Proctor & Gamble, Colgate price as primary pauses; Coca-Cola, LabCorp 10-year notes tighten

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 30 - The high-grade new issue market was mostly quiet on Wednesday as the Federal Reserve announced it would continue its stimulus program.

The session saw Procter & Gamble Co. bring a $2 billion sale of notes in three tranches.

Proctor & Gamble sold $500 million of three-year floaters at par to yield Libor plus 8 basis points and $500 million of 0.75% three-year notes at Treasuries plus 20 bps.

There was also $1 billion of 1.6% notes priced with a spread of 40 bps over Treasuries.

Colgate-Palmolive Co. also priced a new deal on Wednesday, selling $81.99 million of floating-rate notes due 2053 at par to yield Libor minus 30 bps.

The day's new deals bring the week's new issuance total to $17.7 billion so far.

Primary activity is expected to resume on Thursday, according to a market source, and the week's total could surpass earlier predictions of a $15 billion to $20 billion week.

High-grade bonds were mixed over the session, according to market sources.

The Markit CDX North American Investment Grade series 21 index eased 2 bps to a spread of 73 bps.

In the secondary market, Procter & Gamble's 1.6% notes traded wrapped around issuance, according to a trader.

Paper sold in Tuesday's session tightened in aftermarket trading, according to informed sources.

Coca-Cola Co.'s senior notes (Aa3/AA-/A+) sold in five tranches on Tuesday firmed on Wednesday, with the 10-year tranche more than 10 bps better, a trader said.

Laboratory Corp. of America Holdings' two tranches of senior notes (Baa2/BBB/) sold on Tuesday traded 2 bps to 10 bps better in the secondary market, according to a trader.

In other new issue trading, Toronto-Dominion Bank's 2.625% senior notes due 2018 reopened on Tuesday traded about 5 bps tighter, a trader said.

Proctor & Gamble prices tight

Proctor & Gamble priced a combined $2 billion of senior notes in three tranches (Aa3/AA-/) on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The deal included $500 million of three-year floating-rate notes priced at par to yield Libor plus 8 bps.

There was also $500 million of 0.75% three-year notes sold with a spread of Treasuries plus 20 bps, or 99.991, to yield 0.753%.

A $1 billion tranche of 1.6% five-year notes sold at 40 bps over Treasuries. Pricing was at 99.831 to yield 1.635%.

Both fixed-rate tranches priced at the tight end of talk.

Procter & Gamble's 1.6% notes traded flat at 140 bps bid, 139 bps offered, a trader said.

Proceeds will be used for general corporate purposes.

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC were the joint bookrunners.

Proctor & Gamble is a Cincinnati-based consumer products company.

Colgate sells floaters

The primary also saw Colgate-Palmolive sell $81,989,000 of medium-term floating-rate notes, series H, due 2053 at par to yield Libor minus 30 bps, according to an FWP filing with the SEC.

Proceeds will be used for general corporate purposes, including the retirement of commercial paper.

UBS Securities LLC, J.P. Morgan Securities LLC, Morgan Stanley, BofA Merrill Lynch and Wells Fargo Securities, LLC were the joint bookrunners.

Colgate-Palmolive is a New York City-based consumer products company.

Coca-Cola better

In the secondary market, Coca-Cola's 1.65% notes due 2018 were unchanged in Wednesday's trade at 42 bps bid, 39 bps offered, a trader said.

The company sold $1.25 billion of the five-year notes at Treasuries plus 42 bps.

Coca-Cola's tranche of 3.2% notes due 2023 tightened in secondary trading on Wednesday to 57 bps bid, 56 bps offered.

The company priced $1.5 billion of the 10-year notes at Treasuries plus 70 bps.

The beverage company is based in Atlanta.

LabCorp tightens

In the secondary market going out on Wednesday, LabCorp's 2.5% senior notes due 2018 firmed to 121 bps bid, 119 bps offered, a trader said.

The company sold $400 million of the five-year notes with a spread of Treasuries plus 125 bps on Tuesday.

The company's 4% notes due 2023 came in 10 bps from issuance to 155 bps bid, 153 bps offered, the trader said.

LabCorp priced $300 million of the 10-year notes at 165 bps over Treasuries.

The independent clinical laboratory company is based in Burlington, N.C.

TD Bank's 2.625% notes

Toronto-Dominion Bank's 2.625% senior medium-term notes due 2018 traded late Wednesday afternoon at 63 bps bid, 61 bps offered, a trader said.

TD Bank sold $850 million in a reopening of the notes on Tuesday at a spread of Treasuries plus 68 bps.

The financial services and banking company is based in Toronto.

Bank/brokerage CDS costs mixed

Investment-grade bank and brokerage CDS prices were unchanged to higher on Wednesday, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 96 bps bid, 100 bps offered. Citigroup Inc.'s CDS costs rose 1 bp to 88 bps bid, 93 bps offered. JPMorgan Chase & Co.'s CDS costs were flat at 83 bps bid, 88 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 52 bps bid, 56 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 96 bps bid, 101 bps offered. Morgan Stanley's CDS costs eased 1 bp to 111 bps bid, 115 bps offered. Goldman Sachs Group, Inc.'s CDS costs rose 1 bp to 113 bps bid, 117 bps offered.

Paul Deckelman contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.