Daimler Finance, CSX price multi-tranche deals; PECO in primary; new energy bonds firm

By Cristal Cody

Tupelo, Miss., Feb. 15 – Investment-grade supply picked up on Thursday with three reported issuers during the session.

Daimler Finance North America LLC came with $2.25 billion of senior notes in four tranches.

CSX Corp. priced a $2 billion three-part offering of fixed-rate notes.

PECO Energy Co. sold $325 million of 30-year first and refunding mortgage bonds.

Peco Energy is the second Exelon Corp. subsidiary to price over the week.

Commonwealth Edison Co.’s $800 million of 4% first mortgage bonds due March 1, 2048 (A2/A-/A) priced on Monday traded 2 basis points better on Thursday at 83 bps bid, a source said.

Commonwealth Edison, a unit of Chicago-based energy provider Exelon, priced the series 124 first mortgage bonds with a spread of 85 bps over Treasuries.

Peco Energy’s new 3.9% first and refunding mortgage bonds due March 1, 2048 were trading 1 bp tighter than issuance in the secondary market, a source said.

High-grade credit and bond spreads mostly tightened over the session, sources reported.

The Markit CDX North American Investment Grade 29 index firmed more than 3 bps to a spread of 54 bps.

Daimler prices $2.25 billion

Daimler Finance North America priced a $2.25 billion four-tranche offering of senior notes (A2/A/) in the Rule 144A and Regulation S deal on Thursday, according to a market source.

The company sold $400 million of three-year floating-rate notes at Libor plus 45 bps.

Daimler placed $550 million of 3% three-year fixed-rate notes at a spread of Treasuries plus 65 bps.

In the five-year tranche, the company priced $675 million of 3.35% notes at a spread of Treasuries plus 75 bps.

Daimler also sold $625 million of 83.75% 10-year notes at a spread of 85 bps over Treasuries.

BBVA Securities Inc., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities, LLC, Mizuho Securities USA LLC and Societe Generale were the bookrunners.

Daimler Finance is a Wilmington, Del.-based financing arm of Daimler North America Corp.

CSX raises $2 billion

CSX priced $2 billion of fixed-rate notes (Baa1/BBB+/) in three tranches on the tight side of guidance, according to a market source and a FWP filing with the Securities and Exchange Commission.

The company sold $800 million of 3.8% 10-year notes at 99.933 to yield 3.808%. The notes priced with a spread of Treasuries plus 90 bps, compared to talk in the Treasuries plus 95 bps area.

CSX priced $850 million of 4.3% 30-year notes at 99.664 to yield 4.32% and a spread of 115 bps over Treasuries. The bonds were talked to price in the Treasuries plus 120 bps area.

The company sold $350 million of 4.65% 50-year notes at 99.613 to yield 4.67%. The bonds priced with a 150 bps spread plus Treasuries. Guidance on the bonds was in the Treasuries plus 155 bps area.

Citigroup Global Markets, J.P. Morgan Securities, Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The transportation company is based in Jacksonville, Fla.

PECO sells bonds

PECO Energy sold $325 million of 3.9% 30-year first and refunding mortgage bonds on Thursday at a spread of 77 bps over Treasuries, on the tight side of talk, according to a market source and an FWP filing with the SEC.

The bonds (Aa3/A-/A) priced at 99.508 to yield 3.928%.

The bookrunners were Mizuho Securities, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC and PNC Capital Markets LLC.

Proceeds will be used with cash balances to refinance some of the company’s $500 million of 5.35% first and refunding mortgage bonds due March 1, 2018 at maturity.

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

Funds lose $790 million

Investment-grade corporate bond mutual funds were in negative territory this week, posting a net outflow of $790 million during the week ended Wednesday, according to sources familiar with the fund-flow statistics generated by AMG Data Services Inc., an Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

This week’s loss not only snapped a winning streak which had seen those funds post gains during the first six weeks of this year but broke a run of gains over the last 21 consecutive weeks, following a rare two straight weekly losses back in September, according to a Prospect News analysis of the data.

The Lipper calculations indicated that last week the funds had a net inflow of $4.73 billion for the seven-day period ended Feb. 7 and before that, $2.2 billion for the Jan. 31 week.

Last week’s inflow was the biggest so far this year and was one of the largest weekly inflows ever recorded for those IG funds.

This week s outflow drops the year-to-date net inflow figure for the IG corporates to $18.09 billion from $18.88 billion last week, which had been their sixth consecutive new peak cumulative inflow level for the year, up from the previous week’s $14.75 billion.

Last year ended with a $117.35 billion net inflow total for the year, the 14th consecutive new 2017 cumulative peak level, the analysis indicated.

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