Colgate-Palmolive, Safeway offer bonds; week ahead seen busy; new deals improve in trading

By Andrea Heisinger

New York, July 31 - Two new bonds from industrial issuers Colgate-Palmolive Co. and Safeway Inc. priced Friday to end the week the same as it began.

There were also two industrial issues sold Monday, with mostly financial deals done in the days between.

Both of Friday's offerings improved in trading, although Safeway outperformed due to the already low pricing of Colgate.

Spreads were considerably wider by late afternoon as Treasury yields tightened, a source said. The 10-year note was in 13 basis points from the previous day, to yield 3.48%, while the five-year note was 10 bps better to yield 2.52%.

Colgate-Palmolive sells bonds

Colgate-Palmolive sold $300 million of 3.15% six-year senior notes at Treasuries plus 67 bps by early afternoon, a source said.

The bonds had such a low spread and coupon for a variety of reasons, a source said. These included being AA rated and being a "clean industrial," and also had to do with the $300 million deal size that was set and did not grow.

On the secondary side "everyone wanted it," a trader said. "To tell you the truth, + 67 [bps] was cheap."

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

The household, health care and personal products company is based in New York City and plans to use proceeds for general corporate purposes.

Safeway offers 10 year

Food and drug retailer Safeway sold $500 million of 5% 10-year senior unsecured notes at Treasuries plus 158 bps.

Bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc. and Deutsche Bank Securities Inc.

Proceeds are being used to repay borrowings under a commercial paper program. Any remainder will be used to repay $500 million in 7.5% notes due Sept. 15. Proceeds may also be temporarily invested in short-term borrowings.

The company is based in Pleasanton, Calif.

Coming week seen busy

The upcoming week, or at least the top part of it, is expected to have an increase in issuance volume, a market source said Friday, echoing what another said earlier in the week.

"We have a couple of things coming, but nothing set," the market source said. "I can't even tell you if they'll be mostly financial or industrial."

A source predicted earlier in the week that, although August was expected to be slow, the coming week would be busy as more companies try to get deals done in a new quarter.

"I would think we should be busier [than this week]," a source said. "I hope so, anyway. We can't see much less."

Petrotrin plans roadshow, sale

The Petroleum Co. of Trinidad and Tobago is planning a dollar-denominated benchmark 10-year senior note issue, it announced Friday. It will be sold via Rule 144A and Regulation S.

A roadshow begins Aug. 5 and ends Aug. 10.

Proceeds are going to fund capital requirements.

The government-run oil firm is based in Pointe-a-Pierre, Trinidad.

Colgate bond improves

The new 3.15% bond due 2015 from Colgate-Palmolive was about 5 bps better once it hit the secondary market, a trader said.

The bond priced at 67 bps over Treasuries and was at 63 bps bid, 58 bps offered, he said.

Safeway 10 year trades in

The new 5% bond due 2019 from Safeway was 10 to 20 bps better than where it priced by mid-afternoon Friday, a trader said.

It priced at 158 bps over Treasuries and was quoted at 142 bps bid, 139 bps offered.

Dow Chemical leads trading

A 10-year bond from Dow Chemical Co. sat at the top of high-grade trading early Friday afternoon, a trader said.

The company's 8.55% bond due 2019 was popular with investors, as it was the previous day when a trader said it had more than $50 million in trades after the company released favorable second-quarter earnings. The earnings beat analysts' expectations.

The bond was about 40 bps better than its pricing level, a trader said Thursday.

A new bond from Nexen Inc. was also trading heavily. The company's 7.5% due 2039 was in the top five trades by early afternoon and was nearly 30 bps better than its price of 290 bps over Treasuries on Monday.

Capital One bond gains

A 5.5% bond due 2015 from Capital One Financial was one of the biggest movers by late Friday, a source said. The bond tightened more than 45 bps from the previous week.

Other bonds, including those from General Electric Capital Corp., Tyco International and MetLife Inc. also improved about 45 bps from a week ago when many companies were releasing second-quarter earnings.

A handful of bonds were not as lucky, such as a 5.75% due 2014 from Genworth Financial that was more than 60 bps worse than a week ago. The insurance and financial management company announced a $50 million loss for the second quarter on Friday.

A 6.625% bond due 2035 from Mexico's Pemex Project Funding Master Trust was more than 70 bps wider than a week ago. The petroleum company reported lower earnings for the quarter.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.