Capital One sells $2.5 billion bonds; Texas Instruments, SL Green price; supply strong

By Cristal Cody

Tupelo, Miss., Oct. 26 – Capital One Financial Corp. led deal action in the high-grade bond market on Thursday with a $2.5 billion three-part offering of senior notes.

Also in the primary market, Texas Instruments Inc. sold $500 million of 10-year notes.

In addition, SL Green Realty Corp., SL Green Operating Partnership, LP and Reckson Operating Partnership, LP reopened their 4.5% senior notes due Dec. 1, 2022 on Thursday in a $100 million add-on to the issue.

More than $28 billion of investment-grade bonds have priced over the week, surpassing market expectations of about $20 billion of supply, a source said.

The Markit CDX North American Investment Grade 29 index closed the day mostly unchanged at a spread of 54 basis points.

Capital One taps market

Capital One Financial priced $2.5 billion senior notes (Baa1/BBB/A-) in three tranches on Thursday, according to a market source.

Capital One sold $400 million of three-year floating-rate notes at Libor plus 45 bps and $600 million of 2.4% three-year fixed-rate notes at a spread of Treasuries plus 68 bps.

Capital One priced $1.5 billion of 3.3% seven-year notes at a Treasuries plus 105 bps spread.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Capital One Securities were the bookrunners.

Proceeds will be used for general corporate purposes, including debt repayment, redemptions and repurchases of common stock or other securities, acquisitions, working capital, capital expenditures and investments in subsidiaries.

Capital One is a McLean, Va.-based financial services company.

Texas Instruments prices

Texas Instruments priced $500 million of 2.9% 10-year notes on Thursday at 98.843 to yield 3.035%, according to an FWP filing with the Securities and Exchange Commission.

The notes (A1/A+) priced with a spread of 58 bps over Treasuries.

Barclays, JPMorgan, BofA Merrill Lynch, Citigroup Global Markets Inc., Mizuho Securities USA Inc., Morgan Stanley and MUFG were the bookrunners.

Proceeds will be used for general corporate purposes.

Texas Instruments is a Dallas-based semiconductor designer and manufacturer.

SL Green reopens notes

SL Green Realty, SL Green Operating Partnership and Reckson Operating Partnership priced a $100 million add-on to their 4.5% senior notes due Dec. 1, 2022 on Thursday at 105.334 to yield 3.298%, according to a market source and an FWP filing with the SEC.

The notes (Baa3/BBB-/BBB-) priced with a spread of Treasuries plus 123 bps, tighter than initial talk in the Treasuries plus 135 bps area.

Wells Fargo Securities LLC, Citigroup and BofA Merrill Lynch were the bookrunners.

The company originally sold $200 million of the notes on Nov. 9, 2012 at par.

The total outstanding now is $300 million.

Proceeds will be used for general corporate purposes, including debt repayment and repaying borrowings under the company’s credit facility.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

Funds continue rebound

Investment-grade corporate funds posted their sixth consecutive weekly gain for the week ended Wednesday, according to sources familiar with the fund-flow statistics generated by AMG Data Services Inc.

The run of inflows followed the rare occurrence of two straight weekly losses.

The calculations by the Arcata, Calif.-based unit of Thomson Reuters Corp.’s Lipper analytics division indicated that the funds saw a net inflow of $3.26 billion during the reporting week ended Wednesday, on the heels of a $3.39 billion upturn seen last week.

The inflows seen over the past six weeks had followed net outflows of $25 million during week ended Sept. 13 and $43 million during the week ended Sept. 6, which had been the first loss of the year after 35 straight net inflows this year before that and 37 inflows overall dating back to the week ended Dec. 21, 2016, according to a Prospect News analysis of the data.

This week’s inflow raised the year-to-date net inflow figure to $104.12 billion from last week’s $100.86 billion, establishing a fifth consecutive new 2017 cumulative peak level.

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