Unilever, RBC, Capital One, Citizens, First Republic Bank price; bonds mixed; Markit CDX eases

By Cristal Cody

Eureka Springs, Ark., July 25 – Investment-grade corporate issuers kicked the week off at a strong pace with more than $5 billion of bonds priced on Monday.

Unilever Capital Corp. sold $1.25 billion of senior notes in two parts during the session.

Royal Bank of Canada priced a $1.8 billion two-tranche offering of medium-term notes.

Capital One Financial Corp. came with a $1.5 billion sale of 10-year subordinated notes on Monday.

Piedmont Natural Gas Co., Inc. brought $300 million of 30-year senior notes to market.

Citizens Financial Group, Inc. placed $350 million of five-year senior notes.

First Republic Bank sold $400 million of 30-year subordinated notes.

The Markit CDX North American Investment Grade index eased 2 basis points to close at a 73 bps.

In the secondary market, Verizon Communications Inc.’s bonds traded mostly flat to about 4 bps tighter on the news the company will acquire Yahoo! Inc.’s operating business, according to a market source.

Discover Bank’s $1 billion offering of 3.45% notes due 2026 that priced on Thursday traded mostly unchanged on Monday but about 5 bps better than issuance.

JPMorgan Chase & Co.’s 2.95% senior notes due 2026 were flat.

Unilever prices $1.25 billion

Unilever Capital priced $1.25 billion of senior notes in two parts on Monday, according to a market source and a 424B3 filing with the Securities and Exchange Commission.

The company sold $550 million of 1.375% five-year notes at 40 bps plus Treasuries on the tight side of guidance.

Unilever priced $700 million of 2% 10-year notes with a spread of 60 bps over Treasuries, tighter than talk.

The notes are guaranteed unconditionally by Unilever NV, Unilever plc and Unilever United States, Inc.

Goldman Sachs & Co., J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The U.S. office of the Dutch and English consumer goods company is located in Englewood Cliffs, N.J.

RBC sells $1.8 billion

Royal Bank of Canada priced $1.8 billion of series G medium-term notes in two parts on Monday, according to FWP filings with the SEC.

The bank sold $300 million of senior three-year floating-rate notes at par to yield Libor plus 48 bps.

RBC priced $1.5 billion of 1.5% senior notes due July 29, 2019 at 99.886 to yield 1.539% and a spread of 68 bps plus Treasuries.

RBC Capital Markets, LLC, Morgan Stanley and Wells Fargo Securities, LLC were the lead managers.

RBC is a Toronto-based financial services company.

Capital One sells $1.5 billion

Capital One Financial priced $1.5 billion of 3.75% 10-year subordinated notes on Monday with a spread of 222 bps over Treasuries, according to a market source and a 424B5 filed with the SEC.

The notes priced on the tight side of talk of 225 bps plus Treasuries area, in from initial guidance in the 235 bps area.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs, Morgan Stanley and Capital One Securities were the bookrunners.

Proceeds will be used for general corporate purposes.

The financial services company is based in McLean, Va.

Piedmont Natural Gas prices

Piedmont Natural Gas sold $300 million of 3.64% 30-year senior notes at 99.878 to yield 3.646%, according to an FWP filing with the SEC.

The notes (A2/A/) priced with a spread of 135 bps over Treasuries.

The bookrunners were RBC and Wells Fargo.

Proceeds will be used to finance capital expenditures, to repay outstanding short-term unsecured notes under the company’s commercial paper program and for general corporate purposes.

The natural gas distributor is based in Charlotte, N.C.

Citizens Financial sells notes

Citizens Financial Group sold $350 million of 2.375% five-year senior notes with a spread of 125 bps over Treasuries on Monday, according to an FWP filing with the SEC.

The notes (/BBB+/BBB+) priced at 99.948 to yield 2.386%.

Credit Suisse, Goldman Sachs, Morgan Stanley, Citigroup, Citizens Capital Markets, Inc. and JPMorgan were the bookrunners.

Proceeds, plus available cash, will be used to repurchase $334 million of the company’s 4.082% fixed-rate subordinated notes due 2025 and $166 million of its 4.023% fixed-rate subordinated notes due 2024 owned by Royal Bank of Scotland, according to a 424B5 SEC filing.

The bank is based in Providence, R.I.

First Republic prices $400 million

First Republic Bank sold $400 million of 4.375% 30-year subordinated notes with a spread of 220 bps over Treasuries on Monday, according to a market source and a company news release.

The notes came on the tight side of talk in the 225 bps area and in from initial price guidance around the 250 bps area.

BofA Merrill Lynch, JPMorgan and Morgan Stanley were the bookrunners.

The subordinated notes are intended to qualify as tier 2 capital for bank regulatory purposes.

First Republic expects to use the proceeds for general corporate purposes, which may include funding loans or purchasing investment securities for its portfolio.

The company may also use the proceeds, along with cash on hand, to redeem its 6.7% noncumulative perpetual series A preferred stock, which is redeemable at First Republic’s option on or after Jan. 30, 2017.

First Republic Bank is a San Francisco-based private banking institution.

Discover mostly flat

Discover Bank’s 3.45% notes due 2026 traded mostly unchanged to modestly softer earlier on Monday at 185 bps offered, according to a market source.

The notes were seen on Friday afternoon at 186 bps bid, 184 bps offered.

The company sold $1 billion of the notes (Baa3/BBB/BBB+) on Thursday at 190 bps over Treasuries.

Discover Bank is a banking and payment services company based in Riverwoods, Ill.

JPMorgan steady

JPMorgan Chase’s 2.95% notes due 2026 were unchanged from Friday at 135 bps offered, according to a market source.

JPMorgan Chase sold $3 billion of the notes (A3/A-A+) on July 14 at a spread of 145 bps over Treasuries.

The financial services company is based in New York City.

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