Home Depot's $1 Billion Bond Priced

Home Depot's $1 Billion Bond Priced - Source

Home Depot Inc.'s (HD) $1 billion bond has priced, according to a person familiar with the deal.

The $500 million 10-year tranche sold at 135 basis points over Treasurys to yield 2.626% and the $500 million 30-year tranche sold at 175 basis points over Treasurys to yield 3.67%, the person said.

Burlington Northern Santa Fe LLC's $750 million two-part bond has also priced, according to a person familiar with the matter.

The $250 million 10-year tranche sold at 100 basis points over Treasurys to yield 3.616% and the $500 million 30-year part sold at 140 basis points over Treasurys to yield 5.074%.

These bonds are some of several new investment-grade bonds flooding the market Tuesday, with Dell Inc. (DELL) and other top-rated companies issuing more than $9 billion in debt--exceeding the total of $5.35 billion in all of September last year.

Companies were able to take advantage of low interest rates because investors had few savory alternatives: stock market volatility spiked on renewed concern about the health of Europe's biggest banks and yields on money markets and government debt are plumbing record lows.

"Interest rates are low, we got past the payroll numbers on Friday and everyone is chasing yields," said Patrick Sporl, a senior portfolio manager at American Beacon Advisors in Fort Worth, Texas.

Tuesday was especially busy because this week--the first after the unofficial end of summer--includes two holidays: Labor Day on Monday and Rosh Hashana, the Jewish New Year, starting Wednesday at sundown. "The calendar is such that we have a lot of deals," Sporl said. In a holiday-shortened week, he added, issuers are keen to sell bonds sooner rather than later.

Dell was selling a $1.5 billion deal, as were the Canadian Imperial Bank of Commerce (CM, CM.T) and insurer AON Corp. (AON). Home Depot's sale was its first bond sale since 2006, Medco Health Solutions Inc. (MHS) and soft-drinks bottler International CCE both were also selling $1 billion in debt.

Canadian Imperial Bank of Commerce's three-year note has launched, according to a person familiar with the matter, and is due to price later Tuesday. It is rated Aa2/A+/AA- and launched at 75 basis points over Treasurys. Barclays Capital, Citigroup Inc., JP Morgan Chase & Co. and CIBC are leading the sale.

International CCE's $1 billion bond has also launched, according to a person familiar with the matter. The 10-year $525 million tranche launched at 100 basis points over Treasurys and the five-year $475 million portion launched at 80 basis points over Treasurys. The bond will price later Tuesday.

Also Tuesday, France Telecom's $750 million bond has priced, according to a person familiar with the matter.

The bond sold at 82 basis points over Treasurys, to yield 2.238%.

Allergan Inc. (AGN) was in the market with a $650 million 10-year note and Hospira Inc. (HSP) with a $500 million 30-year bond.

Societe General (SCGLY, GLE.FR) and Province of Ontario had benchmark notes, Health Care REIT Inc. (HCN) had a $450 million seven-year note and Parker Hannifin Corp. (PH) had a $300 million note.

-By Anusha Shrivastava, Dow Jones Newswires; 212-416-2227; anusha.shrivastava@dowjones.com

Parker Hannifin (NYSE:PH)
Historical Stock Chart
From May 2024 to Jun 2024