Investment-grade supply heavy; Pfizer, John Deere, MUFG, TD Bank, utilities among issuers

By Cristal Cody

Tupelo, Miss., March 4 – High-grade issuers flooded the primary market on Monday, led by Pfizer Inc.’s $5 billion five-part offering of senior notes.

John Deere Capital Corp. priced $1.5 billion of senior medium-term notes in three tranches.

MUFG Union Bank, NA brought $1.3 billion of senior notes in two parts to the market.

Toronto-Dominion Bank priced $1.25 billion of five-year senior medium-term notes.

Duke Energy Progress Inc. sold $600 million of 10-year green first mortgage bonds.

Leggett & Platt, Inc. priced $500 million of 10-year senior notes after the company held fixed income investor calls on Friday.

Union Electric Co. placed $450 million of 10-year first mortgage bonds during the session.

Appalachian Power Co. sold $400 million of 30-year senior notes on Monday.

WEC Energy Group, Inc. also priced $350 million of three-year senior notes.

About $25 billion to $30 billion of issuance is forecast by market sources this week.

Investment-grade issuers priced more than $24 billion of bonds last week.

Volume this month is expected to total in the $100 billion to $120 billion area, according to market sources.

March typically is one of the busiest supply months of the year and has accounted for 11% of annual supply on average since 2010, according to a BofA Merrill Lynch research note released on Monday.

The Markit CDX North American Investment Grade 31 index softened about 1 basis point to end at a spread of 60 bps.

Pfizer prices $5 billion

Pfizer sold $5 billion of senior notes (A1/AA/A+) in five tranches on Monday on the tight side of guidance, according to a market source.

Pfizer priced $500 million of 2.8% three-year notes at a spread of Treasuries plus 28 basis points.

A $750 million tranche of 2.95% five-year notes priced at a spread of 43 bps over Treasuries.

Pfizer placed $1.75 billion of 3.45% 10-year notes at a Treasuries plus 75 bps spread.

The company sold $750 million of 3.9% 20-year notes at a 90 bps spread plus Treasuries.

Finally, Pfizer priced $1.25 billion of 4% 30-year notes at a spread of 100 bps over Treasuries.

Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC were the bookrunners.

The biopharmaceutical company is based in New York.

John Deere sells notes

John Deere Capital priced $1.5 billion of senior medium-term notes (A2/A/A) in three parts on Monday, according to FWP filings with the Securities and Exchange Commission.

The company sold $250 million of three-year floating-rate notes at par to yield Libor plus 38 bps.

A $650 million tranche of 2.95% notes due April 1, 2022 priced at 99.952 to yield 2.966% and a spread of 45 bps over Treasuries.

The company priced $600 million of 3.45% 10-year notes at 99.69 to yield 3.487%, or a Treasuries plus 77 bps spread.

Deutsche Bank Securities, HSBC Securities (USA) Inc., BofA Merrill Lynch and RBC Capital Markets, LLC were the bookrunners.

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

MUFG Bank paper

MUFG Union Bank priced $1.3 billion of senior notes (A2/A/) in two parts on Monday, according to a market source.

A $300 million tranche of floating-rate notes due March 7, 2022 priced at Libor plus 60 bps.

MUFG Union Bank sold $1 billion of 3.15% notes due April 1, 2022 at a spread of 67 bps over Treasuries.

BofA Merrill Lynch, MUFG and Morgan Stanley & Co. LLC were the bookrunners.

The subsidiary of Mitsubishi UFJ Financial Group, Inc. is based in New York.

TD Bank prices

Toronto-Dominion Bank priced $1.25 billion of 3.25% five-year senior medium-term notes on Monday at a spread of 75 bps over Treasuries, according to a market source.

TD Securities (USA) LLC, BofA Merrill Lynch, Goldman Sachs, J.P. Morgan Securities and Wells Fargo Securities LLC were the bookrunners on the bail-inable notes.

The bank and financial services company is based in Toronto.

Duke sells green bonds

Duke Energy Progress priced $600 million of 3.45% 10-year green first mortgage bonds (Aa3/A/) on Monday at 99.588 to yield 3.499%, according to an FWP filing with the SEC.

The company priced the bonds at a spread of Treasuries plus 78 bps.

Barclays, J.P. Morgan Securities, Mizuho Securities USA Inc. and Wells Fargo Securities were the bookrunners.

Raleigh, N.C.-based Duke Energy Progress generates and distributes electricity in North Carolina and South Carolina.

Leggett & Platt prices

Leggett & Platt (Baa1/BBB/) priced $500 million of 4.4% 10-year senior notes at a spread of Treasuries plus 175 bps on Monday, according to an FWP filing with the SEC.

The notes priced at 99.391 to yield 4.476%.

J.P. Morgan Securities, MUFG, U.S. Bancorp Investments Inc. and Wells Fargo Securities were the bookrunners.

The company held fixed income investor calls on Friday.

Leggett & Platt is a Carthage, Mo.-based producer of residential furnishings, commercial components and industrial materials.

Union Electric sells bonds

Union Electric placed $450 million of 3.5% 10-year first mortgage bonds at 99.915 to yield 3.51% on Monday, according to an FWP filing with the SEC.

The bonds (A2/A/) priced with a spread of 78 bps over Treasuries.

Barclays, MUFG, RBC Capital Markets, TD Securities (USA) LLC and BNY Mellon Capital Markets LLC were the bookrunners.

Union Electric, doing business as Ameren Missouri, is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

Appalachian Power prints

Appalachian Power sold $400 million of 4.5% 30-year senior notes on Monday at a spread of 145 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa1/A-/) priced at 99.316 to yield 4.542%.

BNP Paribas Securities Corp., J.P. Morgan Securities, MUFG and SMBC Nikko Securities America Inc. were the bookrunners.

Appalachian Power is a Columbus, Ohio-based electric utility.

WEC Energy brings issue

WEC Energy Group priced $350 million of 3.1% three-year senior notes (Baa1/BBB+/BBB+) on Monday at a spread of 60 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.937 to yield 3.122%.

Barclays and J.P. Morgan Securities were the bookrunners.

The electricity and natural gas service provider is based in Milwaukee.

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