PepsiCo sells $2.5 billion; CNA faces pushback; PepsiCo existing bonds soften; Coke flat

By Aleesia Forni and Cristal Cody

New York, Feb. 19 – PepsiCo Inc. and CNA Financial Corp. sold new high-grade bond issues to close the week on Friday, though the two deals received decidedly different receptions from investors.

PepsiCo saw spreads on its new $2.5 billion four-part new issue firm 15 basis points to 20 bps from initial price thoughts. The deal attracted a book that was more than three times oversubscribed.

CNA Financial, meantime, was forced to trim the size of its new issue to $400 million from $500 million.

The deal also sold around 15 bps outside of initial price guidance.

A market source noted that the deal’s struggle was more credit-specific than an indication of the market’s tone, adding that the market was still looking strong for the most part.

The day’s new deals closed what had been an otherwise solid week for the high-grade space, with more than $47 billion of new paper pricing during the week shortened by the extended Presidents Day holiday weekend.

Sources are preparing for what could be another “huge” week ahead, with around $30 billion of new issuance forecasted.

Investment-grade credit spreads ended the day weaker. The Markit CDX North American Investment Grade index closed 1 bp wider at a spread of 118 bps.

In the secondary market, PepsiCo’s existing bonds traded 2 bps to 6 bps weaker on the day.

Coca-Cola Co.’s 2.875% senior notes due 2025 were unchanged.

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