Kellogg, Stanley Black & Decker, Paccar price bonds; credit spreads tighten; McDonald’s mixed

By Cristal Cody

Eureka Springs, Ark., Nov. 7 – Kellogg Co., Stanley Black & Decker, Inc. and Paccar Financial Corp. tapped the high-grade primary market on Monday, while credit spreads tightened 4 basis points over the last session before the U.S. presidential election.

Kellogg sold $600 million of 2.65% seven-year senior notes.

Stanley Black & Decker priced a $345 million remarketing of two-year subordinated notes.

Paccar Financial brought a $100 million offering of three-year medium-term floating-rate notes.

In addition to Tuesday’s election focus, the week also includes the Veterans Day holiday and bond market closure on Friday.

Deal volume is expected to top out at about $10 billion, according to market forecasts.

The Markit CDX North American Investment Grade index closed Monday 4 bps tighter at a spread of 77 bps.

McDonald’s Corp.’s bonds were mixed following the company’s ratings downgrade by Fitch Ratings to BBB from BBB+ on Monday. The company’s notes due 2026 traded tighter, while its longer bonds eased.

Citigroup, Inc.’s 3.2% notes due 2026 were quoted about 3 bps better earlier in the day.

Wells Fargo & Co.’s 3% notes due 2026 firmed about 1 bp.

Kellogg prices $600 million

Kellogg priced $600 million of 2.65% seven-year senior notes (Baa2/BBB/BBB) on Monday at a spread of 107 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes due Dec. 1, 2023 priced at 99.91 to yield 2.664%.

HSBC Securities (USA) Inc., BofA Merrill Lynch and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used to repay the company’s 1.875% 2016 notes when they mature on Nov. 17, 2016 and to repay commercial paper borrowings.

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

Black & Decker remarkets

Stanley Black & Decker priced a $345 million remarketing of 1.622% subordinated notes due Nov. 17, 2018 on Monday at par, according to an FWP filing with the SEC.

The two-year notes (Baa2/A-/BBB+) priced with a spread of 80 bps plus Treasuries.

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

Stanley Black & Decker is a New Britain, Conn.-based maker of hand tools, power tools and accessories.

Paccar sells floaters

Paccar Financial (A1/A+/) sold $100 million of series O three-year medium-term floating-rate notes at par to yield Libor plus 32 bps, according to an FWP filing on Monday with the SEC.

The notes are due Nov. 8, 2019.

BofA Merrill Lynch was the bookrunner for the offering.

Paccar Financial is a financing arm of Bellevue, Wash.-based Paccar Inc.

McDonald’s 3.7% notes firm

McDonald’s 3.7% notes due 2026 firmed 3 bps to 120 bps bid in the secondary market, a source said on Monday afternoon.

The company sold $1.75 billion of the notes (Baa1/BBB+/BBB) on Dec. 2 at a spread of Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

Citigroup tightens

Citigroup’s 3.2% notes due 2026 were quoted about 3 bps tighter early Monday at 142 bps offered, according to a market source.

The notes (Baa1/BBB+/A) were sold on Oct. 18 in a $3 billion tranche at a spread of 145 bps over Treasuries.

Citigroup is a financial services company based in New York.

Wells Fargo improves

Wells Fargo’s 3% notes due 2026 traded about 1 bp better at 124 bps offered, according to a market source earlier on Monday.

Wells Fargo sold $3.5 billion of the notes (A2/A/AA-) on Oct. 19 at a spread of Treasuries plus 130 bps.

The retail, commercial and corporate banking services provider is based in San Francisco.

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