Carlyle prices; primary busiest since 2016; Cigna, Pfizer notes mixed; Nordea, Eni firm

By Cristal Cody

Tupelo, Miss., Sept. 7 – High-grade pricing activity continued on Friday from Carlyle Finance LLC with an upsized $350 million offering of 30-year senior notes.

Carlyle held fixed-income investor calls on Wednesday and Thursday for the deal.

The first week of September closed as the busiest week of primary action in more than two years, but new issues were being digested with market tone remaining strong, sources said.

Investment-grade issuers priced more than $56 billion of bonds over the holiday-shortened week.

The volume, lifted by Cigna Corp.’s $20 billion 10-part offering of senior notes on Thursday, made the week the busiest since January 2016, BofA Merrill Lynch analysts said in a note released Friday.

In addition to Cigna’s deal, other major offerings over the week included Pfizer Inc.’s $5 billion six-tranche sale of senior notes on Tuesday and HSBC Holdings plc’s $5.25 billion of senior notes priced in three tranches on Wednesday.

About $45 billion to $55 billion of issuance for the start of September had been expected by market sources.

$25 billion-plus forecast

Looking ahead to the upcoming week, about $25 billion to $30 billion of volume is forecast by syndicate sources.

Beginning Monday, Mitsubishi UFJ Lease and Finance Co. Ltd. will hold a deal roadshow for a $500 million Rule 144A- and Regulation S- eligible offering of five-year senior notes, according to a market source.

In the secondary market, new issues priced this week were mixed, sources said.

Cigna’s bonds (Baa1/A-/BBB), issued through Halfmoon Parent Inc., traded about 1 basis point to 2 bps softer to as much as 5 bps tighter.

Pfizer’s notes (A1/AA/A+) were mostly flat to about 4 bps better than issuance across six tranches.

A $500 million offering of 4.625% fixed-to-floating-rate notes due Sept. 13, 2033 (Baa1/A-/A+) that Nordea Bank AB priced on Thursday traded 3 bps better in aftermarket trading and headed out on Friday about 6 bps tighter at 169 bps bid, 166 bps offered, according to market sources. Nordea Bank priced the notes at a spread of Treasuries plus 175 bps.

Eni SpA’s $2 billion of senior notes priced in a Rule 144A and Regulation S offering on Wednesday traded about 7 bps to 11 bps better than issuance on Friday.

The Markit CDX North American Investment Grade 30 index closed steady at a spread of 60 bps.

Outflows turn negative

Elsewhere, for the week ended Sept. 5, Lipper US Fund Flows reported outflows of minus $297 million for corporate investment-grade funds, compared to inflows of $2.25 billion in the previous week.

Inflows to the overall high-grade space, including corporates, Treasuries, agencies and mortgages, jumped to $1.64 billion for the week ended Wednesday from $640 million in the previous week and were driven by short-term funds, according to the BofA Merrill Lynch report.

Outside-of-short-term outflows totaled $100 million for the week, compared to $250 million in the previous week.

Carlyle upsizes

Carlyle Finance (/BBB+/BBB+) priced an upsized $350 million of 30-year senior guaranteed notes with a 5.65% coupon in a Rule 144A- and Regulation S-eligible offering on Friday, according to a market source and a news release.

The deal was upsized from $300 million.

Additional pricing terms were not immediately available.

Price guidance on the notes was in the Treasuries plus 255 bps spread area, plus or minus 5 bps. The notes were initially talked to price in the Treasuries plus 275 bps spread area.

J.P. Morgan Securities LLC and Morgan Stanley & Co., LLC were the bookrunners.

The notes are guaranteed by parent company Carlyle Group LP and indirect subsidiaries Carlyle Holdings I LP, Carlyle Holdings II LP and Carlyle Holdings III LP.

Carlyle Group is a Washington, D.C.-based investment firm.

Halfmoon trades

Halfmoon’s 3.4% notes due Sept. 17, 2021 firmed to 66 bps bid, 63 bps offered in secondary trading, a source said on Friday.

The company sold $1.25 billion of the three-year notes on Thursday at a spread of 70 bps over Treasuries.

A tranche of 4.375% notes due Oct. 15, 2028 softened to 153 bps bid, 148 bps offered.

The notes priced in Thursday’s offering in a $3.8 billion tranche at a spread of 152 bps over Treasuries.

Halfmoon’s $3 billion of 4.9% bonds due Dec. 515, 2048, priced at a spread of 187 bps over Treasuries, firmed to 186 bps bid, 183 bps offered.

Halfmoon will become the parent of Cigna following its $67 billion cash, stock and debt acquisition of Express Scripts Holding Co.

Cigna is a Bloomfield, Conn.-based health service company.

Pfizer mixed

Pfizer’s 3.6% notes due Sept. 15, 2028 were quoted on Friday in secondary trading at 73 bps bid, 71 bps offered, a source said.

The company sold $1 billion of the 10-year notes on Tuesday at a spread of 72 bps over Treasuries.

Pfizer’s $1 billion of 4.2% notes due Sept. 15, 2048 improved to 111 bps bid, 109 bps offered in the secondary market.

The notes priced in Tuesday’s offering at a spread of 115 bps over Treasuries.

The biopharmaceutical company is based in New York.

Eni tightens

Eni’s 4% notes due Sept. 12, 2023 tightened in the secondary market to 124 bps bid, 120 bps offered, according to a market source on Friday.

The company (A3/BBB+/A-) sold $1 billion of the five-year notes Wednesday at a spread of 135 bps over Treasuries.

The tranche of 4.75% notes due Sept. 12, 2028 firmed to 188 bps bid, 185 bps offered.

Eni sold $1 billion of the 10-year notes in the deal on Wednesday at a Treasuries plus 195 bps spread.

The oil and gas company is based in Rome.

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