High-grade supply heavy; Visa, Bank of Montreal, Anglo American price; deal pipeline fills

By Cristal Cody

Tupelo, Miss., Sept. 6 – High-grade issuance stayed strong for a second straight session on Wednesday.

Issuers including Visa Inc., Bank of Montreal, Woodside Finance Ltd., Northern States Power Co., PPL Capital Funding Inc., National Retail Properties, Inc., Caterpillar Financial Services Corp. and Arizona Public Service Co. priced bonds.

In addition, Anglo American plc sold $1.3 billion of notes (Baa3/BBB-/BBB-) in the company’s first offering as a high-grade rated issuer.

In other investment-grade issuance on Wednesday, the Carlyle Group priced $400 million of series A perpetual preferred units.

On Tuesday, more than $22 billion of high-grade bonds were sold.

The deal pipeline also is building.

Discovery Communications, LLC (Baa3/BBB-/BBB-) continued a second day of fixed income investor calls on Wednesday for an offering of new dollar-denominated and possible sterling-denominated notes.

Syngenta AG (Ba2/BBB-/BBB) plans to hold a roadshow in the week ahead for a multi-tranche benchmark-sized dollar-denominated Rule 144A and Regulation S offering of senior notes.

Also, Australian property company Goodman Group (Baa1/BBB+/) intends to hold roadshows beginning on Monday for a multi-tranche dollar- and euro-denominated notes offering.

The Markit CDX North American Investment Grade index ended less than 1 basis point tighter at a spread of 59 bps.

Visa prices $2.5 billion

Visa sold $2.5 billion of senior notes (A1/A+/) in three tranches on the tight side of price talk on Wednesday, according to a market source.

The company priced $1 billion of 2.15% notes due Sept. 15, 2022 at a spread of Treasuries plus 53 bps.

Visa sold $750 million of 2.75% 10-year notes with a Treasuries plus 73 bps spread.

The company pried $750 million of 3.65% 30-year notes at a spread of 95 bps over Treasuries.

Barclays, BofA Merrill Lynch, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, including the repayment or redemption of $1.75 billion of 1.2% notes due Dec. 14, 2017.

San Francisco-based Visa operates a retail electronic payments network.

Bank of Montreal prices

Bank of Montreal priced $2.5 billion of senior medium-term notes (A1/A+/AA-) in four tranches on Wednesday, according to a market source.

The bank sold $400 million of two-year floating-rate notes at Libor plus 25 bps.

Bank of Montreal priced $625 million of 1.75% two-year fixed-rate notes at a spread of Treasuries plus 48 bps.

The $375 million tranche of five-year floaters priced at Libor plus 63 bps.

Bank of Montreal sold $1.1 billion of 2.35% five-year fixed-rate notes at a Treasuries plus 70 bps spread.

BofA Merrill Lynch, BMO Capital Markets Corp., BNP Paribas Securities Corp., Citigroup Global Markets Inc. and J.P. Morgan Securities were the bookrunners.

The financial services company is based in Toronto.

Anglo American in primary

Anglo American priced $1.3 billion of notes in two tranches on Wednesday, according to market sources.

The company sold $650 million of 3.625% notes due Sept. 11, 2024 on top of price talk at a spread of Treasuries plus 170 bps.

Anglo American priced $650 million of 4% notes due Sept. 11, 2027 at a spread of Treasuries plus 190 bps, in line with guidance.

Barclays, BNP Paribas Securities Corp., Mizuho Securities USA LLC and RBC Capital Markets, LLC were the bookrunners.

The company was upgraded to investment grade in August by S&P Global Ratings and Fitch Ratings and at the start of September by Moody’s Investors Service.

Anglo American is a London-based mining company.

Woodside Finance prints

Woodside Finance priced $800 million of 3.7% notes due March 14, 2028 (Baa1/BBB+/) at a spread of 160 bps over Treasuries on Wednesday, according to a market source.

The notes priced on the tight side of talk in the 165 bps area.

BoA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities and UBS Securities LLC were the lead managers.

Woodside Finance is a Perth, Australia-based financing company and subsidiary of Woodside Petroleum Ltd.

Northern States Power prices

Northern States Power sold $600 million of 3.6% first mortgage bonds due Sept. 15, 2047 (A3/A/A+) on Wednesday at 99.003 to yield 3.655% and a spread of Treasuries plus 93 bps, according to an FWP filing with the Securities and Exchange Commission.

Barclays, BNY Mellon Capital Markets LLC, BofA Merrill Lynch and PNC Capital Markets LLC were the bookrunners.

Proceeds will be used to repay short-term debt, to redeem $500 million of 5.25% first mortgage bonds on Sept. 29 and for general corporate purposes.

The electric and natural gas utility is based in Minneapolis.

PPL Capital sells $500 million

PPL Capital Funding priced $500 million of 4% 30-year senior notes (Baa2/A-/) on Wednesday at 98.792 to yield 4.07% and a spread of Treasuries plus 135 bps, according to an FWP filing with the SEC.

Goldman Sachs & Co., J.P. Morgan Securities, BofA Merrill Lynch and Scotia Capital (USA) Inc. were the bookrunners.

The notes will be guaranteed by PPL Corp.

Proceeds will be used to repay short-term debt, including commercial paper borrowings, and for general corporate purposes.

The energy and utility holding company is based in Allentown, Pa.

National Retail prices notes

National Retail Properties priced $400 million of 3.5% 10-year notes (Baa1/BBB+/BBB+) on Wednesday at 99.593 to yield 3.548% and a spread of Treasuries plus 145 bps, according to an FWP filed with the SEC.

Citigroup Global Markets, BofA Merrill Lynch, Wells Fargo Securities LLC, Jefferies & Co., RBC Capital Markets, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments were the bookrunners.

Proceeds will be used to repay debt under a credit facility, for future property acquisitions and for general corporate purposes.

National Retail Properties is an Orlando-based real estate investment trust.

Carlyle Group prices $400 million

The Carlyle Group priced $400 million, or 16 million units, of series A perpetual preferred units on Wednesday at $25.00 per unit with a 5.875% dividend, according to an FWP filing with the Securities and Exchange Commission.

The preferreds priced tighter than talk in the 6% area.

Morgan Stanley & Co., LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo Securities, LLC and J.P. Morgan Securities LLC were the bookrunners.

The company plans to apply to list the preferred units on the Nasdaq under the symbol “TCGP.”

The Carlyle Group is a Washington, D.C.-based investment firm.

Caterpillar Financial sells floaters

Caterpillar Financial Services priced $300 million of floating-rate series I medium-term notes due Sept. 11, 2018 at par to yield Libor plus 8 bps on Wednesday, according to an FWP filing with the SEC.

Citigroup Global Markets was the bookrunner.

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

Arizona Public Service prices

Arizona Public Service sold $300 million of 2.95% 10-year notes (A2/A-/A) at a spread of 85 bps over Treasuries on Wednesday, according to an FWP filing with the SEC.

The notes priced at 99.931 to yield 2.958%.

Citigroup Global Markets, J.P. Morgan Securities, MUFG and Scotia Capital were the bookrunners.

Proceeds will be used to repay short-term debt consisting of commercial paper borrowings and to replenish cash.

Arizona Public Service is an electric utility based in Phoenix and a subsidiary of Pinnacle West Capital Corp.

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