Sempra Energy, Realty Income, ERP price; credit spreads ease; Xylem firms; GM mostly flat

By Cristal Cody

Eureka Springs, Ark., Oct. 4 – Sempra Energy, Realty Income Corp. and ERP Operating LP tapped the investment-grade market on Tuesday.

Sempra Energy priced $500 million of three-year senior notes.

Realty Income sold $600 million of long 10-year senior notes.

ERP Operating raised $500 million in an offering of 10-year notes.

Also on Tuesday, Fannie Mae announced plans to price five-year Benchmark Notes.

The Markit CDX North American Investment Grade index closed about 1 basis point softer at a spread of 76 bps.

In the secondary market, Xylem Inc.’s new senior notes (Baa2/BBB/) priced on Monday traded about 4 bps to 12 bps tighter.

General Motors Financial Co. Inc.’s 4% senior notes due 2026 sold during Monday’s session traded flat to 1 bp better in the secondary market.

Realty Income prices

Realty Income sold $600 million of 3% senior notes due Jan. 15, 2027 at 98.671 to yield 3.153%, according to an FWP filing on Tuesday with the Securities and Exchange Commission.

The notes (Baa1/BBB+/BBB+) priced with a spread of 147 bps over Treasuries.

The bookrunners were Citigroup Global Markets Inc., Barclays, BNY Mellon Capital Markets LLC, Goldman Sachs & Co., U.S. Bancorp Investments Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, LLC, Morgan Stanley & Co. LLC, RBC Capital Markets LLC, Regions Securities LLC and Wells Fargo Securities LLC.

Proceeds will be used to repay a portion of borrowings outstanding under a $2 billion credit facility, to fund potential investment opportunities and for other general corporate purposes.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

Sempra Energy sells notes

Sempra Energy priced $500 million of 1.625% three-year senior notes with a spread of 72 bps over Treasuries on Tuesday, according to an FWP filing on Tuesday with the SEC.

The notes priced at 99.898 to yield 1.66%.

Goldman Sachs, BofA Merrill Lynch and Mizuho Securities USA Inc. were the bookrunners.

Proceeds will be used to repay commercial paper.

The holding company for utility subsidiaries is based in San Diego.

ERP brings $500 million

ERP Operating sold $500 million of 2.85% notes due Nov. 1, 2026 at 99.341 to yield 2.926%, according to an FWP filing on Tuesday with the SEC.

The notes (Baa1/A-/A-) priced with a spread of 125 bps over Treasuries.

Barclays, Deutsche Bank Securities Inc., RBC and UBS Securities LLC were the bookrunners.

Proceeds will be used for working capital and general company purposes.

The unit of apartment property builder and manager Equity Residential is based in Chicago.

Fannie Mae to price notes

Fannie Mae announced plans to price new issue five-year Benchmark Notes.

Goldman Sachs, JPMorgan and TD Securities (USA) LLC are the lead managers.

The co-managers include CastleOak Securities, LP, Loop Capital Markets LLC, Mischler Financial Group, Inc. and Siebert Cisneros Shank & Co., LLC.

The deal is expected to settle on Friday.

Fannie Mae is a mortgage credit provider based in Washington, D.C.

Xylem tightens

Xylem’s 3.25% notes due 2026 traded better early Tuesday at 153 bps offered in the secondary market, a source said.

The company sold $500 million of the 10-year notes on Monday at a spread of 165 bps over Treasuries.

Xylem’s 4.375% notes due 2046 were seen at 206 bps offered.

The notes priced in a $400 million tranche in Monday’s sale at Treasuries plus 210 bps.

The water technology company is based in White Plains, N.Y.

GM Financial mostly flat

General Motors Financial’s 4% notes due 2026 were quoted at 239 bps offered in secondary trading earlier on Tuesday, according to a market source.

General Motors Financial (Ba1/BBB-/BBB-) priced $750 million of the 10-year notes on Monday at Treasuries plus 240 bps.

The notes are guaranteed by operating subsidiary AmeriCredit Financial Services, Inc.

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

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