High-grade supply thins; Cnooc, Kommunalbanken price notes; Bacardi softens; CVS eases

By Cristal Cody

Tupelo, Miss., April 25 – Two issuers tapped the U.S. high-grade primary market on Wednesday in a mostly quiet session following heavy issuance the previous day.

“The S&P 500 closed down last night – that may have had people taking a pause before jumping in,” a syndicate source said of the light supply.

Cnooc Finance (2015) U.S.A. LLC priced a $1.45 billion two-tranche offering of senior notes.

Kommunalbanken AS sold $1 billion of three-year notes.

The Canadian investment-grade primary market had one deal price from Chartwell Retirement Residences. The company sold C$150 million of 4.211% senior debentures due April 28, 2025 at par to yield a spread of 190 basis points over the interpolated Government of Canada bond curve.

U.S. deal volume is expected to ramp up in May after the bulk of companies exit earnings blackout periods, a source said.

The Markit CDX North American Investment Grade 30 index ended the day slightly tighter at a spread of 62 bps.

In the secondary market, Bacardi Ltd.’s $2.6 billion of guaranteed notes (Ba1/BBB-/BBB-) that priced in four tranches on Tuesday softened 1 bp to 8 bps.

CVS Health Corp.’s 4.3% senior notes due March 25, 2028 eased about 2 bps during the session.

Cnooc sells notes

Cnooc Finance (2015) U.S.A. priced $1.45 billion of senior notes (A1/A+/) in two tranches on the tight side of guidance on Wednesday, according to a market source.

The company sold $450 million of 3.75% five-year notes with a spread of Treasuries plus 105 bps.

Cnooc priced $1 billion of 4.375% 10-year notes with a Treasuries plus 140 bps spread.

Bank of China, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, ICBC Standard Bank Plc, Mizuho Securities USA LLC, Natixis Securities Americas LLC and Societe Generale were the lead managers.

The notes are unconditionally guaranteed by parent company Cnooc Ltd.

Cnooc Finance (2015) U.S.A. is a Wilmington, Del.-based financing arm of the Beijing-based national oil company.

Kommunalbanken prices

Kommunalbanken (Aaa/AAA/) priced $1 billion of 2.875% notes due June 14, 2021 on Wednesday at a spread of mid-swaps plus 4 bps, or Treasuries plus 25.1 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 5 bps area.

BNP Paribas Securities Corp., HSBC Securities, J.P. Morgan Securities and Scotia Capital (USA) Inc. were the lead managers of the Rule 144A and Regulation S offering.

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

Bacardi softens

In new issue secondary trading, Bacardi’s 4.70% notes due May 15, 2028 widened 3 bps from issuance, a source said.

The company priced $800 million of the 10-year notes on Tuesday at a Treasuries plus 175 bps spread.

Bacardi’s $700 million of 5.30% bonds due May 15, 2048 traded 8 bps wider during the session.

The notes priced with a Treasuries plus 215 bps spread.

Bacardi is a privately-held spirits company based in Hamilton, Bermuda.

CVS eases

In other secondary trading on Wednesday, CVS Health’s 4.3% senior notes due March 25, 2028 (Baa1/BBB+) eased about 2 bps to 148.1 bps bid, a market source said.

The Woonsocket, R.I.-based retail pharmacy chain and pharmacy benefits manager sold $9 billion of the notes on March 6 at a spread of Treasuries plus 160 bps.

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