Primary flooded; EIB, Toyota, CBS price; AT&T, Verizon bonds mixed; Bank of America soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 7 – The investment-grade bond market roared to life on Wednesday, following a slower start to the new year.

Thirteen issuers brought to market $15.6 billion of new paper during the active session.

“The market was very strong today, so [issuers] took advantage,” one source said.

The European Investment Bank brought to market the day’s largest offering, pricing $4 billion of five-year notes in line with price talk.

CBS Corp. sold both tranches of its new $1.2 billion offering around 20 basis points tight of the midpoint of initial guidance.

Meanwhile, General Motors Financial Co., Inc. sold $2.25 billion of split-rated senior notes in two parts.

There was also a $2 billion offering of notes priced by Inter-American Development Bank and a $1 billion issue sold by KommuneKredit.

Toyota Motor Credit Corp. priced $1.75 billion of three-year senior notes in fixed- and floating-rate tranches.

The session also saw MetLife Global Funding I, Rabobank Nederland and Santander Holdings USA Inc. each price $1 billion offerings.

Ventas Realty, LP attracted solid demand for its new $900 million offering, garnering an orderbook that was more than five times oversubscribed.

Air Lease Corp. and TransCanada PipeLines Ltd. were each in the market with upsized offerings on Wednesday.

The day also saw Reliance Standard Life Global Funding II sell $400 million of five-year notes, though details of the sale were unavailable at press time.

Fannie Mae and Corporate Capital Trust Inc. joined the forward calendar during the session, with Fannie Mae setting price talk for a planned offering of Benchmark Notes and Corporate Capital announcing investor meetings.

With the deluge of issuance seen on Wednesday, the investment-grade bond market’s total has already topped what was predicted to be around a $25 billion week.

Investment-grade bonds were mixed over the session, though market tone improved, sources said.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 71 bps.

AT&T Inc.’s bonds (A3/A-/A) traded flat to softer in the secondary market, a source said.

Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) were mixed in secondary trading, a market source said.

Bank of America Corp.’s 4% notes due 2024 traded 2 bps weaker during the day, according to a market source.

EIB brings $4 billion

The European Investment Bank priced $4 billion of 1.625% five-year notes (Aaa/AAA/AAA) at mid-swaps plus 2 bps, according to a market source.

The notes sold in line with price talk.

Pricing was at 99.724 to yield 1.681%.

Deutsche Bank, Goldman Sachs and HSBC Securities are running the books.

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

GM sells crossovers

General Motors Financial priced $2.25 billion of split-rated senior notes (expected ratings Ba1/BBB-/BB+) in a quick-to-market Wednesday transaction, according to a market source.

The deal included a $1 billion tranche of 3.15% five-year fixed-rate notes, which priced at a 170 bps spread to Treasuries. The spread came at the tight end of spread talk in the Treasuries plus 175 bps area; initial guidance was 190 bps. The reoffer price was 99.88, and the notes yield 3.176%.

In addition the company priced a $250 million tranche of five-year floating-rate notes at par to yield Libor plus 156 bps. The Libor spread came inside of spread talk in the Libor plus 175 bps area.

The $1 billion long tranche came in the form of 4% 10-year fixed-rate notes, which priced with a 210 bps spread to Treasuries, at the tight end of spread talk in the Treasuries plus 215 bps area; initial guidance was 220 bps. The 10-year notes came at a reoffer price of 99.478 and yield 4.064%.

The company was targeting an overall transaction size of $1.5 billion to $2 billion, according to a market source.

Citigroup Global Markets Inc., Barclays, Credit Agricole CIB, Credit Suisse Securities (USA) LLC and RBS Securities Inc. were the lead bookrunners for the deal, which priced on the investment-grade desk.

The Fort Worth-based finance subsidiary of General Motors Co. plans to use the proceeds for general corporate purposes.

IADB new issue

Inter-American Development Bank priced $2 billion of 2.125% 10-year notes (Aaa/AAA/) on Wednesday at mid-swaps plus 9 bps, according to a market source.

Pricing was at 99.571.

