Sumitomo Mitsui sells $4.5 billion; Phillips 66, Deutsche price; Xerox stable; Microsoft eases

By Cristal Cody

Eureka Springs, Ark., Oct. 11 – The investment-grade primary market stayed strong on Tuesday following the long holiday weekend with more than $7 billion of bonds brought to market.

Sumitomo Mitsui Financial Group Inc. priced $4.5 billion of senior notes in five parts during the session, expanding the deal from an initial two-tranche sale.

Phillips 66 Partners LP sold $1,125,000,000 of senior notes in two parts on Tuesday.

Deutsche Bank AG returned to price a $1.5 billion tap of its 4.25% five-year notes on Tuesday after privately placing $3 billion of the notes late Friday.

Xerox Corp.’s bonds were mostly unchanged in the secondary market following the company’s ratings downgrade by Moody’s Investors Service. S&P revised the company’s outlook to negative.

Microsoft Corp.’s 2.4% senior notes due 2026 softened over the day.

The Markit CDX North American Investment Grade index eased 2 bps to close at a spread of 76 bps.

Sumitomo Mitsui’s $4.5 billion

Sumitomo Mitsui Financial Group priced $4.5 billion of senior notes in five parts on Tuesday, according to a market source.

The company sold $500 million of floating-rate notes due Oct. 19, 2018 at Libor plus 67 bps.

The $500 million tranche of 1.762% two-year notes priced at a spread of 90 bps over Treasuries.

Sumitomo Mitsui sold $500 million of five-year floating-rate notes at Libor plus 114 bps.

The company priced $1.5 billion of 2.442% five-year notes at a spread of 115 bps over Treasuries.

Sumitomo Mitsui also sold $1.5 billion of 3.01% 10-year notes at Treasuries plus 125 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and SMBC Nikko Securities America, Inc. were the bookrunners.

The notes are non-callable.

Proceeds will be used for general corporate purposes, according to a 424B5 filing with the Securities and Exchange Commission.

The banking and financial company is based in Tokyo.

Phillips 66 sells $1.1 billion

Phillips 66 Partners sold $1,125,000,000 of senior notes (Baa3/BBB/) in two parts on Tuesday, according to an FWP filing with the SEC.

The company priced $500 million of 3.55% 10-year notes at 99.901 to yield 3.562% and a spread of 180 bps over Treasuries.

Phillips 66 sold $625 million of 4.9% 30-year notes at 99.303 to yield 4.945%. The bonds priced with a 245 bps spread over Treasuries.

The bookrunners were J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs, Mizuho Securities USA Inc., BNP Paribas Securities Corp., Citigroup, Deutsche Bank Securities Inc., DNB Markets, Inc., BofA Merrill Lynch, MUFG, Scotia Capital (USA) Inc., TD Securities (USA) LLC, Barclays and RBC Capital markets, LLC.

The Houston-based oil, petroleum and natural gas company intends to use the proceeds to fund an acquisition of pipeline and terminal assets supporting four Phillips 66 refineries and for general partnership purposes.

Deutsche Bank prices

Deutsche Bank priced $3 billion of 4.25% notes due Oct. 14, 2021 with a spread of Treasuries plus 300 bps in a private placement offering late on Friday, according to a market source.

Deutsche Bank reopened the issue on Tuesday to price a $1.5 billion add-on at a spread of Treasuries plus 290 bps.

Deutsche Bank Securities was the bookrunner for both deals.

The total issue size is $4.5 billion.

Deutsche Bank is a banking and financial services company based in Frankfurt.

Xerox steady

Xerox’s 3.5% senior notes due 2020 were mostly flat at 189 bps bid on Tuesday, according to a market source.

The company sold $400 million of the notes (Baa2/BBB-/BBB-) on Aug. 17, 2015 at a spread of Treasuries plus 212.5 bps.

The maker of office machines is based in Norwalk, Conn.

Microsoft eases

Microsoft’s 2.4% notes due 2026 headed out about 3 bps softer at 74 bps bid on Tuesday, according to a market source.

The notes were quoted modestly better at 67 bps offered at the start of the day.

The company sold $4 billion of the 10-year notes (Aaa/AAA/) on Aug. 1 at a spread of 90 bps plus Treasuries.

The computer software company is based in Redmond, Wash.

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