Daimler, Arrow, Kinder Morgan, Harley, ComEd price; bank, financial paper soft; spreads flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 23 – A hodgepodge of investment-grade issuers made their way to the primary market on Monday, pricing more than $6 billion of new bonds.

Daimler Finance North America LLC sold the day’s largest deal, selling $3 billion of notes in four parts.

The session also saw Arrow Electronics, Inc. price a $700 million offering in two maturities.

Kinder Morgan Inc., Harley-Davidson Financial Services Inc., Commonwealth Edison Co. and Coach Inc. each came to market with upsized new issues.

Kinder Morgan priced its $800 million of 31-year bonds around 17 basis points tight of the mid-point of initial guidance.

Commonwealth Edison was swamped with orders for its new $400 million offering of mortgage bonds, attracting a book that was more than six times oversubscribed.

Harley-Davidson Financial and Coach were each in the market with $600 million offerings, both priced at the tight end of talk.

Investment-grade corporate bonds traded flat to modestly softer on Monday, according to market sources.

The Markit CDX North American Investment Grade index was unchanged at a spread of 63 bps.

Bank and financial paper was mostly weaker in the secondary market.

JPMorgan Chase & Co.’s 3.125% notes due 2025 were quoted 2 bps softer in secondary trading.

Goldman Sachs Group Inc.’s 3.5% notes due 2025 eased 3 bps.

Bank of America Corp.’s 4% notes due 2025 traded 5 bps weaker going out.

Wells Fargo & Co.’s 2.15% notes due 2020 widened more than 5 bps but remain tighter than issuance.

Daimler sells $3 billion

Daimler Finance sold $3 billion of notes (A3/A-/A-) on Monday in four tranches, according to an informed source.

A $250 million tranche of floating-rate notes due 2017 priced at par to yield Libor plus 30 bps.

Pricing was at the tight end of the 30 bps to 35 bps over Libor talk.

A second tranche was $1 billion of 1.65% notes due 2018 priced at 99.916 to yield 1.679%, or 65 bps over Treasuries.

The notes sold at the tight end of talk set at 65 bps to 70 bps over Treasuries.

There was also a $500 million tranche of floating-rate notes due 2018 priced at par to yield Libor plus 42 bps. Talk was set at the Libor equivalent to the three-year notes.

Finally, $1.25 billion of 2.25% notes due 2020 sold at 75 bps over Treasuries.

Pricing was at 99.77 to yield 2.299%.

The notes priced at the tight end of the 75 bps to 80 bps over Treasuries talk.

Proceeds will be used for general corporate purposes, including refinance existing debt.

The bookrunners are Barclays, BBVA Securities Inc., J.P. Morgan Securities LLC, MUFG and Societe Generale.

The financing unit of Daimler AG is based in Stuttgart, Germany.

Kinder Morgan upsizes

Kinder Morgan sold an upsized $800 million issue of 5.05% senior notes due Feb. 15, 2046 on Monday with a spread of Treasuries plus 240 bps, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The notes (Baa3/BBB-/BBB-) sold at the tight end of price talk set in the 245 bps area over Treasuries, having tightened from guidance set in the 255 bps to 260 bps area over Treasuries.

Pricing was at 99.784 to yield 5.064%.

The bookrunners were Morgan Stanley & Co. LLC, RBC Capital Markets LLC, RBS Securities Inc., DNB Markets, MUFG, Mizuho Securities, Scotia Capital (USA) Inc., SMBC Nikko and SunTrust Robinson Humphrey Inc.

Proceeds will be used to repay borrowings under the company’s revolving credit facility and commercial paper debt and for general corporate purposes.

Kinder Morgan is a Houston-based pipeline operator.

Arrow two-parter

Arrow Electronics priced $700 million of senior notes (Baa3/BBB-/) in seven-year and 10-year tranches on Monday, according to a market source and an FWP filing with the SEC.

A $350 million tranche of 3.5% notes due 2022 priced at 99.241 to yield 3.622%, or Treasuries plus 175 bps.

There was also $350 million of 4% notes due 2025 sold with a spread of 205 bps over Treasuries. The notes priced at 99.031 to yield 4.118%.

Both tranches sold at the tight end of price talk.

BofA Merrill Lynch, JPMorgan and Morgan Stanley were the bookrunners.

Proceeds will be used to refinance outstanding 3.375% notes due Nov. 1, 2015 and for other general corporate purposes.

The maker of electronic components and enterprise computing solutions is based in Melville, N.Y.

Coach offering

Coach priced $600 million of 4.25% senior notes (Baa2/BBB-/BBB) due 2025 on Monday at Treasuries plus 225 bps, according to a market source.

Pricing was at 99.445 to yield 4.318%.

The notes sold at the tight end of the 237.5 bps area talk, which had tightened from guidance in the 250 bps area.

The issue was upsized from $400 million.

JPMorgan, BofA Merrill Lynch and HSBC Securities (USA) LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Coach is a New York-based luxury leather goods company.

Harley-Davidson new issue

Harley-Davidson Financial priced an upsized $600 million of 2.15% five-year notes at 65 bps over Treasuries on Monday, an informed source said.

The notes (A3/A-/) priced at the tight end of talk set in the 65 bps to 68 bps area.

The bookrunners were Citigroup Global Markets Inc., RBS Securities and U.S. Bancorp Investments Inc.

Proceeds will be used for general corporate purposes.

The financing arm of motorcycle maker Harley-Davidson Motor Co. is based in Milwaukee.

ComEd upsizes

Commonwealth Edison priced an upsized $400 million issue of 3.7% 30-year first mortgage bonds, series 118, (A2/A-/A-) on Monday at par, or Treasuries plus 103 bps, according to a market source and an FWP filing with the SEC.

The notes priced at the tight end of talk.

BNP Paribas Securities Corp., RBS Securities, U.S. Bancorp Investments, Credit Agricole Securities (USA) Inc. and SMBC Nikko Securities America were the joint bookrunners.

The company intends to use $260 million of the proceeds to refinance its 4.7% first mortgage bonds, series 101, due April 15, 2015. It plans to use the remainder to repay a portion of its outstanding commercial paper obligations and for general corporate purposes.

ComEd is an electricity provider based in Chicago. It is a subsidiary of Exelon Corp.

JPMorgan eases

JPMorgan Chase’s 3.125% notes due 2025 traded 2 bps softer at 118 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the 10-year notes (A3/A/A+) on Jan. 16 at 145 bps over Treasuries.

The financial services company is based in New York City.

Goldman soft

Goldman Sachs’ 3.5% notes due 2025 eased 3 bps in the secondary market to 129 bps offered, a market source said.

Goldman sold $1.7 billion of the notes (Baa1/A-/A) on Jan. 20 at a spread of 170 bps plus Treasuries.

The financial services company is based in New York City.

Bank of America weaker

Bank of America’s 4% notes due 2025 widened 5 bps in secondary trading to 187 bps bid, a market source said.

The issue (Baa3/BBB+/) priced on Jan. 16 in a $2.5 billion offering at Treasuries plus 225 bps.

The financial services company is based in Charlotte, N.C.

Wells Fargo slips

Wells Fargo’s 2.15% notes due 2020 widened to 72 bps offered on Monday from 65 bps offered in Friday’s session, a market source said.

Wells Fargo sold $2 billion of the notes (A2/A+/AA-) on Jan. 26 at Treasuries plus 85 bps.

The bank is based in San Francisco.

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