JPMorgan prices $750 million tap; heavy volume expected in week ahead; Credit Suisse firms

By Cristal Cody

Tupelo, Miss., Nov. 8 – JPMorgan Chase & Co. priced a $750 million reopening of its 2.739% 11-year fixed-to-floating rate senior notes on Friday ahead of the long holiday weekend.

Elsewhere, market focus turned to heavy supply expected in the short week ahead with a multiple-tranche bond offering anticipated from AbbVie Inc., sources report.

AbbVie continued a second day of investor calls on Friday for a Rule 144A and Regulation S private offering of senior notes (Baa2/A-/) that is expected to total as much as $30 billion.

The proceeds will be used to fund AbbVie’s acquisition of Allergan plc.

BofA Securities, Inc., Barclays and Morgan Stanley & Co. LLC are the lead managers.

A bond deal also is expected from toy and game maker Hasbro, Inc. (Baa1/BBB+/BBB-), which held fixed income investor calls on Thursday ahead of its $4 billion all-cash acquisition of Entertainment One Ltd., according to a market source.

BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

About $45 billion to $50 billion of issuance is being eyed to price in the upcoming week, sources said.

The bond markets will be closed on Monday for the Veterans Day holiday.

High-grade issuers priced more than $21 billion of notes this past week, compared to about $25 billion to $30 billion of supply forecast.

Meanwhile, flows to the high-grade space, including corporate, agencies, Treasuries and mortgage bonds, rose to $3.71 billion from $3.07 billion for the week ended Wednesday, Yuri Seliger, a credit strategist with BofA Merrill Lynch, said in a research note released Friday.

Most of the increase was from short-term high-grade that saw inflows jump to $2.11 billion from $1.5 billion in the prior week.

Excluding short-term inflows edged up to $1.6 billion from $1.57 billion.

Inflows to high-grade funds climbed to $3.07 billion this past week from $1.62 billion, while inflows to ETFs declined to $640 million from $1.45 billion.

Overall flows to the fixed income space declined to $4.22 billion this week from $6.04 billion in the previous week. The decline was on the back of government bond outflows and was “partially offset by stronger inflows to high grade and high yield,” Seliger said.

The Markit CDX North American Investment Grade 33 index closed Friday modestly softer at a spread of 51.4 basis points.

In the secondary market, JPMorgan’s reopened notes were flat at 100 bps bid, a source said.

Credit Suisse AG, New York Branch’s $2 billion of 2.1% senior notes due Nov. 12, 2021 priced at the start of week tightened 10 bps in secondary trading.

New energy bonds priced this week traded mostly tighter, according to market sources.

Consolidated Edison Co. of New York, Inc.’s 3.7% debentures due Nov. 15, 2059 improved 8 bps on the bid side.

Existing energy bonds were unchanged to about 3 bps softer on the day, a source said.

JPMorgan reopens notes

JPMorgan Chase priced a $750 million add-on to its 2.739% fixed-to-floating rate senior notes due Oct. 15, 2030 (A2/A-/AA-) on Friday at a spread of Treasuries plus 100 bps, according to a market source.

The notes convert after the first 10 years to a floating rate of SOFR plus 151 bps.

J.P. Morgan Securities LLC was the bookrunner.

JPMorgan Chase originally priced $3 billion of the notes on Sept. 5 at par to yield a spread of Treasuries plus 118 bps.

The financial services firm is based in New York.

Credit Suisse tightens

Credit Suisse, New York Branch’s 2.1% senior notes due Nov. 12, 2021 (A1/A+) firmed to 42 bps bid, 40 bps offered in the secondary market, a source said.

The notes priced on Monday in a $2 billion offering at 99.988 to yield 2.106% and a spread of Treasuries plus 52 bps.

The New York branch is part of Zurich-based financial services company Credit Suisse Group AG.

ConEd of New York firms

Consolidated Edison of New York’s 3.7% debentures due Nov. 15, 2059 (A3/A-/A-) were quoted Friday in the secondary market at 132 bps bid, 130 bps offered, a source said.

The company sold $600 million of the bonds on Tuesday at a spread of 140 bps over Treasuries, or 99.111 to yield 3.743%.

The electric utility is a subsidiary of New York City-based Consolidated Edison, Inc.

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