The bookrunners were Citigroup Global Markets, J.P. Morgan Securities LLC and Nomura.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

Toyota sells $1.75 billion

Toyota Motor Credit priced $1.75 billion of three-year senior medium-term notes, series B, (Aa3/AA-/) in two tranches, according to two FWP filings with the Securities and Exchange Commission.

The sale included $500 million of floating-rate notes priced at par to yield Libor plus 32 bps and $1.25 billion of 1.45% notes sold at 99.863 to yield 1.497%, or Treasuries plus 53 bps.

The notes sold at the tight end of talk.

Proceeds will be used for general corporate purposes.

The bookrunners were BNP Paribas Securities Corp., Citigroup Global Markets, BofA Merrill Lynch and Morgan Stanley & Co. LLC.

The funding arm of auto manufacturer Toyota is based in Torrance, Calif.

CBS prices tight

CBS priced a $1.2 billion two-part issue of senior notes (Baa2/BBB/) in 10- and 30-year tranches on Wednesday, according to a market source.

The sale included $600 million of 3.5% notes due 2025 priced at 160 bps over Treasuries.

The notes sold at 99.033 to yield 3.616%.

There was also $600 million of 4.6% senior notes due 2045 sold at 98.701 to yield 4.681% with a spread of Treasuries plus 215 bps.

Citigroup Global Markets, JPMorgan, Morgan Stanley and Wells Fargo Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes.

The deal is guaranteed by CBS Operations Inc.

CBS is a broadcasting company based in New York.

KommuneKredit three-years

KommuneKredit priced $1 billion of 1.125% three-year notes (Aaa/AAA/) on Wednesday at 99.96 to yield mid-swaps plus 3 bps, a market source said.

The bookrunners were BNP Paribas Securities, Citigroup Global Markets, Credit Suisse Securities and JPMorgan.

Pricing was in line with talk.

The notes were sold via Regulation S.

KommuneKredit offers funding and leasing services to municipalities and is based in Copenhagen.

Santander bank notes

Santander Bank, a wholly owned subsidiary of Santander Holdings USA Inc., sold a $1 billion offering of three-year senior bank notes (Baa1/BBB/) on Wednesday in fixed- and floating-rate tranches, according to a source away from the trade.

A $250 million tranche of floating-rate notes sold at par to yield Libor plus 93 bps.

There was also $750 million of 2% notes sold at 115 bps over Treasuries. Pricing was at 99.644 to yield 2.123%.

Proceeds will be used for general corporate purposes.

The bookrunners were Barclays, JPMorgan and Santander.

Boston-based Santander Holdings USA is the parent company of Sovereign Bank. It is a subsidiary of Spain’s Banco Santander, SA.

Rabobank offering

Rabobank Nederland on Wednesday sold $1 billion of 2.25% five-year notes with a spread of Treasuries plus 80 bps, an informed source said.

Proceeds will be used for general corporate purposes.

The bookrunners were BofA Merrill Lynch, Citigroup Global Markets, Credit Suisse Securities and RBC Capital Markets LLC.

The financial services company is based in Utrecht, the Netherlands.

MetLife floaters

MetLife Global Funding priced $1 billion of 18-month floating-rate notes (Aa3/AA-/) at par to yield Libor plus 20 bps on Wednesday, according to an informed source.

The notes sold at the tight end of guidance, which was set in the low-20 bps area over Libor.

Pricing was done under Rule 144A and Regulation S.

BofA Merrill Lynch, Barclays, Credit Suisse Securities, Morgan Stanley and U.S. Bancorp Investments Inc. were the bookrunners.

The unit of insurance and employee benefits company MetLife, Inc. is based in New York City.

Ventas brings 10, 30-year bonds

Ventas Realty priced $900 million of senior notes (Baa1/BBB+/BBB+) on Wednesday in 10- and 30-year tranches, according to a market source and an FWP filing with the SEC.

There was $600 million of 3.5% notes due 2025 priced at 99.663 to yield 3.54%, or Treasuries plus 160 bps.

A second tranche was $300 million of 4.375% 30-year bonds priced at 99.5 to yield 4.405%.

The notes sold with a spread of Treasuries plus 190 bps.

Both tranches sold at the tight end of price talk.

The bookrunners were BofA Merrill Lynch, JPMorgan, RBC Capital Markets and TD Securities.

