NextEra Energy, Paccar tap primary market; strong deal volume eyed; Paccar firms; CBS flat

By Cristal Cody

Tupelo, Miss., Feb. 22 – Two high-grade issuers continued a strong week of issuance with deals brought to the primary market on Friday.

NextEra Energy Capital Holdings Inc. priced $800 million of debentures in two tranches.

Paccar Financial Corp. sold $300 million of three-year medium-term notes.

Investment-grade issuers priced more than $27 billion of corporate bonds over the week, beating market forecasts of about $20 billion to $25 billion of supply.

The momentum is expected to continue into next week with syndicate sources forecasting issuance of about $25 billion to $30 billion.

In other market activity on Friday, Woodside Finance Ltd. continued the second day of a two-day roadshow and fixed income investor calls for an upcoming dollar-denominated offering of notes.

The Markit CDX North American Investment Grade 31 index was mostly unchanged on Friday at a spread of 62 basis points.

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

Paccar’s notes tightened 3 basis points on the bid side after issuance.

Boston Scientific Corp.’s $4.3 billion of senior notes (Baa2/BBB-/BBB), priced in five tranches on Thursday, traded about 1 bp to 5 bps tighter.

CBS Corp.’s $500 million of 4.2% guaranteed senior notes due June 1, 2029 (Baa2/BBB/BBB), priced on Wednesday at a spread of 167 bps over Treasuries, headed out on Friday wrapped around issuance at 167 bps bid, 163 bps offered.

Prudential Financial, Inc.’s $1 billion 4.35% of medium-term notes due Feb. 25, 2050 also were unchanged from issuance in secondary trading at 137 bps bid, 134 bps offered. The notes (Baa1/A/) priced Wednesday at a spread of 137 bps over Treasuries.

Meanwhile, investment-grade flows came in weaker over the Presidents Day-holiday week.

“U.S. mutual fund and ETF flows weakened for all asset classes during this past holiday-shortened week ending February 21st,” Yunyi Zhang, a credit strategist with BofA Merrill Lynch, said in a report released on Friday.

Investment-grade inflows slowed to $990 million from $2.64 billion in the previous week. Inflows were driven by a $1.12 billion outflow from ETFs and mitigated by $2.1 billion of inflows to funds, Zhang said.

Short-term high grade saw $710 million of inflows this week following $1.17 billion of inflows a week ago, according to the report.

High-grade excluding short term saw a decline to $270 million of inflows this week from $1.48 billion a week earlier.

NextEra Energy prices $800 million

NextEra Energy Capital Holdings priced $800 million of debentures (Baa1/BBB+/A-) in two tranches on Friday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $400 million of floating-rate notes due Feb. 25, 2022 at par to yield Libor plus 72 bps.

A $400 million tranche of 3.2% three-year fixed-rate notes priced at 99.788 to yield a3.275%, or a Treasuries plus 80 bps spread.

Credit Suisse Securities (USA) LLC was the bookrunner.

Parent company NextEra Energy, Inc. will guarantee the notes.

The energy company is based in Juno Beach, Fla.

Paccar Financial prints

Paccar Financial (A1/A+/) sold $300 million of 2.85% three-year medium-term notes at 99.912 to yield 2.881% and a spread of Treasuries plus 43 bps on Friday, according to a market source and an FWP filing with the SEC.

Price guidance was in the Treasuries plus 45 bps area, plus or minus 2 bps, tighter than initial talk in the Treasuries plus 55 bps spread area.

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

The notes tightened to 42 bps bid, 35 bps offered in secondary trading.

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

Boston Scientific firms

Boston Scientific’s 4% notes due March 1, 2029 traded at 134 bps bid, 130 bps offered in the secondary market on Friday, a source said.

The company priced $850 million of the 10-year notes at a spread of 135 bps over Treasuries.

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

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