3M, Thermo Fisher, Aflac, Telus, Ventas Realty, PECO Energy price bonds; Monsanto mostly flat

By Cristal Cody

Eureka Springs, Ark., Sept. 14 – High-grade bond issuance stayed strong on Wednesday with more than $5 billion of bonds priced.

3M Co. sold $1.75 billion of senior medium-term notes in three tranches.

Thermo Fisher Scientific Inc. priced $1.2 billion of 10-year senior notes during the session.

Aflac Inc. raised $700 million in a two-part notes offering.

Telus Corp. sold $600 million of long 10-year notes.

Ares Capital Corp. priced $600 million of long five-year notes following the company’s roadshow last week.

Ventas Realty, LP brought $450 million of 10-year guaranteed senior notes to the primary market.

PECO Energy Co. priced $300 million of five-year first and refunding mortgage bonds.

Southside Bancshares, Inc. upsized its offering of 10-year fixed-to-floating subordinated notes by $25 million to $100 million.

Details also emerged on new issues from Deutsche Telekom International Finance BV, BP Capital Markets plc, Canada Pension Plan Investment Board and Bank of Nova Scotia.

Looking ahead to Thursday’s supply, Freddie Mac announced plans to price a benchmark size offering of new two-year Reference Notes.

The Markit CDX North American Investment Grade index ended unchanged to softer at a spread of 77 basis points.

Monsanto Co.’s 2.85% notes due 2025 and 3.95% bonds due 2045 were mostly unchanged on the day following the announcement it will be acquired by Bayer AG in a $66 billion cash-and-debt deal.

Royal Bank of Scotland Group plc’s $2.65 billion offering of 3.875% senior notes due 2023 priced a week ago traded 4 bps softer earlier in the day and 8 bps wider than issuance.

3M prices $1.75 billion

3M sold $1.75 billion of senior medium-term notes (A1/AA-/) in three tranches on Wednesday, according to a market source.

The company priced $600 million of 1.625% five-year notes at 43 bps over Treasuries, $650 million of 2.25% 10-year notes at 68 bps over Treasuries and $500 million of 3.125% 30-year bonds at 93 bps over Treasuries.

The notes priced on the tight side of guidance.

BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the lead managers.

Proceeds will be used for general corporate purposes, including to repay $1 billion of medium-term notes due Sept. 29.

3M is a Maplewood, Minn.-based company that produces products including Post-it notes and Scotch tape.

Thermo Fisher’s $1.2 billion

Thermo Fisher Scientific sold $1.2 billion of 2.95% 10-year senior notes with a spread of 140 bps over Treasuries on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa2/BBB/BBB) priced at 98.787 to yield 3.092%.

J.P. Morgan Securities LLC, Citigroup, Deutsche Bank Securities Inc., Barclays, BofA Merrill Lynch and U.S. Bancorp Investments, Inc. were the bookrunners.

Proceeds will be used to redeem $900 million of 1.3% senior notes due Feb. 1, 2017 and for general corporate purposes.

Thermo Fisher is a Waltham, Mass.-based science technology company.

Aflac prices $700 million

Aflac sold $700 million of 10-year and 30-year senior notes (A3/A-/A-) on Wednesday, according to an FWP filing with the SEC.

The company priced $300 million of 2.875% 10-year notes at 99.816 to yield 2.896%. The notes priced with a spread of Treasuries plus 120 bps.

Aflac priced $400 million of 4% 30-year notes at 99.235 to yield 4.044% and a spread of 160 bps over Treasuries.

The bookrunners were Goldman Sachs, Mizuho Securities USA Inc., Morgan Stanley, Wells Fargo Securities LLC, BofA Merrill Lynch, MUFG and SMBC Nikko Securities America, Inc.

Aflac plans to use the proceeds from the offering to repay in full at maturity its $650 million outstanding of 2.65% senior notes due in February and for general corporate purposes.

The Columbus, Ga.-based company provides supplemental health and life insurance.

Telus brings $600 million

Telus sold $600 million of 2.8% notes due Feb. 16, 2027 at a spread of 120 bps over Treasuries on Wednesday, according an FWP filing with the SEC.

The notes (Baa1/BBB+/BBB+) priced at 99.189 to yield 2.891%.

BofA Merrill Lynch, RBC Capital Markets Corp., Wells Fargo and TD Securities (USA) LLC were the bookrunners.

Proceeds will be used to repay about $453 million of outstanding commercial paper and for general corporate purposes.

Telus is a Vancouver, B.C.-based telecommunications company.

Ares prices $600 million

Ares Capital (/BBB/BBB) priced $600 million of 3.625% notes due Jan. 19, 2022 on Wednesday at 99.639 to yield 3.701%, according to an FWP filing with the SEC.

The notes priced with a spread of 250 bps over Treasuries.

BofA Merrill Lynch, Wells Fargo, JPMorgan, SunTrust Robison Humphrey, Inc., Barclays, Citigroup, Morgan Stanley, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Mizuho, RBC and SMBC Nikko were the bookrunners.

Ares Capital wrapped a three-day roadshow for the offering on Friday.

Proceeds from the deal will be used to repay certain outstanding debt under the company’s debt facilities.

Ares Capital is a specialty finance company based in New York City.

