Deal volume strong; John Deere, Kraft, Goldman Sachs Bank price; Japan Agency offers notes

By Cristal Cody

Tupelo, Miss., June 4 – High-grade issuers brought nearly $10 billion of bonds to the primary market on Monday.

Kraft Heinz Foods Co. priced $3 billion of guaranteed senior notes in three tranches.

John Deere Capital Corp. sold $1.35 billion of senior medium-term notes in three parts.

Hyundai Capital America priced $1.3 billion of notes in three tranches following the end of the company’s roadshow on Friday.

Goldman Sachs Bank USA came with an inaugural $1 billion offering of two-year senior notes.

Other issuers during the session included PSEG Power LLC, Tampa Electric Co., Kennametal Inc. and Fifth Third Bancorp.

Coming up on Tuesday, Japan International Cooperation Agency is marketing a no-grow $500 million offering of 10-year bonds.

Syndicate sources expect about $25 billion to as much as $35 billion of deal volume for the week, following thin supply in the previous week.

Issuance is expected to remain elevated in June with sources forecasting about $80 billion to as much as $100 billion of supply over the month.

High-grade corporate volume has averaged nearly $91 billion in June over the past three years, a source said.

The Markit CDX North American Investment Grade 30 index firmed about 1 basis point to close at a spread of 64 bps.

Kraft Heinz prices $3 billion

Kraft Heinz Foods priced $3 billion of guaranteed senior notes (Baa3/BBB/BBB-) in three tranches on Monday, according to a market source.

The company sold $300 million of 3.375% three-year notes at a spread of 75 bps over Treasuries, on the tight side of guidance in the Treasuries plus 80 bps area, plus or minus 5 bps.

Kraft Heinz priced $1.6 billion of 4% five-year notes with a Treasuries plus 125 bps spread. The notes were talked to come with a spread in the Treasuries plus 125 bps area, plus or minus 5 bps.

The $1.1 billion tranche of long 4.625% 10-year notes priced at a 175 bps over Treasuries spread. Guidance on the notes was in the Treasuries plus 175 bps area, plus or minus 5 bps.

Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

Kraft Heinz is a Chicago-based food company.

John Deere prints $1.35 billion

John Deere Capital priced $1.35 billion of series G senior medium-term notes (A2/A/A) in three tranches on Monday, according to FWP filings with the Securities and Exchange Commission.

The company sold $750 million of floating-rate notes due Jan. 7, 2020 at par to yield Libor plus 18 bps.

The company sold $300 million of five-year floating-rate notes at par to yield Libor plus 55 bps.

The $300 million tranche of 3.45% five-year notes priced at 99.945 to yield 3.462% and a spread of 68 bps over Treasuries.

Deutsche Bank Securities Inc., J.P. Morgan Securities and RBC Capital Markets, LLC were the bookrunners.

John Deere Capital is a financing arm of Moline, Ill.-based farm equipment supplier Deere & Co.

Hyundai Capital America sells notes

Hyundai Capital America (Baa1/A-/) priced $1.3 billion of notes in three tranches on Monday, according to a market source.

The company sold $650 million of floating-rate notes due July 8, 2021 at Libor plus 94 bps.

Hyundai priced $350 million of 3.75% three-year notes at a spread of 115 bps over Treasuries.

The $300 million tranche of 4.125% five-year notes were sold with a Treasuries plus 135 bps spread.

BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Societe Generale CIB and RBC Capital Markets were the bookrunners.

The company held a roadshow in the previous week in the United States, Europe and Asia markets.

Hyundai Capital America is an Irvine, Calif.-based auto financing arm of the Hyundai Motor Co.

Goldman Sachs Bank debuts

Goldman Sachs Bank USA (A1/A+/A+) priced $1 billion of 3.20% two-year senior notes on Monday at 99.977 to yield 3.212%, or a spread of Treasuries plus 70 bps, according to a market source.

The notes were initially talked to price with a spread in the Treasuries plus 80 bps to 85 bps area.

The debut debt offering had a final book size of $4.2 billion.

Goldman Sachs was the bookrunner.

The debt issuing entity is part of Goldman Sachs Group Inc.

The financial services company is based in New York City.

PSEG Power prices $700 million

PSEG Power sold $700 million of 3.85% five-year senior notes (Baa1/BBB+/) at 99.947 to yield 3.862%, or a spread of Treasuries plus 108 bps on Monday, according to an FWP filing with the SEC.

The bookrunners were Barclays, Goldman Sachs, J.P. Morgan Securities and Morgan Stanley.

PSEG Fossil LLC, PSEG Nuclear LLC and PSEG Energy Resources & Trade LLC will guarantee the notes.

The energy company is based in Newark, N.J.

Tampa Electric sells bonds

Tampa Electric priced $350 million of 4.30% 30-year notes on Monday at a spread of 125 bps over Treasuries, according to an FWP filing with the SEC.

The notes (A3/BBB+/) priced at 99.464 to yield 4.332%.

The bookrunners were J.P. Morgan Securities, RBC Capital Markets, Scotia Capital (USA) Inc., MUFG and Wells Fargo Securities.

The company is a Tampa, Fla.-based subsidiary of TECO Energy, Inc., an energy-related holding company.

Kennametal prices $300 million

Kennametal priced $300 million of 4.625% 10-year senior notes on Monday at a spread of 178 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa3/BBB-/BBB) were sold at 99.271 to yield 4.717%.

BofA Merrill Lynch and J.P. Morgan Securities were the bookrunners. PNC Capital Markets LLC was the passive bookrunner.

Kennametal is a Latrobe, Pa., manufacturer, marketer and distributor of cutting tools, tooling systems, supplies and technical services and wear-resistant parts.

Fifth Third Bancorp sells floaters

Fifth Third Bancorp sold $250 million of three-year floating-rate senior notes (/BBB+/A-) on Monday at par to yield Libor plus 47 bps, according to an FWP filing with the SEC.

RBC Capital Markets was the bookrunner.

Fifth Third is a Cincinnati-based financial services company.

Japan Agency plans deal

Japan International Cooperation Agency (/A+/) plans to price $500 million of global guaranteed bonds due June 12, 2028 on Tuesday, according to an informed source.

The notes were initially talked to price with a spread in the mid-swaps plus 45 bps area.

The deal size is not expected to grow.

Barclays, Citigroup Global Markets, Daiwa Capital Markets Europe and HSBC Securities are the bookrunners.

Japan International Cooperation Agency is a Japanese government-owned agency that promotes international cooperation and development of Japanese and global economies.

© 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.