Diamondback Energy, CyrusOne, Virginia Power, Ontario sell high-grade bonds; Heineken eyed

By Cristal Cody

Tupelo, Miss., Nov. 20 – Investment-grade bond supply totaled more than $4 billion over Wednesday’s session.

Diamondback Energy, Inc. sold $3 billion of split-rated senior notes in three tranches 20 basis points to 25 bps tighter than initial talk.

CyrusOne LP and CyrusOne Finance Corp. priced $1.2 billion of split-rated senior notes in two tranches 25 bps better than initial guidance.

Also in the energy space, Virginia Electric and Power Co. sold $550 million of 30-year senior notes.

In other registered supply on Wednesday, the Province of Ontario priced a C$750 million reopening of its 2.65% green bonds due Feb. 5, 2025.

About $17 billion of investment-grade bonds have been brought to the primary market week to date.

About $25 billion of issuance is forecast for the week, according to syndicate sources.

Coming up, a possible deal is being eyed from Heineken NV, which will hold fixed income investor calls on Thursday via J.P. Morgan Securities LLC, a source said.

The Markit CDX North American Investment Grade 33 index eased more than 1 bp to close the session at a spread of 52.9 bps.

In the secondary market, Intel Corp.’s new senior notes (A1/A+/A+) traded better on Wednesday, a market source said.

The company’s $1.25 billion of 2.45% notes due Nov. 15, 2029 ended the day a dime better at 100.32.

The notes priced at 99.868 to yield 2.465%, or a spread of 65 bps over Treasuries.

Intel’s 3.25% notes due Nov. 15, 2049 improved to 101.24 from 100.70 on Tuesday.

The 30-year notes priced in a $1.5 billion tranche on Monday at 99.943 to yield 3.253%, or Treasuries plus 95 bps.

Diamondback raises $3 billion

Diamondback Energy sold $3 billion of senior notes (Ba1/BBB-/BBB) in three tranches in the offering on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $1 billion tranche of 2.875% five-year notes priced at 99.959 to yield 2.884%, or a spread of 130 bps over Treasuries.

Initial talk was in the 155 bps over Treasuries area.

Diamondback Energy sold $800 million of 3.25% seven-year notes at a Treasuries plus 160 bps spread, compared to initial price guidance in the 180 bps spread area. The notes were sold at 99.858 to yield 3.273%.

In the final tranche, $1.2 billion of 3.5% 10-year notes priced at 99.741 to yield 3.531% and a 180 bps over Treasuries spread. The notes were initially talked to price with a spread I the 200 bps area.

Bookrunners were BofA Securities, Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC.

Diamondback is a Midland, Tex., oil and natural gas company.

CyrusOne prices $1.2 billion

CyrusOne and CyrusOne Finance priced $1.2 billion of senior notes (Ba1/BBB-/BBB-) in two tranches in its deal on Wednesday, according to a market source and an FWP filing.

The companies sold $600 million of 2.9% five-year notes at 99.859 to yield 2.931%. The notes priced with a spread of 135 bps over Treasuries.

Initial price talk on the five-year tranche was in the Treasuries plus 160 bps area.

A $600 million tranche of 3.45% 10-year notes priced at 99.709 to yield 3.485%, or a Treasuries plus 175 bps spread.

The 10-year notes were initially talked to price with a spread in the 200 bps over Treasuries area.

Bookrunners were Goldman Sachs, J.P. Morgan, Morgan Stanley & Co. LLC, BMO Capital Markets Corp., Capital One Securities, Inc., Fifth Third Securities, Inc., KeyBanc Capital Markets Inc., MUFG, PNC Capital Markets LLC, RBC Capital Markets, LLC, Stifel, Nicolaus & Company, Inc., SunTrust Robinson Humphrey, Inc. and TD Securities (USA) LLC.

CyrusOne is a Dallas-based real estate investment trust specializing in data center properties.

Virginia Electric sells notes

Meanwhile, Virginia Electric and Power sold $550 million of 3.3% senior notes due Dec. 1, 2049 (A2/BBB+/A) on Wednesday at a spread of 110 bps over Treasuries, according to an FWP filing.

The notes priced at 99.811 to yield 3.31%.

Deutsche Bank Securities Inc., MUFG, SunTrust Robinson Humphrey and TD Securities were the bookrunners.

The electric utility is based in Richmond, Va.

Ontario reopens green bonds

Also during the session, Ontario priced a C$750 million reopening of its 2.65% green bonds due Feb. 5, 2025 (Aa3/A+/DBRS: AA) at 103.915 to yield 1.855%, according to an FWP filing.

The bonds priced at a spread of 41 bps over the Government of Canada benchmark.

BMO Nesbitt Burns, Inc., HSBC Securities (Canada) Inc., Merrill Lynch Canada Inc., RBC Dominion Securities Inc. and TD Securities Inc. were the underwriters.

The province originally sold C$1 billion of the bonds on Jan. 25, 2018 at 99.759 to yield 2.688%, or a spread of 53.3 bps over the Government of Canada benchmark.

The issue was reopened in a C$950 million offering on Jan. 31, 2019 at 101.326 to yield 2.411% and a spread of 62.5 bps over the Government of Canada benchmark.

The total outstanding is now C$2.7 billion.

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