Record month closes on subdued note; Union Electric, Principal Life price; Apple firms

By Aleesia Forni and Cristal Cody

Virginia Beach, March 31 – The lull in the investment-grade primary continued on Tuesday, with Union Electric Co. and Principal Life Global Funding III the only names pricing new deals during the session.

The issuers raised a combined $1.25 billion of supply, closing out a frenzied month of issuance on a quieter note.

In total, more than $163 billion priced during the month of March, the busiest month on record, according to Prospect News data.

Union Electric, doing business as Ameren Missouri Co., sold a $250 million senior secured note due 2045 on Tuesday, pricing the new issue around 12.5 basis points tight of initial guidance.

The deal attracted around $750 million of orders.

Principal Life’s upsized $500 million offering garnered an order book that was more than two times oversubscribed.

Sources are calling for another muted session on Wednesday to open what is predicted to be a quieter month of April.

Bonds traded mostly better over the session, with bank and financial paper stronger, investment-grade market sources said.

Goldman Sachs Group Inc.’s 3.5% senior notes due 2025 traded about 10 bps tighter on the day.

JPMorgan Chase & Co.’s 3.125% notes due 2025 tightened 7 bps in the secondary market.

Bank of America Corp.’s 4% notes due 2025 firmed 3 bps.

Apple Inc.’s 2.5% notes due 2025 traded 2 bps better.

Coach Inc.’s 4.25% senior notes due 2025 were quoted 2 bps weaker in secondary trading.

The Markit CDX North American Investment Grade series 23 index was unchanged at a spread of 64 bps.

Principal Life upsizes

Principal Life Global priced an upsized $500 million issue of 2.2% five-year funding agreement-backed notes to yield Treasuries plus 85 bps on Tuesday, a market source said.

Pricing was at 99.868 to yield 2.228%.

The notes were sold at the tight end of initial price talk set in the low-90 bps area.

Credit Suisse Securities (USA) LLC and U.S. Bancorp Investments Inc. were the bookrunners for the Rule 144A and Regulation S deal.

The financing unit of Principal Insurance Group is based in Des Moines.

Union Electric secured notes

Also on Tuesday, Union Electric, doing business as Ameren Missouri, sold a $250 million issue (A2/A/) of 3.65% 30-year senior secured notes at Treasuries plus 112.5 bps, according to a market source.

Pricing was at 99.764 to yield 3.663%.

The notes sold at the tight end of guidance.

MUFG, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC were the joint bookrunners.

The notes will be secured by a series of the company’s first mortgage bonds.

Proceeds will be used to repay a portion of the company’s short-term debt.

The public utility holding company and unit of Ameren Corp. is based in St. Louis.

Goldman tightens

Goldman Sachs’ 3.5% notes due 2025 were quoted at 135 bps bid late Tuesday afternoon, better than where the notes traded at 146 bps bid on Monday, according to a market source.

Goldman sold $1.7 billion of the notes (Baa1/A-/A) on Jan. 20 at 170 bps over Treasuries.

The financial services company is based in New York City.

JPMorgan stronger

JPMorgan Chase’s 3.125% notes due 2025 firmed 7 bps in secondary trading to 118 bps bid, a source said.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at Treasuries plus 145 bps.

The financial services company is based in New York City.

Bank of America improves

Bank of America’s 4% notes due 2025 tightened 3 bps to 195 bps bid during the session, a market source said.

The company sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 16 at Treasuries plus 225 bps.

The financial services company is based in Charlotte, N.C.

Apple firms

Apple’s 2.5% notes due 2025 firmed 2 bps to 84 bps bid, according to a market source.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at Treasuries plus 85 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

Coach soft

In other secondary trading, Coach’s 4.25% notes due 2025 eased 2 bps to 215 bps bid on Tuesday, a source said.

Coach sold $600 million of the notes (Baa2/BBB-/BBB) on Feb. 23 at Treasuries plus 225 bps.

The luxury leather goods company is based in New York.

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