Ventas prices $450 million

Ventas Realty sold $450 million of 3.25% 10-year guaranteed senior notes at 99.811 to yield 3.272% on Wednesday, according to an FWP filing with the SEC.

The notes (Baa1/BBB+/BBB+) priced with a spread of 158 bps over Treasuries.

The bookrunners were Citigroup, Barclays, Credit Agricole Securities (USA) Inc. and Credit Suisse Securities (USA) LLC.

The notes are guaranteed by Ventas, Inc.

Proceeds will be used for working capital and other general corporate purposes.

The real estate investment trust for housing and health-care properties is based in Chicago.

PECO sells mortgage bonds

PECO Energy priced $300 million of 1.7% five-year first and refunding mortgage bonds at 99.972 to yield 1.706% on Wednesday, according to an FWP filing with the SEC.

The bonds (A3/A-/A) priced with a spread of 50 points over Treasuries.

The bookrunners were Morgan Stanley, Credit Agricole, SMBC Nikko and CIBC World Markets Corp.

Proceeds from the deal will be used for general corporate purposes.

The electric and natural gas transmission subsidiary of Exelon is based in Philadelphia.

Southside Banc upsizes

Southside Bancshares priced an upsized $100 million of fixed-to-floating subordinated notes due 2026 (Kroll: BBB) at par on Wednesday, according to an FWP filing with the SEC.

The notes are non-callable for the first five years. From and including Sept. 30, 2021, the coupon will reset to a floating rate of Libor plus 429.7 bps.

Sandler O’Neill + Partners LP was the bookrunner.

The deal, announced on Monday, was upsized from $75 million.

The Tyler, Texas-based bank holding company plans to use the proceeds for general corporate purposes, which may include advances to subsidiaries to finance activities.

Deutsche Telekom prices

Deutsche Telekom International Finance sold $2.75 billion of notes (Baa1/BBB+/) in four tranches on Tuesday, according to a market source.

The company priced $250 million of three-year floating-rate notes at Libor plus 45 bps, $750 million of 1.5% three-year notes at 60 bps over Treasuries, $1 billion of 1.95% five-year notes at 75 bps plus Treasuries and $750 million of 2.485% seven-year notes at 95 bps over Treasuries.

The fixed-rate tranches priced on the tight side of guidance.

Goldman Sachs, JPMorgan and RBC were the bookrunners.

Deutsche Telekom International Finance is an Amsterdam-based financing arm of Deutsche Telekom AG.

BP Capital sells $2 billion

BP Capital Markets priced $2 billion of guaranteed notes (A2/A-) in three tranches on Tuesday, according to a market source and an FWP filing with the SEC.

The company sold $250 million of five-year floating-rate notes at par with a coupon of Libor plus 87 bps.

BP Capital priced $750 million of 2.112% five-year notes at par to yield a spread of 87.5 bps over Treasuries.

The $1 billion tranche of 3.017% long 10-year notes priced at par with a spread of 130 bps plus Treasuries.

The fixed-rate notes priced on the tight side of guidance.

Barclays, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., BofA Merrill lynch, Mizuho and Morgan Stanley were the bookrunners.

The notes are guaranteed by parent company BP plc.

BP Capital Markets is a financing arm of the London-based oil and gas company.

Canada Pension prices

The Canada Pension Plan Investment Board sold $2 billion of 1.25% three-year notes with a spread of 41.4 bps over Treasuries on Tuesday, a market source said.

BofA Merrill Lynch, Deutsche Bank, Goldman Sachs and HSBC were the lead managers.

The Toronto-based investment board invests and manages the funds of the Canada Pension Plan.

Scotiabank prices $1.25 billion

Bank of Nova Scotia priced a $1.25 billion 1.875% five-year bond at 62.48 bps plus mid-swaps on Tuesday, according to a market source.

The bookrunners were Barclays, Goldman Sachs, HSBC, Scotia Capital (USA) Inc. and UBS Securities LLC.

The bank is based in Toronto.

Freddie Mac markets notes

Freddie Mac announced on Wednesday that it plans to price a benchmark size offering of new two-year Reference Notes on Thursday.

The deal is expected to settle on Friday.

Barclays, Goldman Sachs and TD Securities are the lead managers.

The government-backed mortgage buyer is based in McLean, Va.

Monsanto mostly flat

Little secondary activity was seen in Monsanto’s bonds (A3/BBB+/A-) on Wednesday, according to a market source.

The company’s 2.85% notes due 2025 last traded on Tuesday at 99.88.

Monsanto sold $300 million of the notes on April 7, 2015 at 99.594 to yield 2.897%.

Monsanto’s 3.95% bonds due 2045 traded modestly higher on the day in the 95.00 area.

The bonds priced in a $500 million tranche in the 2015 offering at 99.703 to yield 3.967%.

Monsanto is a St. Louis-based agricultural products company.

RBS widens

Royal Bank of Scotland Group’s 3.875% senior notes due 2023 softened 4 bps to 258 bps bid in the secondary market, a source said early in the session.

The company sold $2.65 billion of the notes (Ba1/BBB-/BBB+) on Sept. 7 at a spread of 250 bps over Treasuries.

RBS is a banking and financial services company based in Edinburgh.

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