Capital One, Sabal, Toyota sell notes; strong May supply forecast; Amazon.com firms

By Cristal Cody

Tupelo, Miss., April 26 – A handful of issuers tapped the high-grade primary market on Thursday with supply thinning as April comes to a close.

Capital One Financial Corp. sold $2 billion of senior notes in two tranches.

Sabal Trail Transmission LLC came with a $1.5 billion three-part offering of senior notes following fixed-income investor calls held Tuesday.

Also, Toyota Motor Credit Corp. priced $150 million of seven-year floating-rate medium-term notes.

More than $23 billion of high-grade bonds have priced over the week.

Heavy deal volume is expected in May with one syndicate source forecasting as much as $140 billion of new issuance for the month ahead.

The Markit CDX North American Investment Grade 30 index firmed more than 1 basis point over the day to end at a spread of 60 bps.

In the secondary market, Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027 tightened 6 bps after the company announced better-than-expected first quarter earnings on Thursday.

In other secondary trading, CVS Health Corp.’s new senior notes (Baa1/BBB+) were mixed.

Capital One prices $2 billion

Capital One Financial priced $2 billion of senior notes (Baa1/BBB/A-) in two tranches at guidance on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.

Capital One sold $1.25 billion of 3.45% three-year notes at 99.912 to yield 3.481%, or a spread of Treasuries plus 85 bps.

The company placed $750 million of 4.25% seven-year notes at 99.994 to yield 4.251%. The notes priced with a Treasuries plus 130 bps spread.

The deal had a final book size of $3.75 billion.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Capital One Securities Inc. were the bookrunners.

Capital One is a McLean, Va.-based financial services company.

Sabal Trail sells $1.5 billion

Sabal Trail Transmission sold $1.5 billion of senior notes (Baa1//BBB+) in three tranches during the session, according to a market source.

The company sold $500 million of 4.246% 10-year notes at a spread of Treasuries plus 125 bps, on the tight side of guidance in the Treasuries plus 130 bps area.

Sabal priced $600 million of 4.682% 20-year notes with a Treasuries plus 150 bps spread. The notes were talked to price with a spread in the Treasuries plus 155 bps area.

In the final tranche, the company sold $400 million of 4.832% 30-year bonds at a spread of 165 bps over Treasuries, compared to guidance in the Treasuries plus 170 bps spread area.

Barclays, Citigroup Global Markets Inc., Mizuho Securities USA LLC and MUFG were the bookrunners.

Sabal Trail Transmission is a natural gas pipeline in Alabama, Georgia and Florida and a joint venture of Spectra Energy Partners LP, NextEra Energy, Inc. and Duke Energy Corp.

Toyota sells floaters

Toyota Motor Credit priced $150 million of floating-rate medium-term notes due May 2, 2025 (Aa3/AA-/) on Thursday at par to yield Libor plus 67 bps, according to an FWP filing with the SEC.

Citigroup Global Markets was the bookrunner.

Toyota Motor Credit is a Torrance, Calif.-based financing arm and subsidiary of Toyota Motor Corp.

Amazon.com tightens

Amazon.com’s 3.15% notes due Aug. 22, 2027 (Baa1/AA-/) tightened 6 bps during the session to 78 bps bid, a source said.

Amazon.com sold $3.5 billion of the notes on Aug. 15, 2017 at a spread of Treasuries plus 90 bps.

The retailer and online commerce company is based in Seattle.

CVS mixed

In the secondary market, CVS Health’s 4.3% senior notes due March 25, 2028 were flat on the day at 148.1 bps bid, according to a market source.

The company sold $9 billion of the 10-year notes on March 6 a spread of Treasuries plus 160 bps.

The company’s 5.05% notes due March 25, 2048 firmed about 1 bp to 179 bps bid.

CVS Health priced $8 billion of the notes in the March 6 offering at a Treasuries plus 195 bps spread.

The company’s bonds have been among the most actively traded investment-grade issues over the past few sessions.

The retail pharmacy chain and pharmacy benefits manager is based in Woonsocket, R.I.

Funds at $2 billion

Investment-grade corporate funds yet again saw an inflow, this time for $2.010 billion, according to fund-flow statistics generated by AMG Data Services Inc.

That followed a gain of $1.535 billion the previous week and $3.346 billion the week before that, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

The IG funds have now seen seven straight inflows.

Apart from the Feb. 14 and Feb. 21 weeks, every week so far this year has seen positive flows and in fact before those two weeks in February investment-grade corporates saw a 21-week run of inflows dating back to mid-September, according to a Prospect News analysis of the data.

The latest gain raises the year-to-date inflow for the IG corporates to $38.03 billion from $36.02 billion, once again setting a new peak level for the year so far.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.