JPMorgan, Citi price deals; International Development, Japan Finance, DTE to offer notes

By Cristal Cody

Tupelo, Miss., April 16 – Financial paper made up the bulk of investment-grade supply on Monday with deals from JPMorgan Chase & Co. and Citigroup Inc.

JPMorgan Chase priced $4.5 billion of notes in three tranches.

Citigroup sold $2 billion of 11-year fixed-to-floating-rate notes.

Delta Air Lines Inc. also was marketing four tranches of notes.

Heavier supply is expected over the week after light volume in the previous week.

Syndicate sources forecast about $25 billion to $30 billion to as much as $35 billion of high-grade bond issuance.

Coming up on Tuesday, the International Development Association plans to price an inaugural benchmark-sized offering of five-year notes.

Also, Japan Finance Organization for Municipalities is marketing five-year global medium-term notes.

Elsewhere, DTE Electric Co. plans a round of fixed-income investor calls for a bond deal on Tuesday.

Additional bank supply is likely on the heels of the release of first quarter earnings, according to market sources. Both Citigroup and JPMorgan announced earnings on Friday.

“We expect this round of bank issuance to be heavier than the $18.4 [billion] average in April from 2015 to 2017,” BofA Merrill Lynch analysts said in a research note released on Monday. “On the other hand, the industrial calendar should be fairly quiet as most companies remain in earnings-related blackouts.”

The Markit CDX North American Investment Grade 30 index firmed about 2 basis points to end the day at a spread of 59 bps.

JPMorgan sells three tranches

JPMorgan Chase priced a $4.5 billion three-part offering of notes during the session, according to a market source.

The company sold $500 million of six-year floaters at Libor plus 73 bps, $1.75 billion of 3.559% six-year fixed-rate notes at a spread of 88 bps over Treasuries and $2.25 billion of 4.005% 11-year notes at a spread of Treasuries plus 118 bps.

J.P. Morgan Securities LLC was the bookrunner.

The New York-based financial services firm plans to use the proceeds for general corporate purposes.

Citigroup prices $2 billion

Citigroup (Baa1/BBB+/A) came with $2 billion of 4.075% fixed-to-floating-rate notes due April 23, 2029 on the tight side of guidance at a spread of Treasuries plus 125 bps, according to a market source.

The notes will convert to a floating rate of Libor plus 119.2 bps after the initial fixed-rate period.

Citigroup Global Markets Inc. was the bookrunner.

Citigroup is a financial services company based in New York.

International Development sets talk

Looking ahead to Tuesday’s deal pipeline, International Development Association (Aaa/AAA) plans to bring an inaugural benchmark-sized offering of notes due April 24, 2023, according to a market source.

The notes were initially talked on Monday to price with a spread in the mid-swaps plus 10 bps area.

Barclays, BNP Paribas Securities Corp., Nomura Securities International, Inc. and J.P. Morgan Securities are the lead managers of the Regulation S and Rule 144A deal.

International Development Association is a Washington, D.C.-based association that provides loans and advice to middle-income and credit-worthy poor countries.

Japan Finance eyes notes

Japan Finance Organization for Municipalities (A1/A+) also is marketing five-year global medium-term notes in a Rule 144A and Regulation S offering, a source said.

The notes due April 24, 2023 were initially talked to price with a spread in the mid-swaps plus 50 bps area.

BofA Merrill Lynch, Barclays, Daiwa Securities Co. Ltd. and Mizuho Securities USA Inc. are the bookrunners.

The Japan Finance Organization for Municipalities is a Tokyo-based funding organization for Japanese local governments.

DTE Electric arranges calls

Also on Tuesday, DTE Electric plans to hold fixed-income investor calls for a dollar-denominated green bond offering of senior secured notes (Aa3/A/A+), according to a market source.

BofA Merrill Lynch, BNP Paribas Securities, Barclays and TD Securities (USA) LLC are the arrangers.

The electric utility is a subsidiary of Detroit-based DTE Energy Co.

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