EDC, CBRE do deals ahead of jobs report; Apple, Oracle long bonds firm; Microsoft flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 6 – Export Development Canada, CBRE Services Inc. and Airgas Inc. priced new upsized investment-grade bond offerings on Thursday ahead of the jobs report at week’s end.

EDC sold $1 billion of four-year floaters in line with talk, while CBRE upsized its $600 million new issue from original size thoughts of $350 million, ultimately pricing at the tight end of guidance.

Airgas sold its $400 million new issue around 14.5 basis points inside the mid-point of initial price whispers.

Also during the session, Public Service Co. of New Mexico entered the primary to price $250 million of notes due 2025.

Long bonds from Apple Inc. and Oracle Corp. improved over the day, while the short-dated tranches widened in secondary trading.

Apple’s bonds (Aa1/AA+/) traded 6 bps weaker on the short end and 4 bps tighter on the long end.

Oracle’s senior notes (A1/AA-/A+) traded 4 bps weaker to 3 bps better in the secondary market.

Microsoft Corp.’s 2.7% notes due 2025 headed out flat.

The Markit CDX North American Investment Grade index widened more than 2 bps on Thursday to a spread of 74 bps.

EDC new issue

Export Development Canada priced an upsized $1 billion of floating-rate notes due Aug. 13, 2019 on Thursday at par to yield Libor plus 1 bp, a market source said.

Bookrunners were BofA Merrill Lynch, BMO Capital and Deutsche Bank Securities Inc.

The notes (Aaa/AAA) were sold via Rule 144A and Regulation S.

The government-backed agency for exporters is based in Ottawa.

CBRE upsizes

The session also hosted CBRE Services, which sold an upsized $600 million offering of 4.875% senior notes (Baa3/BBB) due March 1, 2026 at Treasuries plus 275 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.24 to yield 4.968%.

The notes were issued at the tight end of guidance set in the Treasuries plus 280 bps area, which was adjusted from the Treasuries plus high-200 bps area.

The deal was upsized from $350 million.

Bookrunners are J.P. Morgan Securities LLC, BofA Merrill Lynch, HSBC Securities (USA) Inc., Wells Fargo Securities LLC, Credit Suisse Securities (USA) LLC, MUFG, RBS Securities Inc. and Scotia Capital (USA) Inc.

The company will use the net proceeds from the offering for general corporate purposes, including paying a portion of the consideration for the acquisition of Johnson Control, Inc.’s Global WorkPlace Solutions business.

CBRE is a Los Angeles-based commercial real estate services and investment firm.

Airgas new issue

Airgas priced an upsized $400 million of 3.05% five-year senior notes (Baa2/BBB/) at Treasuries plus 148 bps on Thursday, according to a market source.

Pricing was at 99.808 to yield 3.092%.

The notes sold at the tight end of guidance set in the 150 bps area over Treasuries. Initial talk was in the range of 160 bps to 165 bps over Treasuries.

The bookrunners were BofA Merrill Lynch, Goldman Sachs & Co., U.S. Bancorp Investments Inc. and Wells Fargo Securities.

Proceeds will be used for general corporate purposes.

The maker of specialty and industrial gases is based in Radnor, Pa.

PS New Mexico prices tight

Meanwhile, Public Service Co. of New Mexico sold a $250 million offering of 3.85% senior notes (Baa2/BBB) due Aug. 1, 2025 at Treasuries plus 165 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.722 to yield 3.884%.

The notes sold at the tight end of the Treasuries plus 170 bps area guidance, tighter than talk set in the 187.5 bps area over Treasuries.

JPMorgan, MUFG, KeyBanc Capital Markets and RBC Capital Markets LLC are the bookrunners.

Proceeds will be used to repay a $175 million term loan with the Bank of Tokyo-Mitsubishi UFJ, Ltd., to repay outstanding borrowings under a $400 million revolving credit facility, to repay outstanding borrowings under a $50 million unsecured revolver, to repay outstanding borrowings under an intercompany loan agreement with parent company PNM Resources, Inc. and for other utility financing purposes.

Public Service Co. of New Mexico is an Albuquerque-based electric, water and gas utility services company.

Apple mixed

Apple’s 3.2% notes due 2025 widened 6 bps in trading to 110 bps bid, according to a market source.

The company sold $2 billion of the 10-year notes on May 6 at Treasuries plus 100 bps.

Apple’s 4.375% notes due 2045 tightened 4 bps to 143 bps bid over the session.

The company sold $2 billion of the bonds in the May 6 offering at 140 bps over Treasuries.

The computer and mobile communications device company is based in Cupertino, Calif.

Oracle mixed

Oracle’s 2.95% notes due 2025 eased 4 bps to 125 bps bid on Thursday, a market source said.

Oracle sold $2.5 billion of the notes on April 28 at Treasuries plus 100 bps.

The company’s 4.125% bonds due 2045 improved in secondary trading to 154 bps bid, 3 bps better on the day.

Oracle sold $2 billion of the bonds at Treasuries plus 145 bps in the April 28 offering.

The computer software and technology company is based in Redwood City, Calif.

Microsoft stable

Microsoft’s 2.7% notes due 2025 were unchanged on the day at 92 bps bid, a market source said.

Microsoft sold $2.25 billion of the notes (Aaa/AAA/) on Feb. 9 at 75 bps over Treasuries.

The computer software company is based in Redmond, Wash.

Bank/brokerage CDS costs rise

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

Bank of America Corp.’s CDS costs rose 2 bps to 68 bps bid, 71 bps offered. Citigroup Inc.’s CDS costs were 2 bps higher at 78 bps bid, 82 bps offered. JPMorgan Chase & Co.’s CDS costs were up 1 bp at 68 bps bid, 71 bps offered. Wells Fargo & Co.’s CDS costs rose 1 bp to 51 bps bid, 55 bps offered.

Merrill Lynch’s CDS costs were 2 bp higher at 72 bps bid, 75 bps offered. Morgan Stanley’s CDS costs ended 1 bps higher at 78 bps bid, 82 bps offered. Goldman Sachs Group, Inc.’s CDS costs were at 85 bps bid, 89 bps offered.

Paul Deckelman contributed to this review.

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