Supply heavy; Vodafone, Boston Properties, PartnerRe, Pentair, Lloyds, Hudson among issuers

By Cristal Cody

Tupelo, Miss., June 12 – Investment-grade corporate and sovereign, supranational and agency issuers priced more than $12 billion of bonds on Wednesday.

Vodafone Group plc led the day’s deal volume with a $2.25 billion two-part offering of notes to fund tender offers for outstanding issues.

Boston Properties LP sold $850 million of 10-year green senior notes.

PartnerRe Finance B LLC brought $500 million of 10-year guaranteed senior notes.

Realty Income Corp. priced $500 million of 10-year senior notes.

Pentair Finance Sarl sold $400 million of 10-year senior notes.

American Campus Communities Operating Partnership LP came with $400 million of seven-year guaranteed senior notes.

Lloyds Banking Group plc priced $500 million of fixed-rate reset additional tier 1 perpetual subordinated contingent convertible securities.

AXIS Specialty Finance plc sold $300 million of 10-year senior notes.

Two issuer reopened existing bonds on Wednesday.

Northern Natural Gas Co. priced a $200 million reopening of its 4.3% senior bonds due Jan. 15, 2049.

Hudson Pacific Properties, LP placed a $150 million add-on to its 4.65% senior notes due April 1, 2029.

In SSA supply, Bank of Montreal priced $1.75 billion of three-year covered bonds.

Kommunalbanken AS sold $1.5 billion of five-year notes.

Also, the International Bank for Reconstruction and Development priced $1.25 billion of four-year global notes.

Week to date, high-grade corporate deal volume totals more than $27 billion after issuance topped $17 billion on Monday and more than $4 billion on Tuesday.

SSA supply totals more than $7 billion week to date.

Deal volume this week has been led by Fiserv, Inc.’s $9 billion four-part offering of senior notes on Monday.

About $20 billion to $25 billion of issuance was expected by syndicate sources for the week.

The Markit CDX North American Investment Grade 32 index softened more than 1 basis point over the session to a spread of 61 bps.

Vodafone prices $2.25 billion

Vodafone Group priced $2.25 billion of notes (Baa2/BBB+/BBB+) in two parts on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $1.75 billion tranche of 4.875% 30-year notes priced at 98.251 and a spread of 237.5 bps over Treasuries. The notes priced on the tight side of guidance in the Treasuries plus 240 bps area.

Vodafone sold $500 million of 5.125% 40-year notes at 98.527 and a Treasuries plus 260 bps spread. Price guidance was at Treasuries plus 260 bps, plus or minus 2.5 bps.

BofA Securities, Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC were the underwriters.

The telecommunications company is based in London.

Boston Properties sells notes

Boston Properties sold $850 million of 3.4% 10-year green senior notes at 99.815 to yield 3.422% on Wednesday, according to a market source and an FWP filing with the SEC.

The notes (Baa1/A-/BBB+) priced on the tight side of guidance with a spread of 130 bps over Treasuries.

Bookrunners were BofA Securities, Jefferies LLC, J.P. Morgan Securities LLC, Morgan Stanley, Citigroup Global Markets Inc., BNY Mellon Capital Markets, LLC, Wells Fargo Securities, LLC, U.S. Bancorp Investments, Inc., Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc. and TD Securities (USA) LLC.

Boston-based Boston Properties is the operating subsidiary of real estate investment trust Boston Properties, Inc.

Realty Income in primary

Realty Income sold $500 million of 3.25% 10-year senior notes on Wednesday at a spread of 120 bps over Treasuries, according to an FWP filing with the SEC.

The notes (A3/A-/BBB+) priced at 99.359 to yield 3.326%.

Bookrunners were Citigroup Global Markets, BNY Mellon Capital Markets, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., U.S. Bancorp Investments, BofA Securities, Barclays, J.P. Morgan Securities, Morgan Stanley, RBC Capital Markets, Regions Securities LLC and Wells Fargo Securities.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

PartnerRe prints $500 million

PartnerRe Finance B sold $500 million of 3.7% 10-year guaranteed senior notes (A3/A-/) on Wednesday on top of guidance at a spread of 160 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The notes priced at 99.783 to yield 3.726%.

Citigroup Global Markets, Credit Agricole Securities (USA) Inc., Goldman Sachs and HSBC Securities (USA) Inc. were the bookrunners.

The notes are guaranteed by parent company PartnerRe Ltd.

PartnerRe is a Pembroke, Bermuda-based reinsurance provider and a subsidiary of EXOR Nederland NV.

Lloyds brings perpetual notes

Lloyds Banking Group priced $500 million of fixed-rate reset additional tier 1 perpetual subordinated contingent convertible securities (Baa3/BB-/BB+) on Wednesday at par to yield 6.75%, according to a market source and an FWP filing with the SEC.

