Synchrony Financial sells $1.25 billion notes; Aroundtown prints; high-grade inflows increase

By Cristal Cody

Tupelo, Miss., March 14 – Synchrony Financial priced $1.25 billion of high-grade senior notes in two tranches on Thursday as deal volume slowed.

The transaction was 4.52 times oversubscribed and the sole reported Securities and Exchange Commission-registered offering during the session.

In other issuance on Thursday, Aroundtown SA priced $600 million of 10-year notes under its euro medium-term note program.

Also, Swiss Re Finance (Luxembourg) SA announced plans to price 31-year resettable fixed-rate guaranteed subordinated notes.

Thursday’s volume brings week-to-date corporate supply to more than $25 billion, in line with market issuance forecasts.

The reverse Yankee market also remains active with a €1.1 billion offering on Thursday from Marsh & McLennan Cos., Inc. following other euro-denominated deals priced or issued in March from issuers including Medtronic plc, PepsiCo, Inc. and Coca-Cola Co.

For the week ended Wednesday, Lipper US Fund Flows reported inflows for corporate investment-grade funds rose to $3.3 billion from $1.99 billion in the previous week.

The Markit CDX North American Investment Grade 31 index was steady on the day at a spread of 58 basis points.

In the secondary market, new issues priced this week have traded mostly better, a source said.

KLA-Tencor Corp.’s $1.2 billion two-part offering of senior notes (Baa1/BBB/BBB+) priced Wednesday improved about 7 bps from issuance.

The company sold $800 million of 4.1% notes due March 15, 2029 at a spread of 155 bps over Treasuries and a $400 million tranche of 5% notes due March 15, 2049 with a Treasuries plus 205 bps spread.

United Parcel Service, Inc.’s $1.5 billion two-part offering of senior notes (A1/A+/) priced on Wednesday firmed about 1 bp to 2 bps in secondary trading.

The company sold $750 million of 3.4% notes due March 15, 2029 at a spread of 80 bps over Treasuries and $750 million of notes due March 15, 2049 at a Treasuries plus 125 bps spread.

Synchrony brings two tranches

Synchrony Financial priced $1.25 billion of fixed-rate senior notes (/BBB/BBB-) in two tranches in the offering on Thursday, according to a market source.

The company sold $600 million of 4.375% five-year notes at a spread of 200 bps over Treasuries. The notes priced on top of guidance and tighter than initial talk in the 225 bps spread area.

A $650 million tranche of 5.15% 10-year notes priced in line with guidance with a Treasuries plus 255 bps spread. Initial talk was in the Treasuries plus 270 bps area.

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

Synchrony is a consumer financial services company based in Stamford, Conn.

Aroundtown prices notes

Aroundtown (/BBB+/) priced $600 million of 5.375% notes due 2029 at 99.215 on Thursday, according to a news release.

Aroundtown said it is hedging the currency risk implied by the dollar denomination via a cross-currency swap into euros for the period of the notes with interest fixed at 1.75% until 2023. The coupon will be Euribor plus 265 bps thereafter.

Aroundtown is a commercial real estate property company based in Luxembourg.

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