Commonwealth Bank of Australia prices $1.25 billion notes; Japan Bank, EIB eye deals

By Cristal Cody

Tupelo, Miss., July 9 – Corporate high-grade issuance stayed quiet again on Monday, while the Commonwealth Bank of Australia came with $1.25 billion of five-year covered notes.

Credit spreads tightened during the session.

The Markit CDX North American Investment Grade 30 index firmed about 2 basis points to a spread of 62 bps.

Corporate supply is expected to resume this week after no issuance last week and less than $5 billion of volume in the prior week, sources report.

Coming up on Tuesday, Japan Bank for International Cooperation plans to price three tranches of guaranteed bonds that are registered with the Securities and Exchange Commission. Price talk emerged on the notes on Monday.

Also on Tuesday, the European Investment Bank is expected to bring a benchmark-sized dollar-denominated offering of five-year global notes to the primary market.

Syndicate sources forecast about $15 billion to $20 billion of volume for the week.

Market participants are looking toward Friday when corporate earnings releases begin with the expectations for additional issuance of paper.

Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. all release second quarter earnings results on Friday.

The pace of earnings reporting picks up to 68 issuers during the week of July 16, with financials accounting for 56% of the total, according to a BofA Merrill Lynch note released on Monday. Earnings releases by industrial companies will peak the week of July 23, followed by utilities over the week of July 30.

CommBank prices $1.25 billion

Commonwealth Bank of Australia (Aa2/AA-/AA-) priced $1.25 billion of 3.25% five-year notes during the session at a spread of mid-swaps plus 40 bps, or 55.02 bps over Treasuries, according to a market source.

The notes were initially talked to price in the mid-swaps plus low 40 bps area.

Commonwealth Bank of Australia, Goldman Sachs & Co., RBC Capital Markets, LLC and TD Securities (USA) LLC were the bookrunners.

The bank and financial services company is based in Sydney.

Japan Bank talks notes

Japan Bank for International Cooperation’s offering of guaranteed bonds (A1/A+/) expected to price on Tuesday includes three tranches, according to a market source.

The notes due July 20, 2021 were initially talked to price in the mid-swaps plus 28 bps area, while the tranche of notes due July 20, 2023 were talked in the mid-swaps plus 40 bps area.

The notes due July 20, 2028 were initially talked to price with a spread in the mid-swaps plus 43 bps area.

BofA Merrill Lynch, Barclays, Mizuho Securities USA Inc. and Nomura International plc are the bookrunners.

The notes will be guaranteed by Japan.

The financial institution is based in Tokyo.

EIB eyes benchmark deal

The European Investment Bank (Aaa/AAA/AAA) is marketing a benchmark-sized dollar-denominated offering of five-year global notes to price on Tuesday, a source said.

The notes due Aug. 15, 2023 were initially talked to price in the mid-swaps plus 8 bps area.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and TD Securities are the lead managers.

The lender for the European Union is based in Kirchberg, Luxembourg.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.