley & Co. LLC, BBVA Securities, BNP Paribas Securities Corp. and Credit Suisse Securities (USA) LLC were bookrunners for the 2050 notes.

JPMorgan, Citigroup, Goldman Sachs, BNP Paribas Securities Corp., SMBC Nikko and SG Americas Securities LLC were the bookrunners for the 2059 notes.

Boeing is a Chicago-based aerospace company.

Las Vegas Sands sells $3.5 billion

Las Vegas Sands priced $3.5 billion of senior notes (Baa3/BBB-/BBB-) in three tranches on Monday, a market source said.

A $1.75 billion tranche of 3.2% five-year notes priced with a spread of 137.5 bps over Treasuries.

The company sold $1 billion of 3.5% seven-year notes at a Treasuries plus 162.5 bps spread.

A $750 million offering of 3.9% 10-year notes priced with a spread of 187.5 bps over Treasuries.

The notes all printed on the firm side of guidance.

Barclays, BofA Securities, Goldman Sachs, BNP Paribas Securities, Fifth Third Securities Inc., Scotiabank and SMBC Nikko Securities America were the bookrunners.

Las Vegas Sands is a Las Vegas-based developer of multi-use integrated resorts.

Ford Motor brings $2 billion

Ford Motor Credit (Baa2/BBB/BBB) priced $2 billion of fixed-rate senior notes in two tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

Ford Motor Credit sold $1.25 billion of 3.35% notes due Nov. 1, 2022 at 99.948 to yield 3.368%, and a spread of Treasuries plus 155 bps. The notes priced on the firm side of guidance in the Treasuries plus 160 bps area.

Ford also sold $750 million of 4.542% seven-year notes at par to yield a Treasuries plus 260 bps spread. The notes priced on top of guidance.

The company dropped a floating-rate tranche from the final offering.

Citigroup Global Markets, Commerz Markets LLC., HSBC Securities (USA) Inc., Morgan Stanley, Bando Bradesco BBI SA, Barclays and J.P. Morgan Securities were the bookrunners.

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

National Australia Bank prices

National Australia Bank sold $1.5 billion of 3.933% subordinated notes due Aug. 2, 2034 (Baa1/BBB/A+) on Monday at a spread of Treasuries plus 188 bps, according to a market source.

Price guidance was in the Treasuries plus 190 bps area, plus or minus 2 bps.

BofA Securities, Citigroup Global Markets, Goldman Sachs, nabSecurities, LLC and Wells Fargo Securities were the bookrunners.

The bank is based in Melbourne.

Union Pacific raises $1 billion

Union Pacific sold $1 billion of fixed-rate senior notes (Baa1/A-/) in two tranches on Monday, according to a market source.

A $500 million tranche of 3.55% notes due Aug. 15, 2039 priced on the tight side of guidance at a spread of 98 bps over Treasuries.

Union Pacific sold $500 million of 3.95% notes due Aug. 15, 2059 on top of talk at a Treasuries plus 140 bps spread.

BofA Securities, Citigroup Global Markets, Wells Fargo Securities and U.S. Bancorp Investments were the bookrunners.

The railroad transportation company is based in Omaha.

Republic Services in primary

Republic Services sold $900 million of 2.5% five-year notes (Baa2/BBB+/BBB) on Monday at a spread of 70 bps over Treasuries, according to an FWP filed with the SEC.

The notes priced at 99.84 to yield 2.534%.

J.P. Morgan Securities, BofA Securities, Barclays, MUFG, Mizuho Securities, RBC Capital Markets, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey were the bookrunners.

Republic Services is a waste collection company based in Phoenix.

Owens Corning prices $450 million

Owens Corning priced $450 million of 3.95% 10-year green senior notes with a spread of 192 bps over Treasuries on Monday, according to a FWP filing with the SEC.

The notes (Ba1/BBB/BBB-) priced at 99.787 to yield 3.976%.

BofA Securities, Citigroup Global Markets and Wells Fargo Securities were the bookrunners.

Owens Corning is a Toledo, Ohio-based maker of composite building materials.

Essex Portfolio sells notes

Essex Portfolio sold $400 million of 3% guaranteed senior notes due Jan. 15, 2030 (Baa1/BBB+/BBB+) on Monday at a spread of 110 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 98.632 to yield 3.155%.

Wells Fargo Securities, Citigroup Global Markets, J.P. Morgan Securities, U.S. Bancorp Investments, Jefferies LLC and MUFG were the bookrunners.

The notes are guaranteed by Essex Property Trust, Inc.

Palo Alto, Calif.-based Essex Portfolio is a real estate investment trust.

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