Initial price talk was in the 7.25% area.

The securities priced with a spread of 481.5 bps over Treasuries.

J.P. Morgan Securities, Lloyds Securities Inc., Morgan Stanley and UBS Securities were the bookrunners.

The rate will reset June 27, 2026 and every following fifth year.

Lloyds Banking Group is a bank and financial services company based in London.

Pentair raises $400 million

Pentair Finance sold $400 million of 4.5% 10-year senior notes on Wednesday at a spread of Treasuries plus 245 bps, according to an FWP filed with the SEC.

The notes priced at 99.393 to yield 4.576%.

J.P. Morgan Securities, BofA Securities, Citigroup Global Markets, MUFG and U.S. Bancorp Investments were the bookrunners.

The issue is guaranteed by Pentair plc and Pentair Investments Switzerland GmbH.

Pentair is a Minneapolis-based company mostly providing equipment related to water.

American Campus prices

American Campus Communities Operating Partnership sold $400 million of 3.3% seven-year guaranteed senior notes on Tuesday at 99.704 to yield 3.347%, according to an FWP filing with the SEC.

The notes (Baa2/BBB/) priced with a spread of Treasuries plus 135 bps.

Bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities, Wells Fargo Securities, BofA Securities, Jefferies and U.S. Bancorp Investments.

The notes are guaranteed by American Campus Communities Inc.

The real estate investment trust for student housing is based in Austin, Texas.

AXIS sells notes

AXIS Specialty Finance priced $300 million of 3.9% 10-year senior notes (Baa1/A-/) on Wednesday at a spread of Treasuries plus 185 bps, according to an FWP filing with the SEC.

The notes priced at 99.363 to yield 3.977%.

Wells Fargo Securities and HSBC Securities were the bookrunners.

The notes are fully and unconditionally guaranteed by parent company AXIS Capital Holdings Ltd.

AXIS is a Pembroke, Bermuda-based provider of specialty lines insurance and treaty reinsurance with shareholders’ equity.

Northern Gas taps issue

Northern Natural Gas priced a $200 million reopening of its 4.3% senior bonds due Jan. 15, 2049 (A2/A/A) on Wednesday in line with guidance at a spread of Treasuries plus 145 bps, according to a market source.

The company originally sold $450 million of the notes on July 12, 2018 at a Treasuries plus 135 bps spread. The total outstanding is now $650 million.

Barclays and J.P. Morgan Securities were the bookrunners.

Northern Natural Gas is a Berkshire Hathaway Energy Co. subsidiary based in Omaha, Neb.

Hudson Pacific brings add-on

Hudson Pacific Properties placed a $150 million add-on to its 4.65% senior notes due April 1, 2029 (Baa3/BBB-/BBB-) on Wednesday at a spread of Treasuries plus 195 bps, according to an FWP filing with the SEC.

The notes priced at 104.544 to yield 4.07%.

Hudson Pacific Properties first sold $350 million of the notes on Feb. 20 at 98.663 to yield 4.818%, or a Treasuries plus 217 bps spread.

The total outstanding is now $500 million.

BofA Securities and Wells Fargo Securities were the bookrunners.

The notes are guaranteed by Hudson Pacific Properties, Inc.

Hudson Pacific is a Los Angeles-based real estate investment trust focused on office and media and entertainment properties in California.

Bank of Montreal sells bonds

Bank of Montreal (Aa2/A+/AA-) priced $1.75 billion of 2.1% covered bonds due June 15, 2022 on Wednesday at mid-swaps plus 29 bps, or a spread of 33.1 bps over Treasuries, according to a market source.

Initial price talk was in the mid-swaps plus 32 bps area.

BMO Capital Markets Corp., Barclays, Citigroup Global Markets, HSBC Securities and RBC Capital Markets were the bookrunners.

The financial services company is based in Toronto.

Kommunalbanken prices $1.5 billion

Kommunalbanken (Aaa/AAA/) priced $1.5 billion of 2% five-year notes notes on Wednesday at spread of mid-swaps plus 15 bps, or Treasuries plus 15.6 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 17 bps area.

Citigroup Global Markets, J.P. Morgan Securities and NatWest Markets Securities Inc. were the lead managers of the Rule 144A and Regulation S offering.

The government-funded lender to municipalities is based in Oslo.

World Bank raises $1.25 billion

World Bank priced $1.25 billion of 1.875% global notes due June 19, 2023 on Wednesday at mid-swaps plus 5 bps, or a Treasuries plus 8.5 bps spread, according to a market source.

Initial price talk on the notes (Aaa/AAA/AAA) was in the mid-swaps plus 5 bps area.

BofA Securities, HSBC Securities and RBC Capital Markets were the bookrunners.

The global development financing cooperative is based in Washington, D.C.

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