UnitedHealth prices $5.5 billion; Imperial, Bank of America, BB&T, Bank of Montreal price

By Cristal Cody

Tupelo, Miss., July 23 – UnitedHealth Group Inc. led deal volume in the high-grade primary market on Tuesday with a $5.5 billion five-part offering of senior notes.

Market activity was strong with more than $11 billion of bonds brought to the market.

Imperial Brands Finance plc priced $2.75 billion of senior notes in three tranches.

Bank of America Corp. sold $1.5 billion of two-year floating-rate senior notes.

BB&T Corp. came with $1 billion of five-year senior medium-term notes a day after selling $1.7 billion of $1,000-par fixed-rate reset non-cumulative perpetual preferred shares.

Also on Tuesday, Bank of Montreal priced $500 million of fixed-rate resetting non-cumulative perpetual subordinated additional Tier 1 capital notes following fixed income investor calls in the previous session.

Investment-grade volume week to date totals more than $15 billion.

Including BB&T’s preferred deal, investment-grade issuers priced more than $4 billion of securities on Monday.

Excluding BB&T’s deal, volume was led by FedEx Corp.’s $1 billion of new 3.1% guaranteed senior notes due Aug. 5, 2029.

FedEx’s notes improved 4 basis points in secondary trading, according to a market source.

The 3.1% notes priced Monday at a spread of Treasuries plus 110 bps.

Synchrony Financial’s $750 million of 2.85% senior notes due July 25, 2022 brought to the market on Monday tightened about 8 bps to the 102 bps area in the secondary market, the source said.

The notes priced at a Treasuries plus 110 bps spread.

Citizens Financial Group, Inc.’s $500 million of 2.85% senior notes due July 27, 2026 that priced on Monday firmed about 3 bps in secondary trading.

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

Meanwhile, a couple of deals are in the works.

Boston Gas Co. held fixed income investor calls on Monday for a Rule 144A and Regulation S dollar-denominated offering of 10-year senior notes.

In addition, Ontario Teachers’ Finance Trust is preparing 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 deal volume is forecast by market sources for this week.

Bank and financial supply remains in the forefront following the release of earnings reports, which began last week with deals from Morgan Stanley, Bank of America and PNC Financial Services Group, Inc.

The Markit CDX North American Investment Grade 32 index closed the day more than 2 bps tighter at a spread of 51 bps. The index ended Monday more than 1 bp better.

UnitedHealth prices $5.5 billion

UnitedHealth Group priced $5.5 billion of senior notes (A3/A+/A-) in five tranches on Tuesday, according to a market source.

UnitedHealth sold $750 million of 2.375% five-year notes at a spread of 55 bps over Treasuries.

A $1 billion tranche of 2.875% 10-year notes priced at a spread of 80 bps over Treasuries.

A $1.25 billion offering of 3.5% 20-year notes priced with a Treasuries plus 95 bps spread.

UnitedHealth sold $1.25 billion of 3.7% 30-year notes at a spread of 110 bps over Treasuries.

The final $1.25 billion tranche of 3.875% 40-year notes priced at a Treasuries plus 130 bps spread.

The notes priced on the tight side of guidance and better than initial talk.

BofA Securities Inc., Barclays, Citigroup Global Markets Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the bookrunners.

The diversified health company is based in Minnetonka, Minn.

Imperial Brands sells $2.75 billion

Imperial Brands Finance priced $2.75 billion of senior notes (Baa3/BBB/) in three tranches on Tuesday, according to a market source.

The company sold $1 billion of 3.125% five-year notes with a spread of 140 bps over Treasuries.

A $750 million tranche of 3.5% seven-year notes came at a Treasuries plus 170 bps spread.

The final $1 billion of 3.875% 10-year notes priced at a spread of 190 bps over Treasuries.

The notes were priced on the tight side of guidance.

Bookrunners were BofA Securities, Barclays, HSBC Securities (USA) Inc., Mizuho Securities USA Inc. and MUFG.

Imperial Brands Finance is a financing arm of Bristol, United Kingdom-based tobacco company Imperial Brands plc.

Bank of America sells $1.5 billion

Bank of America sold $1.5 billion of two-year floating-rate senior notes (A2/A-/A+) on Tuesday at Libor plus 32 bps, according to a market source.

Initial price talk was in the Libor plus 35 bps area.

BofA Securities was the bookrunner.

The financial services company is based in Charlotte, N.C.

BB&T prices $1 billion

BB&T priced $1 billion of 2.5% five-year senior medium-term notes (A2/A-/A+) on Tuesday at 99.916 and a spread of Treasuries plus 70 bps, according to an FWP filing with the Securities and Exchange Commission.

BB&T Capital Markets, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey Inc. were the bookrunners.

The bank and financial services company is based in Winston-Salem, N.C.

Bank of Montreal sells Tier 1 notes

Bank of Montreal priced $500 million of 4.8% fixed-rate resetting non-cumulative subordinated additional Tier 1 capital notes (Baa3/BBB-/) on Tuesday at par, according to an FWP filing with the SEC.

The non-viability contingent capital perpetual notes priced with a spread of 297.9 bps over Treasuries.

BMO Capital Markets Corp., Citigroup Global Markets, Goldman, Sachs & Co. LLC and UBS Securities LLC were the lead managers.

The rate on the non-viability contingent capital perpetual notes will reset Aug. 25, 2024 at a fixed rate equal to the benchmark Treasury yield plus 297.9 bps. The rate will reset every following fifth anniversary thereafter.

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

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