The notes are guaranteed by Ventas, Inc.

Proceeds will be used to repay debt under its unsecured revolving credit facility and for working capital and other general corporate purposes, including to fund a portion of the cash consideration of the company’s pending acquisition of American Realty Capital Healthcare Trust, Inc. and other future acquisitions and investments.

The real estate investment trust for housing and health-care properties is based in Chicago.

TransCanada upsizes

TransCanada PipeLines priced an upsized $750 million of senior notes (A3/A-/A) in fixed- and floating-rate tranches due Jan. 12, 2018 on Wednesday, according to a market source and an FWP filed with the SEC.

The sale included $250 million of floating-rate notes priced at par to yield Libor plus 79 bps.

The company also sold $500 million of 1.875% notes at 99.684 to yield 1.984%, or Treasuries plus 100 bps.

The notes sold at the tight end of price talk.

The combined issuance was increased from an expected $500 million.

Deutsche Bank Securities Inc. and JPMorgan were the joint bookrunners.

Proceeds will be used for general corporate purposes and to repay short-term debt.

The natural gas and oil pipeline and storage company is based in Calgary, Alta.

Air Lease seven-year notes

Air Lease priced an upsized $600 million of 3.75% seven-year senior notes (/BBB-/) at Treasuries plus 210 bps, according to an informed source and an FWP filed with the SEC.

The notes sold at the tight end of talk.

Pricing was at 99.289 to yield 3.866%.

The offering was upsized from $500 million.

BNP Paribas Securities, Citigroup Global Markets, Deutsche Bank Securities, JPMorgan, BofA Merrill Lynch, BMO Capital Markets Corp., Credit Agricole Securities (USA) Inc., Credit Suisse Securities, Fifth Third Securities Inc., Goldman Sachs, Mizuho Securities USA Inc., Morgan Stanley, RBC Capital Markets, RBS Securities, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities were the bookrunners.

Proceeds will be used general corporate purposes, which may include the purchase of commercial aircraft and the repayment of debt.

Air Lease is a Los Angeles-based aircraft leasing company.

Fannie Mae sets talk

Fannie Mae announced plans to price an offering of Benchmark Notes due Jan. 21, 2020, according to a company news release.

The issue is talked in the 14.5 bps area over Treasuries and is expected to price on Thursday.

The settlement date is Jan. 12.

Barclays, Deutsche Bank Securities and JPMorgan are the joint lead managers.

The co-managers include CastleOak Securities LP, Daiwa Capital Markets America Inc., FTN Financial Capital Markets, Loop Capital Markets and Multi-Bank Securities Inc.

The government-backed mortgage lender is based in Washington, D.C.

Corporate Capital roadshow

Corporate Capital Trust has mandated Barclays, JPMorgan and BofA Merrill Lynch to arrange a series of investor meetings ahead of a possible capital markets transaction subject to market conditions, according to a 497AD filed with the SEC.

The telephonic meetings will be held on Jan. 12, Jan. 13 and Jan. 14.

Corporate Capital Trust is an Orlando, Fla.-based business development company.

AT&T bonds mixed

AT&T’s 3.9% notes due 2024 (A3/A-/A) were unchanged on the day at 142 bps bid, a market source said.

AT&T sold $1 billion of the notes on March 5 at a spread of Treasuries plus 125 bps.

The company’s tranche of 6.55% bonds due 2039 eased 9 bps to 226 bps bid on Wednesday, according to a source.

AT&T sold $2.25 billion of the bonds on Jan. 29, 2009 at Treasuries plus 300 bps.

The telecommunications company is based in Dallas.

Verizon flat to softer

Verizon’s 4.15% notes due 2024 traded flat at 162 bps offered, according to a market source.

Verizon sold $1.25 billion of the notes on March 10 at Treasuries plus 140 bps.

The tranche of 6.25% bonds due 2037 widened 5 bps to 186 bps bid over the session, a source said.

Verizon sold $750 million of the bonds in 2007.

The telecommunications company is based in New York City.

Bank of America eases

Bank of America’s 4% notes due 2024 (Baa2/A-/A) eased 2 bps to 142 bps bid, 10 bps wider than on Monday, according to a market source.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at a spread of Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

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