Pfizer, Morgan Stanley, Duke Energy Carolinas, American Water sell bonds; credit spreads ease

By Cristal Cody

Eureka Springs, Ark., Nov. 14 – More than $10 billion of investment-grade bonds priced on Monday as issuance continues to ramp up following the U.S. presidential election.

Pfizer Inc. priced $6 billion of bonds in five tranches during the session.

Morgan Stanley priced $3.25 billion of five-year senior notes.

Duke Energy Carolinas LLC brought $600 million of 10-year first and refunding mortgage bonds on Monday.

American Water Capital Corp. sold $550 million of senior notes in two tranches.

Also, details emerged on new issuance from JPMorgan Chase & Co. and Goldman Sachs Group Inc.

High-grade credit spreads softened and Treasuries continued the sell-off begun after Donald Trump won the presidential election.

The Markit CDX North American Investment Grade index eased 2 basis points to a spread of 77 bps.

The 10-year Treasury note yield rose to 2.26% on Monday from 2.13% on Thursday. The bond markets were closed on Friday for the Veterans Day holiday.

In the secondary market, Consolidated Edison Co. of New York, Inc.’s debentures (A2/A-/A-) were quoted about 1 bp to 3 bps better than issuance.

Pfizer brings $6 billion

Pfizer sold $6 billion of fixed-rate notes (A1/AA/A+) in five tranches, according to a market source on Monday.

Pfizer priced $1 billion of 1.7% three-year notes with a spread of 45 bps over Treasuries.

The company sold $1 billion of 2.2% five-year notes at a 55 bps plus Treasuries spread.

The $1.75 billion tranche of 3% 10-year notes priced with a spread of 85 bps over Treasuries.

Pfizer also priced $1 billion of 4% 20-year notes at a 100 bps spread plus Treasuries.

In the final tranche, the company sold $1.25 billion of 4.125% 30-year notes with a spread of 110 bps over Treasuries.

All of the tranches priced on the tight side of guidance.

BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC were the bookrunners.

Proceeds will be used for a tender offer to purchase for cash any and all of the company’s $3.25 billion of 6.2% senior notes due March 15, 2019 and for general corporate purposes, according to a 424B3 filing with the Securities and Exchange Commission.

The biopharmaceutical company is based in Foster City, Calif.

Morgan Stanley prices

Morgan Stanley sold $3.25 billion of 2.625% five-year senior notes (A3/BBB+/A) at 99.489 and a spread of 110 bps over Treasuries on Monday, according to a market source and an FWP filing with the SEC.

The series F global medium-term notes are due Nov. 17, 2021.

Morgan Stanley & Co. LLC was the bookrunner.

The financial services company is based in New York City.

Duke Energy Carolinas prints

Duke Energy Carolinas priced $600 million of 2.95% 10-year first and refunding mortgage bonds on Monday with a spread of 75 bps over Treasuries, according to an FWP filing with the SEC.

The bonds due Dec. 1, 2026 (Aa2/A/AA-) priced at 99.758 to yield 2.978%.

The bookrunners were BNP Paribas Securities Corp., Goldman Sachs & Co., Mizuho Securities USA Inc. and RBC.

Proceeds will be used to repay at maturity $350 million of 1.75% first and refunding mortgage bonds due Dec. 15, 2016 and for capital expenditures, ongoing construction, capital maintenance and general company purposes.

The Charlotte, N.C.-based subsidiary of Duke Energy Corp. generates, transmits, distributes and sells electricity.

American Water Capital prices

American Water Capital priced $550 million of senior notes (A3/A/) in two tranches on Monday, according to an FWP filing with the SEC.

The company sold $250 million of 3% 10-year notes at 99.818 to yield 3.021% and a spread of 80 bps plus Treasuries.

American Water priced $300 million of 4% 30-year notes at 99.168 to yield 4.048%, or Treasuries plus 105 bps.

The bookrunners were BofA Merrill Lynch, Mizuho, RBC, TD Securities (USA) LLC and Regions Securities LLC.

Proceeds will be used to repay commercial paper and for general corporate purposes.

The investor-owned water and wastewater utility is based in Voorhees, N.J.

JPMorgan sells $1.1 billion

JPMorgan Chase priced $1.1 billion of 3.625% 11-year subordinated notes at 99.827 to yield 3.644% and a spread of Treasuries plus 152 bps, according to a market source and an FWP filing with the SEC.

The notes due Dec. 1, 2027 priced on the tight side of guidance.

J.P. Morgan Securities LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in New York City.

Goldman prices $2.75 billion

Goldman Sachs Group sold $2.75 billion of 3.5% 10-year notes at 99.741 and a spread of 137.5 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The notes due Nov. 16, 2026 priced on the tight side of guidance.

Goldman Sachs was the bookrunner.

Goldman Sachs is a New York-based banking, securities and investment management company.

ConEd tightens

Consolidated Edison Co. of New York’s 4.3% debentures due 2056 were quoted at 137 bps bid early Monday, according to a market source.

Consolidated Edison sold $500 million of the 40-year series debentures on Thursday at a spread of 140 bps plus Treasuries.

The electric utility is a subsidiary of New York City-based Consolidated Edison, Inc.

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