Texas Instruments, Manitoba price; Home Capital volatility wanes; AT&T, Verizon firm

By Cristal Cody

Tupelo, Miss., April 27 – Several issuers tapped the investment-grade bond market on Thursday.

The Province of Manitoba brought $1 billion of five-year dollar-denominated global debentures to the primary market on Thursday.

Also in the primary, Texas Instruments Inc. priced a $600 million two-part offering of senior notes.

E.I. DuPont de Nemours & Co. and PepsiCo, Inc. also marketed notes. Final pricing details were not available at press time.

In addition to the dollar offering, PepsiCo announced it was considering a sale of senior notes denominated in Canadian dollars, according to a 424B2 filed with the Securities and Exchange Commission.

The issuer stayed out of the Canadian primary market on Thursday, a source said.

Friday is “still a good day if the market holds, so there’s no reason we couldn’t get a deal tomorrow,” the source said. “There’s nothing today. We had all the activity and secondary volatility around the Home Capital bond, but that seems to be resolved.”

Home Capital Group Inc. announced on Thursday that its subsidiary, Home Trust, has secured a firm commitment for a C$2 billion credit line from what it described as a major Canadian institutional investor.

The Markit CDX North American Investment Grade index closed on Thursday less than 1 basis point softer at a spread of 64 bps.

In the secondary market, AT&T Inc.’s 4.25% notes due March 1, 2027 firmed about 1 bp.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 traded about 1 bp better.

PepsiCo’s existing notes softened about 1 bp to 2 bps in the secondary market, a source said.

Great Plains Energy Inc.’s notes (Baa3/BBB/) priced in March were mixed in the wake of regulators’ rejection of the company’s $12.2 billion acquisition of Westar Energy Inc.

Kansas regulators on April 19 turned down the deal for a combined utility of Kansas City, Mo.-based Great Plains Energy and Topeka-based Westar Energy. The deal also requires approval from Missouri and federal regulators.

Great Plains Energy’s notes sold in March carry mandatory and special calls of 101 if the merger does not close or is delayed.

Manitoba prices $1 billion

In the day’s biggest deal, Manitoba (Aa2/AA-/) sold $1 billion of 2.125% five-year dollar-denominated global debentures on Thursday at 99.698 to yield 2.189%, according to an FWP filing with the Securities and Exchange Commission.

The series GT debentures priced at mid-swaps plus 26 bps, or a spread of Treasuries plus 37.6 bps.

HSBC Bank plc, National Bank of Canada Financial Inc., RBC Capital Markets, LLC and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds will be used for general government programs and for advances to the Manitoba Hydro-Electric Board.

Texas Instruments sells notes

Texas Instruments priced $600 million of senior notes (A1/A+/-) in two tranches, including an add-on, according to an FWP filing with the SEC.

The company sold $300 million in a reopening of its 2.75% senior notes due March 12, 2021 at 102.279 to yield 2.118%, or a spread of Treasuries plus 30 bps.

Texas Instruments sold the original $250 million of 2.75% notes on March 5, 2014 at 99.294 to yield 2.862% and a spread of 70 bps over Treasuries. The total outstanding now is $550 million.

In the new tranche, Texas Instruments priced $300 million of 2.625% seven-year notes at 99.231 to yield 2.746%. The notes priced with a spread of 65 bps over Treasuries.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, MUFG, Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC and Mizuho Securities USA Inc. were the bookrunners.

Proceeds will be used for general corporate purposes.

Texas Instruments is a Dallas-based semiconductor designer and manufacturer.

AT&T firms

AT&T’s 4.25% notes due March 1, 2027 improved about 1 bp to 168 bps bid in secondary trading on Thursday, according to a market source.

The company sold $2 billion of the notes (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon improves

Verizon Communications’ 4.125% notes due March 16, 2027 tightened about 1 bp on the day to 154 bps bid, a market source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

Great Plains mixed

Great Plains Energy’s 3.9% notes due April 1, 2027 closed a nickel lower at 101.30 on Thursday, a market source said.

The notes remain down from a high of 104.18 seen on Friday.

Great Plains sold $1.4 billion of the 10-year notes on March 6 at 99.87 to yield 4.858% and a spread of Treasuries plus 145 bps.

The company’s 4.85% bonds due April 1, 2047 headed out at 101.68, better than where the notes traded on Wednesday at 101.47.

The notes dropped from 104.05 on April 19 to 101.60 on April 20.

The company sold $1 billion of the 30-year bonds in the March offering at 99.87 to yield 4.858%, or a spread of Treasuries plus 175 bps.

Kansas City, Mo.-based Great Plains is the holding company of Kansas City Power & Light Co. and KCP&L Greater Missouri Operations Co.

Home Capital gets credit line

Home Capital Group Inc. announced on Thursday that its subsidiary, Home Trust, has secured a firm commitment for a C$2 billion credit line from what it described as a major Canadian institutional investor. The company also announced it has retained RBC Capital Markets, LLC and BMO Capital Markets Corp. to advise on further financing and strategic options.

The C$2 billion loan facility is secured against a portfolio of mortgages originated by Home Trust.

Home Trust has agreed to pay a commitment fee of C$100 million and will make an initial draw of C$1 billion. The interest rate on outstanding balances is 10% and the standby fee on undrawn funds is 2.5%. The facility matures in 364 days, at the option of Home Trust.

The facility, combined with Home Trust’s current available liquidity, provides the company with access to about C$3.5 billion in total funding.

Home Trust had liquid assets of C$1.3 billion as of Tuesday, plus an additional portfolio of available for sale securities totaling about C$200 million.

“Access to these funds is intended to mitigate the impact of a decline in Home Trust’s HISA [high interest savings account] deposit balances that has occurred over the past four weeks and that has accelerated since April 20,” Home Trust said in the release. “The company will work closely with the lender to have the funds available as soon as possible.”

Home Trust also faces charges by the Ontario Securities Commission over allegedly breaking securities laws.

The Canadian mortgage and credit lender is based in Toronto.

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