Novartis, DTE, Sysco, FS KKR, Oshkosh, Duke Realty price; Carrier Global holds deal calls

By Cristal Cody

Tupelo, Miss., Feb. 11 – More than $8 billion of notes priced in the high-grade primary market over Tuesday’s session.

Novartis Capital Corp. sold $5 billion of notes in four tranches.

DTE Electric Co. priced $1.1 billion of general and refunding mortgage bonds in two parts.

Sysco Corp. sold $1 billion of senior notes in two tranches.

FS KKR Capital Corp. priced a $475 million Rule 144A and Regulation S offering of five-year notes.

Oshkosh Corp. brought $300 million of 10-year senior notes to the primary market.

Duke Realty LP placed an upsized $325 million of 30-year senior notes.

The deals bring week to date investment-grade issuance to more than $18 billion.

About $25 billion to $35 billion of bond supply is anticipated this week, according to syndicate sources.

Carrier Global Corp. started a two-day round of fixed income investor calls on Tuesday for a potential $9.2 billion offering of senior notes (Baa3/BBB/) as part of its spin-off from United Technologies Corp.

Otis Worldwide Corp., which also is being spun off from United Technologies, is expected to follow with fixed income investor calls for a possible $5.3 billion offering of senior notes (Baa2/BBB/).

Meanwhile, a possible $20 billion-plus investment-grade senior secured bond offering from T-Mobile U.S. Inc. is back in focus after the company received court approval on Tuesday for its acquisition of Sprint Corp., a market source said.

A New York federal judge ruled in favor of T-Mobile in a lawsuit filed by a coalition of states to block the merger.

The acquisition “remains subject to certain closing conditions, including possible additional court proceedings,” T-Mobile said in a news release.

In the secondary market, bonds in the telecommunications sector were mixed.

AT&T Inc.’s 4.35% notes due March 1, 2029 firmed about 1 basis point.

Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 tightened about 5 bps.

In new issue secondary trading, Intel’s $2.25 billion of senior notes (A1/A+/A+) sold in three new and reopened tranches on Monday improved about 1 bp to 2 bps.

The company’s $1 billion of new issue 3.1% notes due Feb. 15, 2060, priced at a Treasuries plus 110 bps spread, firmed 2 bps.

The Markit CDX North American Investment Grade 33 index closed modestly tighter on Tuesday at a spread of 44.9 bps.

Novartis prices $5 billion

Novartis Capital priced $5 billion of notes (A1/AA-/AA-) in four tranches on Tuesday, according to a market source.

The company sold $1 billion of 1.75% notes due Feb. 14, 2025 at a spread of 37 bps over Treasuries.

Initial price talk on the five-year notes was in the Treasuries plus 55 bps area.

Novartis priced $1.25 billion of 2% notes due Feb. 14, 2027 at a spread of 50 bps over Treasuries.

The seven-year tranche was talked to price in the 65 bps spread area.

A $1.5 billion offering of 2.2% notes due Aug. 14, 2030 priced with a Treasuries plus 62 bps spread, compared to initial talk in the in the Treasuries plus 80 bps area.

Finally, $1.25 billion of 2.75% notes due Aug. 14, 2050 priced with a Treasuries plus 80 bps spread.

Initial price talk on the 30-year notes was in the Treasuries plus high 90 bps area.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and MUFG were the bookrunners.

The notes are guaranteed by Novartis AG.

The holding company for pharmaceuticals and health care subsidiaries is based in New York.

DTE prints $1.1 billion

DTE Electric priced $1.1 billion of general and refunding mortgage bonds (Aa3/A/A+) in two parts on Tuesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company sold $600 million of 2.25% 10-year bonds at 99.884 to yield 2.263% and a spread of 68 bps over Treasuries.

The 10-year bonds were initially talked to price with a spread in the 85 bps over Treasuries area.

A $500 million tranche of 2.95% 30-year bonds priced at 99.96 to yield 2.952%, or a Treasuries plus 90 bps spread. Initial talk was in the 110 bps over Treasuries area.

J.P. Morgan Securities LLC, Mizuho Securities USA Inc., MUFG, Scotia Capital (USA) Inc. and TD Securities (USA) LLC were the bookrunners.

Detroit-based DTE is a diversified energy company involved in the development and management of energy-related businesses and services.

Sysco raises $1 billion

Sysco sold $1 billion of senior notes (A3/BBB+/) in two parts on Tuesday, according to a market source and an FWP filing.

A $500 million tranche of 2.4% green notes due Feb. 15, 2030 priced at 99.647 to yield 2.44% and a spread of 85 bps over Treasuries.

The notes were talked to price in the Treasuries plus 105 bps area.

Sysco sold $500 million of 3.3% notes due Feb. 15, 2050 at a Treasuries plus 125 bps spread, or 99.811 to yield 3.31%.

Price guidance was in the Treasuries plus 145 bps to 150 bps area.

BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan, TD Securities, Wells Fargo Securities LLC, Deutsche Bank Securities Inc., HSBC Securities and U.S. Bancorp Investments Inc. were the bookrunners.

Sysco is a Houston-based food service marketing and distribution company.

FS KKR Capital prices

FS KKR Capital (Baa3//BBB-) priced $475 million of 4.25% notes due Feb. 14, 2025 on Tuesday in a Rule 144A and Regulation S private placement offering, according to a news release.

The Philadelphia-based business development company invests mainly in senior secured and subordinated debt of private middle-market U.S. companies.

Duke Realty sells notes

Duke Realty priced an upsized $325 million of 3.05% senior notes due March 1, 2050 at a spread of Treasuries plus 112 bps on Tuesday, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 140 bps area.

The notes (Baa1/BBB+/) were sold at 97.345 to yield 3.188%.

The deal was upsized from $300 million.

Bookrunners were Wells Fargo, Barclays, RBC Capital Markets, LLC, UBS Securities LLC, Regions Securities LLC and Scotia.

Duke Realty is the operating partnership of Indianapolis-based Duke Realty Corp., which owns and operates industrial and health care properties.

Oshkosh brings $300 million

Oshkosh priced $300 million of 3.1% 10-year senior notes (Baa3/BBB/BBB-) on Tuesday at a Treasuries plus 155 bps spread, according to a market source and an FWP filing.

Initial price talk was in the Treasuries plus 185 bps area.

The notes priced at 99.624 to yield 3.144%.

BofA Securities, J.P. Morgan, Wells Fargo and U.S. Bancorp were the bookrunners.

Oshkosh is an Oshkosh, Wis.-based industrial manufacturer of specialty vehicles and vehicle bodies.

AT&T modestly better

AT&T’s 4.35% notes due March 1, 2029 improved about 1 bp to 115 bps bid during the session, a market source said.

AT&T sold $3 billion of the bonds on Feb. 13, 2019 at a spread of Treasuries plus 170 bps.

The telecommunications company is based in Dallas.

Verizon notes firm

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 firmed about 5 bps on Tuesday to 77 bps bid, according to a market source.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Feb. 5, 2019 at a spread of Treasuries plus 120 bps.

The telecommunications company is based in New York City.

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