Fifth Third, Berkshire Hathaway, RBC, PNC, SMBC price; Ashtead brings split-rated deal

By Cristal Cody

Tupelo, Miss., July 23 – More than $5 billion of bonds priced in the high-grade primary market on Monday.

Fifth Third Bank priced a $1.55 billion three-part offering of senior notes.

Berkshire Hathaway Energy Co. sold $1 billion of long 30-year senior notes.

Royal Bank of Canada tapped the dollar-denominated market with a $900 million sale of two-year floating-rate notes.

PNC Bank, NA sold $750 million of 10-year subordinated notes.

SMBC Aviation Capital Ltd. placed $500 million of five-year notes following a round of fixed-income investor calls.

Also, Ashtead Capital Inc. priced an upsized $600 million of 5.25% guaranteed senior notes due Aug. 1, 2026 (Ba2/BBB-/BBB-) at a spread of Treasuries plus 231 basis points, a source said. The notes were upsized from a $500 million offering and were initially talked to price in the 5.25% to 5.5% area with later guidance at the 5.25% to 5.375% area.

About $20 billion to $25 billion of high-grade supply is forecast for the week, according to syndicate sources.

Last week, more than $33 billion of investment-grade bonds priced with bank and financial supply heavy following the release of second quarter earnings reports.

This week, 200 issuers are scheduled to release earnings, with industrial supply expected to “return gradually in coming weeks,” BofA Merrill Lynch analysts said in a note released on Monday.

The week on average has seen $21 billion of volume from 2011 through 2017, including $12 billion in industrials and $9 billion in financials, according to the note.

The Markit CDX North American Investment Grade 30 index closed mostly flat on Monday at a spread of 62 bps.

Fifth Third sells notes

Fifth Third Bank priced $1.55 billion of senior notes (A3/A-/A-) in three tranches on Monday, according to a market source.

The bank sold $300 million of three-year floating-rate notes at Libor plus 44 bps.

Fifth Third Bank placed $500 million of 3.35% three-year fixed-rate notes at a spread of 63 bps plus Treasuries.

The $750 million tranche of 3.95% seven-year notes priced with a Treasuries plus 103 bps spread.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC were the lead managers.

Fifth Third Bank is a regional banking company based in Cincinnati.

Berkshire Hathaway prices

Berkshire Hathaway Energy priced $1 billion of 4.45% senior notes due Jan. 15, 2049 (A3/A-/BBB+) on Monday at a spread of 135 bps over Treasuries, according to a market source.

The notes were initially talked to price in the Treasuries plus 150 bps spread area.

Citigroup Global Markets Inc., J.P. Morgan Securities, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC were the bookrunners.

Berkshire Hathaway Energy is a Des Moines-based holding company majority owned by Omaha-based Berkshire-Hathaway.

RBC sells floaters

Royal Bank of Canada sold $900 million of two-year floating-rate notes (Aa2/AA-/AA) on Monday at par to yield Libor plus 30 bps, according to an FWP filing with the Securities and Exchange Commission.

The bank sold $850 million of the series G notes due Jan. 10, 2019 on Thursday and $50 million of the notes on Friday.

RBC Capital Markets was the bookrunner.

Royal Bank of Canada is a Toronto-based financial services company.

PNC prices $750 million

PNC Bank sold $750 million of 4.05% 10-year subordinated notes (A3/A-/A) on Monday at a spread of 112 bps over Treasuries, according to a market source.

The notes were initially talked to price with a spread in the Treasuries plus 130 bps area, with guidance later tightened to the Treasuries plus 115 bps area, plus or minus 3 bps.

Citigroup Global Markets, J.P. Morgan Securities, Morgan Stanley and PNC Capital Markets LLC were the bookrunners.

PNC Bank is a subsidiary of PNC Financial Services Group, Inc., a Pittsburgh-based financial services holding company.

SMBC Aviation prints

SMBC Aviation Capital (/BBB+/A-) sold $500 million of 4.125% five-year notes on Monday at a spread of 133 bps over Treasuries, according to a market source.

The notes priced on the tight side of guidance in the Treasuries plus 135 bps area, plus or minus 2 bps, and better than initial talk in the Treasuries plus 155 bps area.

Citigroup Global Markets, Credit Agricole Corporate and Investment Bank, Goldman Sachs & Co. LLC, J.P. Morgan Securities, RBC Capital Markets and SMBC Nikko Securities America, Inc. were the bookrunners.

SMBC Aviation Capital is a Dublin-based global aircraft leasing company.

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