TD, Delta, Florida Gas, Pinnacle, Ares, World Bank tap primary; Fidelis, Amcor on deck

By Cristal Cody

Tupelo, Miss., June 10 – A handful of issuers marketed and sold bonds in the high-grade primary market on Wednesday as the Federal Reserve Board concluded its two-day policy meeting with no additional rate changes.

The Federal Open Market Committee said it would maintain the target range for the federal funds rate at 0% to 0.25%.

“The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the FOMC said in a release.

The next Fed policy meeting is scheduled for July 28-29.

In new issuance on Wednesday, Toronto-Dominion Bank priced $2.75 billion of senior medium-term notes (Aa3/A) in two tranches.

Delta Air Lines Inc. (Baa3/BB/BB+) sold $1.25 billion of 7.375% split-rated notes due Jan. 15, 2026.

Florida Gas Transmission Co. LLC (Baa2/BBB+) priced a $500 million Rule 144A and Regulation S offering of 10-year senior notes.

Pinnacle West Capital Corp. brought $500 million of five-year senior notes (A3/BBB+/A-) to the primary market.

Ares Management Corp. subsidiary Ares Finance Co. II LLC sold $400 million of 10-year guaranteed senior notes (BBB+/BBB+) in an offering upsized from $350 million.

Also on Wednesday, Sempra Energy priced $900 million of split-rated perpetual fixed-rate reset preferred stock (Ba1/BBB-/BBB-) tighter than talk.

In other supply, the Federal Home Loan Bank System priced a $500 million reopening of its 0.5% global notes due April 14, 2025.

FHLBank also plans to price new two-year global notes on Thursday.

Also on Wednesday, International Bank for Reconstruction and Development, or World Bank, priced C$1.5 billion of five-year global benchmark sustainable development bonds (Aaa/AAA/AAA) in a deal that attracted 55 investor orders.

“An outstanding return by the World Bank to the Canadian dollar market, once again demonstrating the broad investor appeal of their sustainable development bonds,” Adrien de Naurois, SSA Syndicate at BofA Securities, Inc., said in in a news release. “A high-quality orderbook with over 50 orders is testament of the World Bank’s ability to attract long-term buyers globally.”

New supply

Meanwhile, Fidelis Insurance Holdings Ltd. (BBB) is expected to bring a Rule 144A dollar-denominated offering of 10-year senior notes to the primary market on Thursday following fixed-income investor calls over the day.

Fidelis said in a news release on Wednesday that it also has executed agreements to raise a further $500 million of equity capital from existing investor relationships.

The company has now secured $800 million of additional equity in the last six months and will have capital for underwriting in excess of $2 billion.

Fidelis said the equity will allow the company to take advantage of a hardening rating environment.

“We are seeing a broad-based hardening of rates and improvements to terms and conditions in multiple lines of business,” Richard Brindle, chairman and chief executive officer of Fidelis, said in the release. “This is due not just to the effects of covid-19, but to multiple factors from ILS retrenchment to the increasing realization that underwriting profits are the only sustainable basis for (re)insurers to build long-term business success.”

In other action, Amcor plc (Baa2/BBB) is in the deal pipeline after holding global fixed-income investor calls on Wednesday for an offering of dollar- and euro-denominated notes.

High-grade corporate supply week to date totals over $25 billion, including more than $12 billion of volume brought on Monday and over $7 billion of paper priced on Tuesday. The sovereign, supranational and agency space was quiet on Monday, while Tuesday’s session saw $6.5 billion of volume.

About $30 billion to $40 billion of investment-grade deal volume is expected in the primary market this week.

Credit spreads softened less than 1 basis point on Wednesday after easing about 7 bps over the first two sessions of the week. The Markit CDX North American Investment Grade 33 index closed the day at a spread of 72.49 bps.

New issues were mixed in the secondary market, sources said.

Equinix Inc.’s $2.6 billion of senior notes (Baa3/BBB-/BBB-) priced in four tranches on Monday traded 3 bps better on the five-year tranche, while the seven-, 10- and 30-year tranches traded about 1 bp wider than issuance.

The Redwood City, Calif.-based data center company sold $500 million of 1.25% notes due July 15, 2025 at a spread of Treasuries plus 85 bps; $500 million of 1.8% notes due July 15, 2027 at Treasuries plus 115 bps; $1.1 billion of 2.15% notes due July 15, 2030 at Treasuries plus 130 bps and $500 million of 3% notes due July 15, 2050 at a spread of Treasuries plus 145 bps.

Initial price talk on the five-year notes was in the Treasuries plus 120 bps area, while the seven-year notes were talked at the 150 bps spread area, the 10-year notes at the 165 bps spread area and the 30-year notes at the 185 bps spread area.

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