High-grade supply robust; BNP, Kinder Morgan, American Express, Deutsche among issuers

By Cristal Cody

Tupelo, Miss., Feb. 22 – Investment-grade issuers priced more than $11 billion of new bonds on Thursday.

BNP Paribas SA (Aa3/A/A+) tapped the primary market with a $2.75 billion two-tranche offering of notes.

Kinder Morgan, Inc. sold $2 billion of senior notes in two parts.

American Express Co. raised $2 billion in a two-tranche note deal.

Deutsche Bank AG, New York Branch sold $1.4 billion of notes in two tranches on Thursday.

Boston Scientific Corp. came with $1 billion of 10-year senior notes.

PPG Industries, Inc. raised $1 billion in a two-part fixed-rate bond deal.

In other issuance, BNZ International Funding Ltd. sold $500 million of five-year notes.

Paccar Financial Corp. priced $400 million of three-year notes.

Also, Highwoods Realty LP placed $350 million of 10-year notes.

Deal action also was strong on Wednesday and included issuance from MasterCard Inc., Boeing Co., Motorola Solutions, Inc., Western Gas Partners, LP, Ryder System, Inc. and Bank Nederlandse Gemeenten NV.

The Markit CDX North American Investment Grade 29 index softened about 2 basis points to end the day at a spread of 58 bps.

BNP prices $2.75 billion

BNP Paribas’ deal included a $1.5 billion tranche of 3.5% five-year notes priced with a spread of Treasuries plus 90 bps, according to a market source.

Initial price talk was in the Treasuries plus 110 bps area with guidance later tightening to the Treasuries plus 95 bps area.

In the second tranche, BNP Paribas sold $1.25 billion of 4.375% 15-year notes on the tight side of guidance at a Treasuries plus 150 bps spread. The notes were initially talked to price in the Treasuries plus 170 bps area, and guidance tightened to the 155 bps spread area.

BNP Paribas Securities Corp. was the bookrunner.

BNP Paribas is a Paris-based banking and financial services company.

Kinder Morgan sells $2 billion

Kinder Morgan sold $2 billion of senior notes (Baa3/BBB-/BBB-) in two parts, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company priced $1.25 billion of 4.3% 10-year notes at 99.622 to yield 4.347%. The notes priced with a spread of Treasuries plus 143 bps, on the tight side of talk in the Treasuries plus 145 bps area.

In the second tranche, Kinder Morgan sold $750 million of 5.2% 30-year notes at 99.759 to yield 5.216%, or a spread of Treasuries plus 200 bps. The bonds were talked to price in the Treasuries plus 205 bps spread area.

The bookrunners were Mizuho Securities USA Inc., MUFG, SMBC Nikko Securities Americas Inc., Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and SunTrust Robinson Humphrey Inc.

Kinder Morgan is a Houston-based pipeline transportation and energy storage company.

American Express prints notes

American Express priced $2 billion of senior notes (A3/BBB+/A) in two tranches, according to a market source.

The company priced $400 million of five-year floating-rate notes at Libor plus 65 bps.

American Express sold $1.6 billion of 3.4% five-year fixed-rate notes with a spread of 77 bps over Treasuries.

The deal had a total book size of $3.3 billion.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC were the bookrunners.

The credit card services company is based in New York.

Deutsche Bank sells notes

Deutsche Bank, New York Branch priced $1.4 billion of notes (Baa2/BBB+) in two tranches, a market source said.

The company sold $400 million of five-year floating-rate notes at Libor plus 123 bps.

Deutsche Bank priced $1 billion of 3.95% five-year fixed-rate notes at a spread of Treasuries plus 135 bps.

Deutsche Bank Securities Inc. was the bookrunner.

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

Boston Scientific in primary

Boston Scientific priced $1 billion of 4% 10-year senior notes (Baa2/BBB-/BBB)) at a spread of Treasuries plus 110 bps, according to an FWP filed with the SEC.

The notes priced at 99.828 to yield 4.021%.

Barclays, Citigroup Global Markets, BofA Merrill Lynch, Deutsche Bank Securities, J.P. Morgan Securities and Wells Fargo Securities, LLC were the bookrunners.

Boston Scientific is a medical device maker based in Marlborough, Mass.

PPG prices $1 billion

PPG Industries priced $1 billion of fixed-rate notes (A3/A-/A-) in two tranches, according to a market source and an FWP filed with the SEC.

The company sold $300 million of 3.2% five-year notes at 99.767 to yield 3.25%, or a spread of Treasuries plus 60 bps. The notes priced on the tight side of guidance in the 65 bps over Treasuries spread area.

PPG Industries placed $700 million of 3.75% 10-year notes at 99.857 to yield 3.767%. The notes priced on top of guidance at a Treasuries plus 85 bps spread.

BNP Paribas Securities, J.P. Morgan Securities, Citigroup Global Markets, Goldman Sachs, MUFG and PNC Capital Markets LLC were the bookrunners.

PPG is a diversified coatings and chemical manufacturing company based in Pittsburgh.

BNZ International sells notes

BNZ International Funding sold $500 million of 3.375% five-year notes (A1/AA-) on top of guidance at a spread of Treasuries plus 85 bps, according to a market source.

Goldman Sachs, J.P. Morgan Securities, nabSecurities, LLC and TD Securities (USA) LLC were the bookrunners.

The company is a financing arm for Auckland, New Zealand-based Bank of New Zealand.

Paccar brings three-year notes

Paccar Financial (A1/A+/) sold $400 million of 2.8% three-year medium-term notes at a spread of Treasuries plus 40 bps on Thursday, according to a market source.

The notes were talked to price in the Treasuries plus 40 bps to 43 bps area.

Citigroup Global Markets, J.P. Morgan Securities, Mizuho Securities and TD Securities were the bookrunners.

Paccar Financial is a financing arm of Bellevue, Wash.-based Paccar Inc.

Highwoods Realty prices

Highwoods Realty priced $350 million of 4.125% 10-year notes (Baa2/BBB/) at 98.818 to yield 4.271%, or a spread of Treasuries plus 135 bps, according to an FWP filing with the SEC.

Wells Fargo Securities, BofA Merrill Lynch, Jefferies & Co., BB&T Capital Markets, Capital One Securities, Inc., Regions Securities LLC and U.S. Bancorp Investments, Inc. were the bookrunners.

The real estate investment trust is based in Raleigh, N.C.

Funds bounce back

Investment-grade corporate mutual funds saw a $1.57 billion net inflow figure for the week ended Wednesday, Feb. 21, according to numbers released on Thursday by AMG Data Services Inc., an Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

That was a solid comeback from last week, when those high-grade funds had posted a rare $790 million net outflow – the first downturn after 21 straight weeks of gains dating back to mid-September, according to a Prospect News analysis of the data.

Those gains had included the $4.73 billion for the seven-day period ended Feb. 7 – the biggest improvement seen so far this year, eclipsing the previous mark of $4.19 billion recorded during the Jan. 10 week, and one of the largest weekly inflows ever recorded for those IG funds.

This week’s funds upturn raises the estimated year-to-date net inflow figure for the IG corporates to $19.66 billion from last week’s $18.09 billion total.

That also establishes a new peak cumulative inflow level for the year, topping the $18.88 billion during the Feb. 7 week, which had been the funds’ sixth straight new peak level for the year so far.

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