Sweden wraps funding; CSX, Toyota Motor Credit, Ecolab price; credit spreads ease

By Cristal Cody

Eureka Springs, Ark., Oct. 13 – Investment-grade bond supply ended Thursday on a strong note with more than $8 billion of securities sold during the session.

The Kingdom of Sweden priced $3 billion of three-year benchmark notes on Thursday, attracting more than 70 investors for the final debt offering this year, according to a market source and a news release.

Banks took 43% of the notes, while pension funds and institutions purchased 27%, central banks bought 24% and the remainder went to other investors.

Investors in Europe purchased 37% of the notes, and Nordic investors took 24% of the securities. Investors in the Americas bought 28%, and investors in Asia purchased 11% of the notes.

“There was a great demand for our bonds, and the market conditions were positive,” Maria Norstrom, head of funding at the Swedish National Debt Office, said in the release. “This enabled us to price the issue at a favorable level. We are pleased to see that the bond was placed with a large number of investors around the world.”

The debt office planned to sell a total of SEK 59 billion of foreign currency bonds in 2016. Thursday’s offering marks Sweden’s third and final foreign-currency bond sale for the Sveriges Riksbank in 2016, the release said.

In other pricing action, CSX Corp. sold $2.2 billion of fixed-rate notes in three tranches on Thursday.

Toyota Motor Credit Corp. priced $2 billion of medium-term notes in three parts.

Ecolab Inc. came with a $1 billion two-part offering of notes.

Also, the Japan International Cooperation Agency priced $500 million of 10-year guaranteed bonds.

The Markit CDX North American Investment Grade index was modestly softer over the day at a spread of 76 basis points.

Sumitomo Mitsui Financial Group Inc.’s senior notes that were priced on Tuesday traded about 3 bps to 5 bps better than issuance in the secondary market earlier on Thursday.

Phillips 66 Partners LP’s 3.55% senior notes due 2026 that were sold on Tuesday tightened about 7 bps in secondary trading.

Sweden prices $3 billion

Sweden (Aaa/AAA/AAA) sold $3 billion of 1.125% three-year benchmark notes on Thursday at 99.727 to yield 1.218%, with more than 70 investors in the bid, according to a market source and news release.

The notes priced at mid-swaps plus 6 bps, on the tight side of guidance.

Barclays, Goldman Sachs & Co., HSBC Securities (USA) Inc. and SEB were the lead managers.

Proceeds will be used to refinance loans to the Sveriges Riksbank, the central bank of Sweden.

CSX sells notes

CSX priced $2.2 billion of fixed-rate notes (Baa1/BBB+) in three tranches on Thursday on the tight side of guidance, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $700 million of 2.6% 10-year notes at 99.596 to yield 2.646%. The notes priced with a spread of Treasuries plus 90 bps.

CSX priced $800 million of 3.8% 30-year notes at 99.431 to yield 3.832%, or 135 bps over Treasuries.

The company sold $700 million of 4.25% 50-year notes at 99.751 to yield 4.262%. The bonds priced with a 178 bps spread over Treasuries.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, UBS Securities LLC, Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used to redeem in full the company’s 5.6% notes due May 1, 2017, 6.25% notes due March 15, 2018 and 7.375% notes due Feb. 1, 2019 and for general corporate purposes.

The transportation company is based in Jacksonville, Fla.

Toyota prices $2 billion

Toyota Motor Credit priced $2 billion of series B medium-term notes (Aa3/AA-) in three tranches on Thursday, according to FWP filings with the SEC.

Toyota Motor Credit priced $500 million of three-year floaters at par to yield Libor plus 44 bps.

Toyota Motor Credit priced $1 billion of 1.55% three-year notes at 99.95 to yield 1.567%, or Treasuries plus 58 bps.

A $500 million tranche of 2.25% seven-year notes priced at 99.736 to yield 2.291%, or 75 bps over Treasuries.

The bookrunners were BofA Merrill Lynch, RBC Capital Markets, LLC, SG Americas Securities, LLC and SMBC Nikko Securities America, Inc.

Toyota Motor Credit is a financing arm and subsidiary of Toyota Motor Corp.

Ecolab raises $1 billion

Ecolab priced $1 billion of fixed-rate notes in two tranches on Thursday, according to a market source.

The company sold $750 million of 2.7% 10-year notes at 100 bps over Treasuries.

Ecolab priced $250 million of 3.7% 30-year notes with a spread of 125 bps over Treasuries.

The notes feature a make-whole call and then a par call, according to a 424B5 filed with the SEC.

Citigroup and Credit Suisse were the bookrunners.

Proceeds will be used to repay commercial paper borrowings and the company’s 3% senior notes due 2016 at maturity.

The cleaning and sanitizing company is based in St. Paul, Minn.

Japan International prices

The Japan International Cooperation Agency priced $500 million of 2.125% 10-year guaranteed bonds with a spread of 42.9 bps over Treasuries, according to a market source on Thursday.

Barclays, BofA Merrill Lynch and Daiwa Capital Markets Europe Ltd. were the bookrunners.

Proceeds will be allocated to the agency’s finance and investment account and may be allocated for investments in eligible projects, according to a 424B1 filing with the SEC.

Japan International Cooperation Agency is a Japan government-owned agency that promotes international cooperation and development of Japanese and global economies.

Sumitomo Mitsui firms

Sumitomo Mitsui Financial’s 2.442% notes due 2021 were quoted early Thursday at 110 bps offered in the secondary market, a source said.

The company sold $1.5 billion of the five-year notes on Tuesday at a spread of 115 bps over Treasuries.

The tranche of 3.01% notes due 2026 traded at 122 bps offered.

Sumitomo Mitsui Financial sold $1.5 billion of the 10-year notes in Tuesday’s sale at Treasuries plus 125 bps.

The banking and financial company is based in Tokyo.

Phillips 66 improves

Phillips 66 Partners’ 3.55% notes due 2026 traded at 173 bps offered, according to a market source.

The company priced $500 million of the 10-year notes (Baa3/BBB) on Tuesday at a spread of 180 bps over Treasuries.

The oil, petroleum and natural gas company is based in Houston.

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