Wells Fargo, Oglethorpe among day’s bond issuers; Wells Fargo firms; Citigroup improves

By Cristal Cody

Eureka Springs, Ark., April 15 – Friday turned into a busy session with new high-grade bond deals priced from Wells Fargo & Co., Oglethorpe Power Corp., Sierra Pacific Power Co. and Nordic Investment Bank, bringing the week’s volume to nearly $24 billion.

Wells Fargo tapped the primary market with a $3 billion offering of 3% 10-year senior notes.

Oglethorpe Power sold $250 million of 4.25% 30-year first mortgage bonds.

Sierra Pacific Power priced $400 million of 2.6% 10-year general and refunding mortgage notes.

Nordic Investment Bank brought to market $500 million of two-year floating-rate global notes.

High-grade issuers are expected to price about $30 billion of bonds in the upcoming week, a source said.

Wells Fargo’s new notes headed out 2 basis points tighter in aftermarket trading.

In other secondary trading, Citigroup Inc.’s 4.6% subordinated notes due 2026 traded 5 bps better after the company reported a drop in first-quarter profit and revenue on Friday.

The Markit CDX North American Investment Grade index ended the day 1 bp weaker at a spread of 80 bps.

Wells Fargo prices $3 billion

Wells Fargo priced $3 billion of 3% 10-year senior notes on Friday at 99.657 to yield 3.04%, according to an FWP filing with the Securities and Exchange Commission.

The notes priced with a spread of 130 bps over Treasuries.

The notes traded 2 bps tighter at 128 bps offered in the secondary market, a trader said.

Wells Fargo Securities, LLC was the bookrunner.

San Francisco-based Wells Fargo provides retail, commercial and corporate banking services.

Oglethorpe Power taps market

Oglethorpe Power priced $250 million of 4.25% 30-year first mortgage bonds at 98.37 to yield 4.348% on Friday, according to an FWP filing with the SEC.

The series 2016A bonds priced with a spread of 180 bps over Treasuries.

MUFG, Mizuho Securities USA Inc. and RBC Capital Markets LLC were the bookrunners.

Proceeds will be used for the long-term financing of about $115 million of carrying costs related to the Smith Energy Facility incurred from 2011 through 2015 and about $105 million of expenditures related to interest rate options purchased to mitigate exposure for borrowings related to Vogtle Units No. 3 and No. 4. In addition, proceeds will be used for the long-term financing of about $30 million of expenditures related to the construction of Vogtle Units No. 3 and No. 4.

Oglethorpe Power is an electric supply cooperative based in Tucker, Ga.

Sierra Pacific prices

Sierra Pacific Power sold $400 million of 2.6% series U general and refunding mortgage notes due May 1, 2026 on Friday, according to an 8-K filing with the SEC.

The company may redeem the notes before Feb. 1, 2026 at a price equal to the greater of 100% of the principal amount being redeemed or the make-whole amount, plus accrued and unpaid interest.

On or after Feb. 1, 2026, the company may redeem the notes at par plus accrued and unpaid interest.

The deal was exempt from U.S. securities registration requirements.

Sierra Pacific Power plans to use the proceeds from the offering along with available cash to pay the $450 million outstanding of 6% series M general and refunding mortgage notes due on May 15, 2016.

The Reno, Nev.-based company is a subsidiary of NV Energy, Inc. and an indirect subsidiary of Berkshire Hathaway Energy Co.

Nordic Investment Bank prices

Nordic Investment Bank sold $500 million of two-year floating-rate global notes at par to yield Libor plus 5 bps on Friday, according to an FWP filing with the SEC.

HSBC Bank plc and Merrill Lynch International were the lead managers.

Nordic Investment Bank is an international financial institution owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.

Citigroup stronger

Citigroup’s 4.6% subordinated notes due 2026 traded 5 bps tighter on Friday at 245 bps bid, a market source said.

Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on March 1 at a spread of Treasuries plus 280 bps.

The banking and financial services company is based in New York.

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