MUFG to start roadshow Monday for note offering; Time Warner, Visa, Home Depot, AT&T tighten

By Aleesia Forni and Cristal Cody

New York, Feb. 10 – Mitsubishi UFJ Financial Group, Inc. announced new deal plans and Senior Housing Properties Trust sold an upsized issue of preferred stock on Wednesday as Federal Reserve chair Janet Yellen gave testimony to Congress, easing some concerns about the future of interest rates.

Yellen stated that financial conditions have become “less supportive of growth” and noted that if these developments persist, it could weigh on the outlook for economic activity.

Meantime, volatility continued to keep a lid on issuance for the most part.

MUFG said it will begin a roadshow next week ahead of plans to enter the primary market with a two-part issue of senior notes in fixed- and floating-rate tranches.

And the preferred market saw Senior Housing Properties Trust issue an upsized $250 million of $25-par notes due 2046. The deal’s size was increased from $100 million and sold at the tight end of talk.

In light of what one source called “extremely unstable” market conditions, the remainder of the week’s primary activity is likely to remain subdued.

The Canadian primary market remains mostly quiet with one corporate deal brought to date in February, a source said on Wednesday.

“I expect it to remain volatile, and that makes it difficult for issuers to come into the market,” the source said. “Financials right now are not all that welcome. Energy, of course, is not all that welcome. That’s about half of the market. Everything else is widening in sympathy.”

U.S. investment-grade bonds traded mostly stronger over the day.

Time Warner Inc.’s 3.875% notes due 2026 firmed 3 basis points during the trading session. The company reported fourth-quarter earnings of $1.06 per share, up from 98 cents per share in the year-ago period, but revenue declined 6% to $7.1 billion.

Visa Inc.’s senior notes (A1/A+) traded 2 bps to 3 bps better on Wednesday.

Home Depot Inc.’s senior notes (A2/A/A) recovered some of Tuesday’s losses and traded about 1 bp to 6 bps tighter.

AT&T Inc.’s notes (Baa1/BBB+/A-) gained ground over the day and firmed about 6 bps to 10 bps.

The Markit CDX North American Investment Grade index ended the day 1 bp weaker at a spread of 121 bps.

MUFG preps deal

MUFG plans to begin a series of investor meetings on Monday ahead of a planned two-part issue of senior notes, according to a market source and a 424B5 filed with the Securities and Exchange Commission.

The sale will include fixed-rate notes and a floating-rate tranche.

The bookrunners are Morgan Stanley & Co. LLC, MUFG and J.P. Morgan Securities LLC.

Proceeds will be used to fund the operations of Bank of Tokyo-Mitsubishi UFJ through loans.

The financial services is based in Tokyo.

Senior Housing new issue

Senior Housing Properties Trust priced $250 million of 6.25% $25-par senior notes due Feb. 1, 2046 (expected ratings: Baa3/BBB-) at par on Wednesday, a market source reported.

Price talk was 6.25% to 6.375%. The deal was upsized from $100 million.

BofA Merrill Lynch, Morgan Stanley, UBS Securities LLC, Wells Fargo Securities LLC, Citigroup Global Markets Inc. and RBC Capital Markets LLC are the joint bookrunners. Jefferies & Co. is joint lead manager.

Interest is payable on a quarterly basis. The notes are redeemable on or after Jan. 21, 2021 at par plus accrued interest, according to the source.

The new securities will be listed on the New York Stock Exchange.

Proceeds will be used to repay revolver borrowings and for general business purposes.

Senior Housing is a Newton, Mass.-based real estate investment trust.

Time Warner firms

Time Warner’s 3.875% notes due 2026 firmed 3 bps to 212 bps bid on Wednesday, a market source said.

Time Warner sold $600 million of the notes (Baa2/BBB/ BBB+) on Nov. 17 at a spread of Treasuries plus 162.5 bps.

The media company is based in New York.

Visa improves

Visa’s 3.15% notes due 2025 firmed 3 bps over the day to 113 bps bid, according to a market source.

The company sold $4 billion of the bonds on Dec. 9 at Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

Home Depot better

Home Depot’s 3% notes due April 1, 2026 tightened about 6 bps on Wednesday to 108 bps bid, a market source said.

The company sold $1.3 billion of 3% notes due April 1, 2026 on Feb. 3 at a spread of 120 bps over Treasuries.

Home Depot’s 4.25% notes due 2046 firmed 1 bp to 146 bps bid.

The bonds priced in a $350 million tranche in the Feb. 3 offering at Treasuries plus 150 bps.

Home Depot is an Atlanta-based home improvement retailer.

AT&T gains

AT&T’s 4.125% notes due 2026 traded about 10 bps tighter to 218 bps bid in the secondary market, a source said.

The company sold $1.75 billion of the notes (Baa1/BBB+/A-) on Jan. 29 at Treasuries plus 220 bps.

AT&T’s 5.65% bonds due 2047 firmed 6 bps to 296 bps bid on Wednesday.

The company sold $1.5 billion of the bonds in the Jan. 29 offering at Treasuries plus 290 bps.

AT&T is a Dallas-based telecommunications company.

Stephanie N. Rotondo contributed to this review

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