AerCap prices $1 billion notes; Smithfield taps primary; RenaissanceRe, Vodafone market deals

By Cristal Cody

Tupelo, Miss., March 27 – Deal volume slowed on Wednesday with $1.4 billion of bonds priced in the high-grade primary market.

AerCap Ireland Capital DAC and AerCap Global Aviation Trust sold $1 billion of guaranteed senior notes in new and reopened tranches.

Smithfield Foods, Inc. priced $400 million of 10-year split-rated senior notes.

In other market activity during the session, RenaissanceRe Holdings Ltd. held fixed-income investor calls for an offering of 10-year senior notes.

A deal also is expected soon from Vodafone Group plc, which held fixed-income investor calls for a dollar-denominated offering of 60-year notes.

High-grade issuers have sold more than $12 billion of bonds week to date. Supply so far has been led by Mars Inc.’s $5 billion eight-part offering of senior notes that priced on Tuesday.

About $20 billion of investment-grade issuance was expected by syndicate sources for the week.

The Markit CDX North American Investment Grade 32 index was mostly unchanged on the day at a spread of 68 basis points.

In the secondary market, Mars’ notes tightened about 3 bps to 8 bps across the eight-part deal, a source said.

The company’s $700 million tranche of 3.2% notes due April 1, 2030, priced with a Treasuries plus 82 bps spread, firmed about 4 bps.

Meanwhile, based on daily fund and ETF inflows, “March is on track to set a new monthly record,” according to a BofA Merrill Lynch research note released on Wednesday.

“Moreover, flows could accelerate even further into April,” the note said.

The previous record inflow was $38.4 billion in January of 2018.

So far in March, inflows to U.S. high-grade funds and ETFs have averaged $846 million per day and are exceeding the $800 million daily average seen during the record month in 2018, the note said.

“Flows follow returns and the drop in interest rates since Monday of last week should encourage potentially even stronger inflows in April,” the report said.

AerCap prices $1 billion

AerCap Ireland Capital and AerCap Global Aviation Trust priced $1 billion of guaranteed senior notes (Baa3/BBB-/BBB-) in a new issue and a reopening on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $500 million of reopened 4.875% senior notes due Jan. 16, 2024 at 103.866 to yield 3.965%, or a spread of 180 bps over Treasuries.

AerCap originally sold $400 million of the notes on Jan. 9 at 99.833 to yield 4.913%, or a Treasuries plus 235 bps spread. The total outstanding is now $900 million.

A $500 million new issue tranche of 4.45% seven-year notes were sold at 99.869 to yield 4.472%. The price spread was 220 bps over Treasuries.

Both tranches priced on top of guidance.

The bookrunners were Goldman Sachs & Co. LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC, Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., MUFG, RBC Capital Markets LLC, Santander Investment Securities Inc. and TD Securities (USA) LLC.

The notes are guaranteed by AerCap Holdings NV.

AerCap is an independent aircraft leasing company based in Amsterdam.

Smithfield Foods prices $400 million

Smithfield Foods priced $400 million of 5.2% 10-year senior notes (Ba1/BBB-/BBB) on Wednesday at a spread of 290 bps over Treasuries, according to a market source.

The notes priced on the tight side of guidance in the Treasuries plus 295 bps area, plus or minus 5 bps.

BofA Merrill Lynch, Barclays and Goldman Sachs were the bookrunners of the in a Rule 144A and Regulation S offering.

The meat processing company is based in Smithfield, Va.

Vodafone talks deal

Vodafone Group (Baa2/BBB+/BBB+) held fixed income investor calls on Tuesday for a previously reported dollar-denominated offering of capital securities due 2079, according to a market source.

The rate on the notes will reset from April 2029 to April 2049 and from April 2049 to April 2079.

BofA Merrill Lynch and RBC Capital Markets are the bookrunners.

The notes will be callable at the first call date to the first reset date.

The deal includes a 101% change-of-control put.

The offering is registered with the Securities and Exchange Commission.

The telecommunications company is based in London.

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