Supply heavy; Kellogg, ConEd, Paccar, Clorox, Amcor price; General Dynamics eyes deal

By Cristal Cody

Tupelo, Miss., May 7 – High-grade issuers kicked the week with more than $5 billion of new bond issuance on Monday.

Kellogg Co., Consolidated Edison Co. of New York, Inc., Enable Midstream Partners LP, Paccar Financial Corp., Clorox Co., Amcor Finance (USA), Inc., Penske Truck Leasing Co., LP and co-issuer PTL Finance Corp. and Mid-America Apartments, LP priced notes during the session.

In addition, slit-rated issuer Gaming and Leisure Properties, Inc. sold $1 billion of notes in two tranches and Bank of America Corp. priced $1.2 billion of $25-par preferreds.

Coming up on Tuesday, General Dynamics Corp. is expected to tap the primary market with a seven-tranche offering of notes.

About $30 billion to $35 billion of deal volume is forecast by syndicate sources for the week.

Supply may climb to as much as $50 billion for the week, a source said.

The Markit CDX North American Investment Grade 30 index closed modestly softer at a spread of 62 basis points.

Kellogg prices $1 billion

Kellogg sold $1 billion of senior notes (Baa2/BBB/) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.

The $400 million of 3.25% three-year notes priced at 99.912 to yield 3.281%, or a spread of Treasuries plus 65 bps.

Kellogg sold the $600 million of 4.3% 10-year notes at a Treasuries plus 140 bps spread. The notes priced at 99.646 to yield 4.344%.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

The Battle Creek, Mich.-based company manufactures cereal and convenience foods.

ConEd sells two tranches

Consolidated Edison Co. priced a $1 billion two-tranche offering of debentures (A2/A-/A-) on Monday, according to FWP filings with the SEC.

The company sold $300 million of 3.80% 10-year bonds at 99.983 to yield 3.802%, or a spread of 85 bps over Treasuries.

In the second tranche, Consolidated Edison priced $700 million of 4.5% 40-year debentures at 99.539 to yield 4.525%. The bonds priced with a Treasuries plus 140 bps spread.

Barclays, BofA Merrill Lynch, Wells Fargo Securities, BNY Mellon Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

The electric utility is a subsidiary of New York City-based Consolidated Edison, Inc.

Enable Midstream prints

Enable Midstream Partners sold $800 million of 4.95% 10-year senior notes on Monday at 99.197 and a spread of 210 bps over Treasuries, according to a market source and a news release.

The notes (Baa3/BBB-/BBB-) priced on the tight side of guidance that was set in the Treasuries plus 215 bps area.

BofA Merrill Lynch, Mizuho Securities USA Inc. and Wells Fargo Securities were the bookrunners.

Enable is a Houston-based owner and operator of oil and gas infrastructure for gathering, processing, transportation and storage.

Paccar brings two tranches

Paccar Financial sold $550 million of medium-term notes in two tranches on Monday, according to a market source.

The $250 million of three-year floating-rate notes priced at Libor plus 26 bps.

Paccar Financial also priced $300 million 3.1% three-year fixed-rate notes at a spread of 48 bps over Treasuries.

BofA Merrill Lynch, BNP Paribas Securities Corp., MUFG and U.S. Bancorp Investments were the lead managers.

Paccar Financial is a financing arm of Bellevue, Wash.-based Paccar Inc.

Clorox prices $500 million

Clorox sold $500 million of 3.9% 10-year senior notes on Monday at a spread of 97 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 99.819 to yield 3.922%.

Citigroup Global Markets, Goldman Sachs & Co., J.P. Morgan Securities and RBC Capital Markets, LLC were the bookrunners.

The manufacturer and marketer of consumer and professional products is based in Oakland, Calif.

Amcor raises $500 million

Amcor Finance (USA) priced $500 million of 4.5% 10-year senior notes (Baa2/BBB) at a spread of Treasuries plus 158 bps on Monday, according to a market source.

The notes priced on the tight side of guidance that was set in the Treasuries plus 160 bps area.

Citigroup Global Markets and J.P. Morgan Securities were the bookrunners.

The company held fixed-income investor calls on Thursday and Friday.

Buena Park, Calif.-based Amcor Finance is a subsidiary of Melbourne, Australia-based packaging products company Amcor Ltd.

Penske in primary

Penske priced $450 million of 3.9% senior notes due Feb. 1, 2024 (Baa2/BBB/BBB+) on Monday at a spread of 115 bps over Treasuries, according to a market source.

The notes priced on the tight side of guidance for a spread in the Treasuries plus 120 bps area.

BofA Merrill Lynch, J.P. Morgan Securities, PNC Capital Markets LLC and Wells Fargo Securities were the bookrunners.

The transportation services provider is based in Reading, Pa.

Mid-America Apartments prices

Mid-America Apartments (Baa1/BBB+/BBB+) sold $400 million of 4.2% 10-year senior notes on Monday at a spread of 132 bps over Treasuries, according to an FWP filed with the SEC.

The notes priced at 99.403 to yield 4.273%.

Wells Fargo Securities, Citigroup Global Markets Inc., J.P. Morgan Securities, U.S. Bancorp Investments and SunTrust Robinson Humphrey Inc. were the bookrunners.

Mid-America Apartments held fixed-income investor calls on Friday.

Mid-America Apartments is a Memphis-based real estate investment trust.

General Dynamics in pipeline

General Dynamics (A2/A+/A) plans to price seven tranches of notes on Tuesday, according to a market source and a 424B5 filing with the SEC.

The company held fixed-income investor calls on Monday.

The notes will be sold in floating-rate tranches due in 2020 and 2021 and fixed-rate tranches due in 2020, 2021, 2023, 2025 and 2028.

BofA Merrill Lynch, RBC Capital Markets and Wells Fargo Securities are the bookrunners.

General Dynamics completed its acquisition of government IT business CSRA Inc. in April in a transaction valued at $9.7 billion, including the assumption of $2.8 billion in CSRA debt.

Proceeds will be used to repay about $7.5 billion of borrowings under the company’s 364-day 2.375% credit facility due March 15, 2019, which was incurred to finance a portion of the purchase price for the CSRA acquisition.

General Dynamics is a Falls Church, Va.-based global aerospace and defense company.

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