Investor appetite for new deals enabled another fistful of companies to tap the high-grade bond markets Tuesday.
Seven companies borrowed a combined $6 billion, following a $6.35 billion session Monday.
Dutch lender Rabobank led the session with a $2.5 billion issue of three- and five-year notes, while Maryland media company Discovery Communications Inc. ( DISCA, DISCB, DISCK) sold a $1.2 billion deal made up of 10-year and 30-year bonds. Other deals ranged from $250 million to $650 million.
Bank bonds have outperformed other investment-grade sectors this year as investors reach for yield and get more comfortable with the health of the financial sector. Bonds from Rabobank, considered especially safe among the world's largest financial institutions, carry ratings of AA-minus from Moody's Investors Service and Aa2 from Standard & Poor's Rating Services.
Rabobank was on track to sell three-year notes that pay a floating interest rate of 0.60 percentage point above the three-month London interbank offered rate, or Libor, an industry benchmark. It is expected to sell fixed-rate bonds due in five years at a yield of one percentage point more than Treasurys.
Discovery's bond issue was met with enough demand that it increased the size of the deal to $1.2 billion, up from $1 billion in early term sheets. It also cut the offered yield by 0.05 percentage point on each tranche. The 10-year bonds were priced to yield 3.269% and the 30-year bonds were priced to yield 4.882%.
Southern Co. (SO) electricity unit Georgia Power Co. also received robust demand for its two-part issue of three-year floating-rate notes and 30-year bonds. The deal, originally set for $450 million, was increased to $650 million. The floating-rate notes offer 0.32 percentage point over Libor, while the 30- year bonds offer 4.339%.
FirstEnergy Corp. (FE) unit Metropolitan Edison Co., another electric provider, sold $300 million of 10-year bonds yielding 3.517%.
The Georgia and MetEd bonds bring the number of utility providers to tap the market this week to five.
Timothy Cox, executive director of debt capital markets at Mizuho Securities USA Inc., said utility companies had to file their annual reports last month, and now "it's off to the races."
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(END) Dow Jones Newswires 03-12-13 1742ET Copyright (c) 2013 Dow Jones & Company, Inc.