Supply heavy; UnitedHealth, Deutsche, Concho, CME, GM Financial, Digital Realty among issuers

By Cristal Cody

Tupelo, Miss., June 14 – The high-grade bond market saw heavy new issue volume in Thursday’s session.

Issuers during the day included UnitedHealth Group Inc., Deutsche Telekom International Finance BV, Concho Resources Inc., CME Group Inc., General Motors Financial Co. Inc., Public Service Co. of Colorado, Digital Realty Trust LP, Lloyds Banking Group plc, Dominion Energy Gas Holdings, LLC and Ryder System, Inc.

More than $12 billion of investment-grade bonds priced in the first two sessions of the week, then issuance stayed quiet on Wednesday ahead of the Federal Reserve’s announcement of a 25-basis point rate hike.

Syndicate sources forecasted about $15 billion to $20 billion of total supply for the week.

The Markit CDX North American Investment Grade 30 index came in nearly 3 bps to end the day at a spread of 61 bps.

UnitedHealth sells $4 billion

UnitedHealth Group (A3/A+/A) sold $4 billion of notes in five tranches on Thursday, according to a market source.

The company priced $350 million of three-year floating-rate notes at Libor plus 26 bps.

UnitedHealth sold $400 million of 3.15% three-year fixed-rate notes with a spread of 48 bps over Treasuries.

A $750 million tranche of 3.5% five-year notes priced at a spread of 70 bps over Treasuries.

A $1.15 billion offering of 3.85% 10-year notes came at a Treasuries plus 93 bps spread.

In the final tranche, the company sold $1.35 billion of 4.25% 30-year bonds at a spread of 123 bps over Treasuries.

BofA Merrill Lynch, Barclays, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC were the bookrunners.

UnitedHealth is a diversified health company based in Minnetonka, Minn.

Deutsche Telekom prices

Deutsche Telekom International Finance priced an upsized $1.75 billion of senior notes (Baa1/BBB+/) in two tranches on Thursday, according to a market source.

The company placed $1.2 billion of 4.375% 10-year notes at a spread of Treasuries plus 150 basis points.

Deutsche Telekom sold $550 million of 4.75% 20-year notes at a 175 bps spread over Treasuries.

The deal was increased from $1.5 billion.

Citigroup Global Markets Inc., RBC Capital Markets and TD Securities (USA) LLC were the bookrunners.

Deutsche Telekom International Finance is an Amsterdam, Netherlands-based financing arm of Deutsche Telekom AG.

Concho raises $1.6 billion

Concho Resources priced $1.6 billion of guaranteed senior notes (Baa3/BBB-/BBB-) in two tranches on Thursday, according to an FWP filing with the Securities and Exchange Commission.

Concho sold $1 billion of 4.3% 10-year notes at 99.66 to yield 4.341%, or a spread of Treasuries plus 140 bps. The notes were initially talked to price at a spread of Treasuries plus 160 bps.

The company priced $600 million of 4.85% 30-year notes at a spread of 180 bps over Treasuries. The bonds priced at 99.74 to yield 4.866%. The 30-year bonds were initially talked to price with a 200 bps spread over Treasuries.

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

Concho is a Midland, Texas, oil and natural gas company focused on the Permian basin in southeast New Mexico and west Texas.

CME prints $1.2 billion

CME Group (Aa3/AA-/) priced a $1.2 billion two-tranche offering of senior notes (Aa3/AA-/), according to an FWP filing with the SEC on Thursday.

The company sold $500 million of 3.75% 10-year notes at 99.984 to yield 3.752%, or a spread of Treasuries plus 80 bps.

CME Group priced $700 million of 4.15% 30-year notes at 99.541 to yield 4.177% and a Treasuries plus 110 bps spread.

J.P. Morgan Securities, Barclays, BofA Merrill Lynch, BMO Capital Markets Corp., Credit Suisse Securities (USA), Lloyds Securities Inc., MUFG and Wells Fargo Securities were the bookrunners.

CME Group is a Chicago-based derivatives electronic trading marketplace.

GM Financial in primary

General Motors Financial (Baa3/BBB/BBB) sold $1 billion of 4.15% five-year senior notes on Thursday at a spread of 137.5 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.852 to yield 4.183%.

