Takeda sells $5.5 billion; Wisconsin Public Service, GATX price; PG&E, DowDuPont stable

By Cristal Cody

Tupelo, Miss., Nov. 19 – Takeda Pharmaceutical Co., Ltd. priced $5.5 billion of senior notes in four tranches in the high-grade primary market on Monday.

Proceeds from the deal will be used to help fund the company’s acquisition of Irish drug maker Shire plc.

Also on Monday, Wisconsin Public Service Corp. sold $400 million of three-year senior notes.

GATX Corp. returned to the primary market to price a $100 million reopening of three-year floating-rate notes.

The company was in the market on Nov. 1 with a $300 million offering of 4.35% senior notes due Feb. 15, 2024.

Syndicate sources forecast about $5 billion to $10 billion of investment-grade volume this week.

The bulk of the week’s supply is expected over the first two sessions due to the Thanksgiving Day holiday. The bond markets will close on Thursday and will close at 2 p.m. ET on Friday for the Thanksgiving Day holiday.

The Markit CDX North American Investment Grade 31 index eased about 1 basis point on Monday to a spread of 76 bps.

In the secondary market, Pacific Gas & Electric Co.’s senior notes were mostly unchanged in light trading activity on Monday after softening in the previous week, sources said.

The company’s notes were downgraded last week by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings based on exposure to liabilities from the California wildfires.

DowDuPont Inc.’s notes that priced as part of its $12.7 billion eight-part offering of senior notes on Wednesday were mostly unchanged on the day.

Takeda sells four tranches

Takeda Pharmaceutical (A2/A-) priced $5.5 billion of senior notes in four tranches in a Rule 144A and Regulation S offering on Monday, according to a market source.

The company sold $1 billion of 3.8% two-year notes at a spread of Treasuries plus 105 bps.

A $1.25 billion tranche of 4% three-year notes priced with a spread of 120 bps over Treasuries.

Takeda placed $1.5 billion of 4.4% five-year notes with a Treasuries plus 155 bps spread.

The final tranche of $1.75 billion of 5% 10-year notes priced at a spread of 200 bps over Treasuries.

The two-, three- and five-year notes priced on the tight side of guidance, while the 10-year tranche priced on top of talk.

Tranches of two-year and three-year floating-rate notes were dropped from the final offering.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC and SMBC Nikko Securities America, Inc. were the bookrunners.

In addition, HSBC Bank plc was a bookrunner on the two-year notes, BNP Paribas Securities Corp. was a bookrunner on the three- and 10-year notes and Barclays joined on the five-year tranche.

On Thursday, as previously reported, Takeda Pharmaceutical also priced €7.5 billion of Rule 144A and Regulation S senior notes.

The pharmaceutical company is based in Osaka, Japan.

Wisconsin utility prices

Wisconsin Public Service sold $400 million of 3.35% three-year senior notes on Monday at a spread of 55 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes (A2/A-/A+) priced at 99.935 to yield 3.373%.

Morgan Stanley, MUFG and RBC Capital Markets, LLC were the bookrunners.

The subsidiary of Integrys Energy Group, Inc. is based in Green Bay, Wis.

GATX brings add-on

GATX priced a $100 million add-on to its floating-rate senior notes due Nov. 5, 2021 (Baa2/BBB) at 99.51 during the session, according to an FWP filing with the SEC.

The notes have a coupon of Libor plus 72 bps.

Citigroup Global Markets Inc. and BofA Merrill Lynch were the bookrunners.

GATX originally sold $200 million of the notes on Nov. 2, 2017 at par to yield Libor plus 72 bps. The total outstanding is now $300 million.

GATX is a transportation leasing company based in Chicago.

PG&E mixed

Pacific Gas & Electric’s 4.25% notes due Aug. 6, 2023 headed out at 93.5 in light trading on Monday, a market source said.

The notes were quoted on Friday at 94.25 after softening to 89 in the previous session.

The company (Baa2/BBB-/BBB-) sold $500 million of the five-year notes on Aug. 2 at 99.76 to yield 4.3% and a spread of 145 bps over Treasuries.

Pacific Gas & Electric’s 4.65% notes due Aug. 6, 2028 were unchanged from Friday at 91 bid.

The issue had dropped more than 5 points to 84 on Wednesday before recovering to the 90 area on Thursday.

Pacific Gas priced $300 million of the 10-year notes in the August offering at 99.72 to yield 4.69% and a Treasuries plus 170 bps spread.

The electric and natural gas utility is based in San Francisco.

DowDuPont flat

DowDuPont’s 4.725% notes due Nov. 15, 2028 were flat on the day at 160 bps bid, a market source said.

The company sold $2.25 billion of the 10-year notes on Wednesday at a spread of 160 bps over Treasuries.

Wilmington, Del.-based DowDuPont is expected to become a stand-alone company focused on specialty products following the spinoffs of its agriculture and materials science businesses in 2019.

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