Diageo, American Tower, Global Atlantic tap primary market; VEON holds deal roadshow

By Cristal Cody

Tupelo, Miss., Sept. 30 – Investment-grade corporate issuers priced $3.45 billion of bonds on Monday in what is expected to be a lighter deal volume week.

Diageo Capital plc sold $1.6 billion of guaranteed notes in two tranches.

American Tower Corp. priced $1.35 billion of senior notes in two parts.

Also, Global Atlantic (Fin) Co. priced an upsized $500 million of 10-year senior notes.

Meanwhile, a deal is expected from VEON Holdings BV, which is holding a roadshow for a $1 billion offering of split-rated senior notes.

Investment-grade supply is expected to remain slow this week with several factors, including the U.S. presidential impeachment process, quarterly earnings blackout reporting periods and a week-long holiday in Asia, affecting the primary market.

Syndicate sources forecast about $10 billion to $15 billion of deal volume for the week. October is projected to post about $80 billion to $90 billion of total bond issuance, sources report.

The Markit CDX North American Investment Grade 33 index closed Monday at a spread of 59.9 basis points.

Elsewhere, Lipper US Fund Flows reported corporate investment-grade funds had inflows of $1.07 billion for the past week ended Wednesday.

Overall flows went from “risk-on to risk-off” last week, while inflows to the high-grade space, including corporates, agencies, Treasuries and mortgages, rebounded to $3.88 billion from $2.53 million in the prior week, according to a BofA Merrill Lynch research note.

The high-grade improvement was due to short-term high-grade inflows increasing to $710 million from a $570 million outflow in the previous week.

Excluding short-term high-grade inflows were little changed at $3.16 billion, up from $3.1 billion in the previous week.

High-grade inflows were led by ETFs, which saw inflows climb to $2.62 billion in the past week from $1.41 billion a week earlier, according to the report.

Diageo Capital prices $1.6 billion

Diageo Capital priced $1.6 billion of notes (A3/A-/) in two tranches on Monday, according to a market source.

The company sold $600 million of 2.125% five-year notes on the tight side of guidance at a spread of Treasuries plus 58 bps.

Diageo priced $1 billion of 2.375% 10-year notes on top of guidance with a Treasuries plus 80 bps spread.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, Nomura, Credit Suisse Securities (USA) LLC and NatWest Markets were the bookrunners.

The notes are guaranteed by Diageo plc.

The premium drink company is based in London.

American Tower prices $1.35 billion

American Tower priced $1.35 billion of senior notes (Baa3/BBB-/BBB) in two tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $750 million of 2.75% notes due Jan. 15, 2027 at 99.838 to yield 2.775% and a spread of 115 bps over Treasuries.

Price guidance was in the Treasuries plus 115 bps area, plus or minus 2.5 bps.

A $600 million tranche of 3.7% 30-year notes priced with a spread of Treasuries plus 160 bps, on the tight side of guidance in the 162.5 bps area, plus or minus 2.5 bps. The notes were sold 99.711 to yield 3.716%.

Barclays, Mizuho Securities USA Inc., RBC Capital Markets LLC, Santander Investment Securities Inc. and TD Securities (USA) LLC were the bookrunners.

American Tower is a telecommunications provider based in Boston.

Global Atlantic upsizes deal

Global Atlantic (Fin) priced $500 million of 4.4% 10-year senior notes (Baa3/BBB-/BBB) on Monday at a spread of Treasuries plus 275 bps, a market source said.

Initial price talk was in the Treasuries plus 287.5 bps area.

The deal was upsized from $300 million.

Barclays, Goldman Sachs & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

The notes are guaranteed by Global Atlantic Financial Ltd.

The companies are part of parent company Global Atlantic Financial Group Ltd., a New York-based insurance provider.

VEON roadshows $1 billion of notes

VEON Holdings is holding a roadshow for a $1 billion offering of senior notes (expected Ba2/BB+/BBB-/) in the United States and United Kingdom markets, according to an informed source and news release.

Citigroup, HSBC, J.P. Morgan Securities LLC and Societe Generale are the arrangers.

The subsidiary of VEON Ltd. started the investor meetings on Thursday.

Amsterdam-based VEON Ltd. provides mobile and fixed-line telecommunications services through its subsidiaries in emerging markets.

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