Heineken prices $1.75 billion; Caterpillar, MassMutual tap primary market; Verizon softens

By Cristal Cody

Tupelo, Miss., March 20 – A handful of corporate issuers tapped the investment-grade bond market on Monday with deals, including one issuer that upsized its offering.

Heineken NV came to the primary market with a $1.75 billion two-part offering of notes.

Caterpillar Financial Services Corp. brought $900 million of two-year medium-term notes in fixed- and floating-rate tranches.

Massachusetts Mutual Life Insurance Co. upsized its offering of 60-year surplus notes on Monday to $475 million.

About $20 billion to $25 billion of investment-grade bond volume is expected by market participants over the week.

The Markit CDX North American Investment Grade index rolled to a new series on Monday and closed 7 basis points wider at a spread of 68 bps.

The three-month Libor yield set the highest yield since April 2009 on Monday at 1.1562%, according to a market source.

In the secondary market, Verizon Communications Inc.’s 4.125% notes due March 16, 2027 priced a week ago softened over the day but remain better than issuance.

Heineken sells notes

Heineken priced $1.75 billion of notes (Baa1/BBB+/) in two tranches on the tight side of talk on Monday, a market source said.

The company placed $1.1 billion of 3.5% notes due Jan. 29, 2028 at a spread of Treasuries plus 110 bps. Talk was in the areas of Treasuries plus 115 bps, plus or minus 5 bps.

Heineken sold $650 million of 4.35% notes due March 29, 2047 at a Treasuries plus 130 bps spread. Guidance on the 30-year notes was in the Treasuries plus 135 bps area, plus or minus 5 bps.

Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were the lead managers.

Heineken is a Dutch brewery based in Amsterdam.

Caterpillar prices

Caterpillar Financial Services (A3/A/) priced $900 million of series H two-year medium-term notes in fixed- and floating-rate tranches on Monday, according to FWP filings with the Securities and Exchange Commission.

The company sold $250 million of the floaters at par to yield Libor plus 28 bps.

Caterpillar Financial Services priced $650 million of the 1.9% fixed-rate notes due March 22, 2019 at 99.94 to yield 1.931% and a spread of Treasuries plus 63 bps.

Barclays, J.P. Morgan Securities and Societe Generale were the bookrunners.

Nashville, Tenn.-based Caterpillar Financial Services is a financing arm of Caterpillar Inc.

MassMutual upsizes

Massachusetts Mutual Life Insurance priced an upsized $475 million of 4.9% 60-year surplus notes on Monday at a spread of 185 bps plus Treasuries, according to a market source.

The notes due April 1, 2077 (A1/AA-/) priced on the tight side of guidance in the Treasuries plus 190 bps area, plus or minus 5 bps.

The deal was upsized from $400 million.

BofA Merrill Lynch, Citigroup Global Markets and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds are expected to be used for general corporate purposes, including to repurchase outstanding surplus notes.

Massachusetts Mutual Life Insurance is a Springfield, Mass.-based provider of insurance, retirement and financial products and services.

Verizon softens

Verizon Communications’ 4.125% notes due March 16, 2027 settled down to 102.16 on Monday after trading as high as 102.59 earlier in the day, according to a market source.

The notes ended secondary trading on Friday at 100.86.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at 99.256 and a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

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