UnitedHealth, Royal Bank of Canada, Goldman price; Hercules brings its first high-grade deal

By Cristal Cody

Tupelo, Miss., Oct. 18 – Investment-grade companies priced more than $8 billion of notes on Wednesday.

UnitedHealth Group Inc. came with a $4 billion five-part offering of senior notes.

Royal Bank of Canada tapped the primary market with a $2.5 billion two-tranche sale of three-year fixed- and floating-rate notes.

Goldman Sachs Group Inc. brought $1.5 billion of 5% depositary shares to the primary market during the session.

In other new issuance, Hercules Capital, Inc. upsized its first high-grade bond offering and priced $150 million of five-year notes.

The Markit CDX North American Investment Grade 29 index ended mostly flat at a spread of 54 basis points.

UnitedHealth prices $4 billion

UnitedHealth Group priced $4 billion of senior notes (A3/A+/A) in five tranches on Wednesday, according to a market source.

The company sold $300 million of three-year floating-rate notes at Libor plus 7 bps.

UnitedHealth priced $900 million of 1.95% three-year fixed-rate notes with a spread of Treasuries plus 30 bps.

In the five-year tranche, the company sold $900 million of the notes with a 2.375% coupon and a spread of 45 bps over Treasuries.

UnitedHealth priced $950 million of 2.95% 10-year notes at a spread of 70 bps over Treasuries.

In the final tranche, the company sold $950 million of 3.75% 30-year notes at a Treasuries plus 95 bps spread.

U.S. Bancorp Investments Inc., Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Mizuho Securities USA Inc., RBC Capital Markets, LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate and working capital purposes, including redeeming or repurchasing outstanding securities or refinancing debt.

UnitedHealth is a diversified health company based in Minnetonka, Minn.

RBC raises $2.5 billion

Royal Bank of Canada priced $2.5 billion of three-year series G senior medium-term notes (A1/AA-/AA) in two parts on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

Royal Bank sold $500 million of floating-rate notes due Oct. 26, 2020 at par to yield Libor plus 24 bps.

The bank priced $2 billion of 2.15% fixed-rate three-year notes at 99.942 to yield 2.17%. The notes priced with a Treasuries plus 47 bps spread.

RBC Capital Markets, Citigroup Global Markets and Deutsche Bank Securities Inc. were the bookrunners.

Royal Bank of Canada is a Toronto-based financial services company.

Goldman Sachs sells fixed/floaters

Goldman Sachs Group sold $1.5 billion of 5% depositary shares at par on Wednesday, tighter than initial price talk in the 5.25% area, according to a market source.

The coupon has a fixed rate through Nov. 10, 2022, then the rate will convert to a floating rate of Libor plus 287.4 bps.

The shares each represent 1/25 of an interest in a share of series P fixed-to-floating rate non-cumulative preferred share, according to an 8-K and prospectus filed with the Securities and Exchange Commission.

Goldman Sachs & Co. was the bookrunner. The deal includes a 30-day over-allotment option.

The securities will not be listed on an exchange.

Proceeds will be used to redeem some or all of the company’s 5.95% series I preferreds and for general corporate purposes, including the potential redemption of some or all of the company’s 6.2% series B preferreds.

Goldman Sachs Group is a New York-based banking, securities and investment management company.

Hercules brings first IG deal

Hercules Capital priced an upsized $150 million of 4.625% five-year unsecured notes (/BBB-/) at 99.449 to yield 4.75%, or a spread of Treasuries plus 276 bps, according to a press release and a 497AD filed with the Securities and Exchange Commission.

The company’s first investment-grade bond deal was upsized from $100 million. Price guidance was 4.75%.

Citigroup Global Markets and Jefferies & Co. were the bookrunners.

Proceeds will be used to repurchase or redeem all or some of Hercules’ 6.25% notes due 2024, for investments in debt and equity securities and for other general corporate purposes.

Hercules is a Palo Alto, Calif.-based specialty finance company.

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