FedEx, Synchrony, Citizens, Tampa Electric price; BMO, Boston Gas, Ontario Teachers eye deals

By Cristal Cody

Tupelo, Miss., July 22 – Investment-grade issuers opened the week with more than $2.5 billion of new bonds priced over Monday’s session.

FedEx Corp. sold $1 billion of 10-year guaranteed senior notes in the dollar-denominated market and priced a €1 billion separate two-part euro-denominated offering.

Synchrony Financial priced $750 million of three-year senior notes.

Citizens Financial Group, Inc. sold $500 million of seven-year senior notes.

Tampa Electric Co. brought $300 million of notes due 2050 to the primary market.

Also on Monday, Bank of Montreal marketed dollar-denominated fixed-rate resetting non-cumulative subordinated additional Tier 1 capital notes.

In other activity during the session, Boston Gas Co. held fixed income investor calls for a Rule 144A and Regulation S dollar-denominated offering of 10-year senior notes.

Meanwhile, Ontario Teachers’ Finance Trust is preparing to tap the dollar-denominated market. The trust plans to hold a roadshow in North America, Europe and Asia in the near future for a Rule 144A and Regulation S dollar-denominated bond offering.

About $15 billion to $20 billion of high-grade bond supply is expected by market sources this week.

Investment-grade issuance missed forecasts last week after issuers priced over $14 billion of bonds, compared to expectations of about $25 billion to $30 billion of volume.

Deal volume in the previous week was concentrated in the financial sector following the release of second quarter earnings reports from companies including Morgan Stanley, Bank of America Corp. and PNC Financial Services Group, Inc.

Additional financial supply is being eyed by market participants to price this week.

The heavy round of earnings releases also continues this week with companies including Whirlpool Corp., Amazon, Inc., Coca-Cola Co., AT&T Inc., Caterpillar Inc. and McDonald’s Corp. among those scheduled to post profit results.

The Markit CDX North American Investment Grade 32 index firmed more than 1 basis point on Monday to close at a spread of 53 bps.

FedEx prices $1 billion

FedEx sold $1 billion of 3.1% 10-year guaranteed senior notes (Baa2/BBB/) at a spread of Treasuries plus 110 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.666 to yield 3.139%.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC were the bookrunners.

The notes are guaranteed by Federal Express Corp., FedEx Ground Package System, Inc., FedEx Freight Corp., FedEx Freight, Inc., FedEx Corporate Services, Inc., FedEx Office and Print Services, Inc., Federal Express Europe, Inc., Federal Express Holdings SA, LLC and Federal Express International, Inc.

FedEx is a Memphis, Tenn.-based package and freight transportation company.

Synchrony raises $750 million

Synchrony Financial priced $750 million of 2.85% senior notes due July 25, 2022 on Monday at 99.937 to yield 2.872%, or a spread of Treasuries plus 110 bps, according to an FWP filing with the SEC.

Mizuho Securities USA Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC were the bookrunners.

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

Citizens Financial in primary

Citizens Financial Group priced $500 million of 2.85% seven-year senior notes at 99.798 to yield 2.882%, according to a news release and an FWP filing with the SEC.

The notes (/BBB+/BBB+) priced at a spread of 97 bps over Treasuries.

Barclays, Citizens Capital Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities and Mizuho Securities were the bookrunners.

Citizens Financial Group is a Providence, R.I.-based retail bank holding company.

Tampa Electric prints

Tampa Electric priced $300 million of 3.625% notes due June 15, 2050 (A3/BBB+/A) on Monday at a spread of 112.5 bps over Treasuries, according to a market source.

The notes were initially talked to price with a spread in the Treasuries plus 135 bps area.

The bookrunners were J.P. Morgan Securities, MUFG, RBC Capital Markets, Scotia Capital and Wells Fargo Securities.

The company is a Tampa, Fla.-based subsidiary of TECO Energy, Inc., an energy-related holding company.

BMO offers dollar notes

Bank of Montreal plans to price dollar-denominated fixed-rate resetting non-cumulative subordinated additional Tier 1 capital notes (Baa3/BBB-/), according to a market source and a 424B5 filing with the SEC.

The company held fixed income investor calls on Monday for the offering.

BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman, Sachs & Co. LLC and UBS Investment Bank are the lead managers.

The rate on the non-viability contingent capital perpetual notes will reset in 2024 and every following fifth year anniversary thereafter.

Bank of Montreal is a Montreal-based banking and financial services provider.

Boston Gas plans 10-year issue

Boston Gas (A3/A-/) held fixed income investor calls on Monday for a Rule 144A and Regulation S dollar-denominated offering of 10-year senior notes, according to a market source.

Citigroup Global Markets, HSBC Securities (USA) Inc., Morgan Stanley and RBC Capital Markets are the arrangers.

Boston Gas is a gas distribution company based in Waltham, Mass.

Ontario Teachers in pipeline

Ontario Teachers’ Finance Trust (Aa1/AA+/) plans to hold a global roadshow soon for a Rule 144A and Regulation S dollar-denominated bond offering, according to a market source.

The fixed income investor meetings will be conducted in North America, Europe and Asia.

BofA Securities, Inc., Citigroup Global Markets, HSBC Securities and RBC Capital Markets are the arrangers.

Ontario Teachers’ Finance Trust is a Toronto-based financing arm of the Ontario Teachers’ Pension Plan Board.

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