Banco Bradesco BBI SA, Barclays, Commerz Markets LLC, SMBC Nikko Securities America, Inc., TD Securities and Wells Fargo Securities were the bookrunners.

General Motors Financial is the Fort Worth-based finance subsidiary of General Motors Co.

Public Service of Colorado prices

Public Service Co. of Colorado (A3/A-/A-) priced $700 million of first mortgage bonds (A1/A/A+) in two tranches as a green bond offering on Thursday, according to an FWP filing with the SEC.

The company sold $350 million of 3.7% 10-year bonds at 99.785 to yield 3.726%, or a spread of Treasuries plus 78 bps.

Public Service priced $350 million of 4.1% 30-year bonds at 99.727 to yield 4.116%. The bonds priced with a Treasuries plus 105 bps spread.

Barclays, Credit Suisse Securities, BofA Merrill Lynch and RBC Capital Markets were the bookrunners.

Proceeds from the deal will be used to finance and/or refinance existing and future eligible green expenditures, which include those funded from Jan. 1, 2017 through Dec. 31, 2018. Eligible green expenditures will be used in the development, construction and operation of a wind generation facility in Colorado.

Public Service Co. of Colorado is an electric and natural gas company based in Denver and a subsidiary of Xcel Energy Inc.

Digital Realty sells notes

Digital Realty Trust (Baa2/BBB/BBB) sold $650 million of 4.5% 10-year notes (Baa2/BBB/BBB) at 99.852 to yield 4.468%, or a spread of Treasuries plus 152 bps, according to an FWP filing with the Securities and Exchange Commission on Thursday.

J.P. Morgan Securities, BofA Merrill Lynch, SMBC Nikko Securities, U.S. Bancorp Investments, Inc., Citigroup Global Markets, Credit Suisse Securities, Jefferies LLC, Mizuho Securities USA LLC, Morgan Stanley, MUFG, RBC Capital Markets, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc., TD Securities and Wells Fargo Securities were the bookrunners.

The San Francisco-based company owns, acquires, develops and operates data centers.

Lloyds places $500 million

Lloyds Banking Group priced $500 million of three-year senior floating-rate notes (A3/BBB+/A+) at par to yield Libor plus 80 bps on Thursday, according to an FWP filing with the SEC.

J.P. Morgan Securities was the bookrunner.

Lloyds Banking Group is a bank and financial services company based in London.

Dominion Energy Gas prices

Dominion Energy Gas Holdings sold $500 million of three-year floating-rate senior notes (A2/BBB+/A-) on Thursday at par to yield Libor plus 60 bps, according to an FWP filing with the SEC.

Citigroup Global Markets, Goldman Sachs and U.S. Bancorp Investments were the bookrunners.

Dominion Energy Gas Holdings is a Richmond, Va.-based natural gas company and subsidiary of Dominion Energy Inc.

Ryder places notes

Ryder System priced $450 million of 3.75% five-year medium-term notes (Baa1/BBB+/A-) on Thursday at a spread of 98 bps over Treasuries, according to a market source.

The notes were talked to price in the Treasuries plus 100 bps area, plus or minus 2 bps, tighter than initial price talk in the Treasuries plus 112.5 bps area.

BB&T Capital Markets, BNP Paribas Securities Corp., BofA Merrill Lynch, Mizuho Securities USA LLC and RBC Capital Markets were the bookrunners.

Ryder System is a Miami-based truck rental and fleet management company.

Funds add cash

Investment-grade corporate funds experienced a solid $2.038 billion inflow for the week to June 13, according to fund-flow statistics generated by AMG Data Services Inc.

That was up markedly from $1.325 billion the previous week and came after inflows of $0.849 billion, $2.529 billion, $3.069 billion, $0.804 billion and $0.997 billion in the preceding weeks.

The IG funds continue to have seen 10 inflows in the last 10 weeks.

Apart from the Feb. 14 and Feb. 21 weeks, every week so far this year has seen positive flows and in fact before those two weeks in February investment-grade corporates saw a 21-week run of inflows dating back to mid-September, according to a Prospect News analysis of the data.

The latest addition of funds raises the year-to-date inflow for the IG corporates to $49.65 billion from $47.61 billion the week before, setting another new peak for the year so far.

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