British Telecom, BNY Mellon, BB&T, Avery Dennison, Aon price; CVS, Dollar Tree mixed

By Cristal Cody

Tupelo, Miss., Nov. 29 – Thursday’s trading session hosted several high-grade deals, including dollar-denominated bond issuance from seldom-seen issuers.

British Telecommunications plc priced $1.38 billion of senior notes in two parts.

Bank of New York Mellon sold $1 billion of two-year senior floating-rate notes.

BB&T Corp. priced $1 billion of five-year senior medium-term notes.

Avery Dennison Corp. priced an upsized $500 million of 10-year senior notes in its first offering in the dollar-denominated market since April 3, 2013.

Niagara Mohawk Power Corp. also brought $500 million of 10-year senior notes to the primary market on Thursday.

Aon Corp. sold $350 million of 10-year guaranteed senior notes.

More than $30 billion of high-grade notes have priced week to date, higher than market forecasts of about $10 billion to $20 billion of issuance.

For the week ended Nov. 28, Lipper US Fund Flows reported outflows of $1.69 billion for corporate investment-grade funds, down from inflows of $287 million in the previous week and $755 million in the prior week.

The Markit CDX North American Investment Grade 31 index tightened another basis point after firming 4 bps in the previous session to end the day at a spread of 74 bps.

CVS Health Corp.’s senior notes (Baa2/BBB+) were mixed in secondary trading after the bonds were downgraded a notch on Wednesday by Moody’s Investors Service. Moody’s dropped the ratings based on factors including that CVS Health’s $69 billion cash and stock acquisition of Aetna, Inc. is being financed with a large amount of debt.

Dollar Tree Inc.’s senior notes (Baa3/BBB-) traded mostly weaker on Thursday after the company missed third-quarter revenue expectations and lowered its guidance for fiscal 2018.

In other trading, Pacific Gas & Electric Co.’s senior notes ended flat to better after softening earlier in the month when the company’s power lines were linked to the deadly Camp Fire in California and its bonds downgraded.

British Telecom in primary

British Telecommunications priced $1,375,000,000 of senior notes (Baa2/BBB) in two tranches on Thursday, according to a market source.

The $675 million of 4.5% five-year notes came at a spread of 165 bps over Treasuries.

Price guidance was at the Treasuries plus 170 bps area, plus or minus 5 bps.

British Telecommunications sold $700 million of 5.125% 10-year notes at a Treasuries plus 215 bps spread.

The notes were talked to price in the Treasuries plus 220 bps area, plus or minus 5 bps.

BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., MUFG, SMBC Nikko Securities America Inc., BNP Paribas Securities Corp., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Lloyds Securities Inc., Mizuho Securities USA Inc., NatWest Markets Securities Inc., Santander Investment Securities Inc., SEB and SG Americas Securities LLC were the bookrunners.

British Telecommunications is a London-based internet and phone services company.

BNY Mellon prices

Bank of New York Mellon (Aa2/AA-/AA) sold $1 billion of two-year senior floating-rate notes with a coupon of Libor plus 30 bps, according to a market source.

The notes were initially talked to price in the Libor plus 40 bps area.

BofA Merrill Lynch, BNY Mellon Capital Markets LLC, Citigroup, Goldman Sachs & Co. LLC, Mizuho Securities and UBS Securities LLC were the bookrunners.

Bank of New York Mellon is a financial products and services company based in New York.

BB&T raises $1 billion

BB&T priced $1 billion of 3.75% five-year senior medium-term notes (A2/A-/A+) at 99.846 and a spread of Treasuries plus 93 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes were initially talked to print at the Treasuries plus 100 bps area with guidance later tightened to the Treasuries plus 95 bps area, plus or minus 2 bps.

Goldman Sachs and Morgan Stanley & Co. LLC were the bookrunners.

The bank and financial services company is based in Winston-Salem, N.C.

Niagara Mohawk prints

Niagara Mohawk Power sold $500 million of 4.278% 10-year senior notes (A2/A-) on top of guidance on Thursday at a spread of Treasuries plus 125 bps, according to a market source.

JPMorgan, NatWest Markets, SMBC Nikko and TD Securities (USA) LLC were the bookrunners.

The New York electric utility company is a subsidiary of National Grid plc.

Avery Dennison sells notes

Avery Dennison priced an upsized $500 million of 4.875% 10-year senior notes (Baa2/BBB) at a spread of 190 bps over Treasuries, according to a market source and an FWP filing.

Pricing was at 99.5 to yield 4.939%.

The deal was upsized from $400 million.

Initial price talk on the notes was in the Treasuries plus 190 bps to 195 bps area.

BofA Merrill Lynch, JPMorgan, HSBC Securities and Citigroup were the bookrunners.

Avery Dennison is a Pasadena, Calif.-based maker of pressure-sensitive materials, retail branding and information products and organization and identification products

Aon brings $350 million

Aon sold $350 million of 4.5% 10-year guaranteed senior notes (Baa2/A-/BBB+) at a spread of 150 bps over Treasuries, or 99.735 to yield 4.533%, according to a market source and an FWP filing.

Price guidance was in the Treasuries plus 155 bps area, plus or minus 5 bps. The notes were initially talked at the Treasuries plus 165 bps area.

Bookrunners were JPMorgan, Morgan Stanley and HSBC Securities.

The notes are guaranteed by Aon plc.

Aon is a London-based provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services.

CVS notes mixed

CVS Health’s 4.3% senior notes due March 25, 2028 firmed about 2 bps to 156 bps bid on Thursday after closing the previous day flat, according to a market source.

The notes priced in a $9 billion offering on March 6 at a spread of Treasuries plus 160 bps.

The company’s 5.05% notes due March 25, 2048 eased 2 bps to 192 bps bid after softening about 4 bps on Wednesday.

CVS Health sold $8 billion of the notes in the March offering at a Treasuries plus 195 bps spread.

The retail pharmacy chain and pharmacy benefits manager is based in Woonsocket, R.I.

PG&E improves

Pacific Gas & Electric’s 4.25% notes due Aug. 6, 2023 edged up to 92 bid on Thursday from the 91.623 bid area, a market source said.

The notes have improved since the issue dropped to the 89 area from 99.51 on Nov. 15.

Pacific Gas & Electric (Baa2/BBB-/BBB-) sold $500 million of the notes on Aug. 2 at 99.76 to yield 4.3% and a spread of 145 bps over Treasuries.

The company’s 4.65% notes due Aug. 6, 2028 were flat at 89.75 bid.

The notes sank to the 84 area on Nov. 14 from where the issue traded in the 98.49 area earlier in the month.

In the Aug. 2 offering, $300 million of the 10-year notes were sold 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.

Dollar Tree softens

Dollar Tree’s 4% notes due May 15, 2025 eased 2 bps on Thursday to 190 bps bid after widening 10 bps in the previous session, a market source said.

The notes priced on April 5 in a $1 billion offering at 99.899 to yield 4.016%, or a Treasuries plus 125 bps spread.

Dollar Tree’s 4.2% notes due May 15, 2028 firmed 2 bps to 204 bps bid during the session. The notes eased 6 bps in secondary trading on Wednesday.

The company sold $1.25 billion of the 10-year notes in the April offering at 99.736 to yield 4.232% and a spread of 140 bps over Treasuries.

Dollar Tree is a Chesapeake, Va.-based discount retailer.

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