Kroger gets $1 billion; H&R prices C$150 million; RBC sells $100 million

By Devika Patel

Knoxville, Tenn., Jan. 17 – The investment-grade bond market on Tuesday opened with Toronto-based trust H&R Real Estate Investment Trust announcing it sold C$150 million of 2.5-year floating-rate senior debentures at par to yield 123 basis points over CDOR in a private placement in Canada and Toronto-based financial services company Royal Bank of Canada selling $100 million more of its two-year senior floating-rate notes at par to yield Libor plus 45 basis points on Tuesday, lifting the size of the issue to $1 billion.

Also, Calgary, Alta.’s Pembina Pipeline Corp. said it will sell C$600 million in two tranches of senior unsecured medium-term notes, and Cincinnati-based grocery retailer Kroger Co. priced $1 billion of 4.45% 30-year senior notes (Baa1/BBB/BBB) at 99.867 to yield 4.458%, or 150 basis points over Treasuries.

Kroger

The Kroger notes feature a make-whole call at Treasuries plus 25 bps until Aug. 1, 2046 and then are callable at par.

BofA Merrill Lynch, RBC Capital Markets Corp., U.S. Bancorp Investments Inc., Citigroup Global Markets Inc., Mizuho Securities USA Inc. and MUFG are the bookrunners.

Proceeds will be used to reduce the company’s outstanding commercial paper and for general corporate purposes.

H&R

It is a condition of closing to the H&R offering that the debentures be rated at least BBB (high) with a stable trend by DBRS.

TD Securities, Scotia Capital, BMO Capital Markets and CIBC World Markets were the bookrunners.

Proceeds will be used to repay debt and for general trust purposes.

RBC

RBC Capital Markets Corp. is the bookrunner for the floaters.

RBC originally sold $850 million of the notes at par on Jan. 12 and another $50 million at the same price on Jan. 13.

Pembina

In the first tranche, Pembina priced C$300 million of 2.99% series 8 notes due 2024.

The notes priced at a spread of 225 basis points over the interpolated Government of Canada bond curve.

Pembina Pipeline sold C$300 million of 4.74% series 9 notes due 2047.

The transportation and midstream service provider for the energy industry plans to use the proceeds from the deal to repay short-term debt under the company’s credit facilities, for Pembina's capital program and other general corporate purposes.

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