ProLogis sells bonds; more U.S. corporate deals seen in coming week; spreads tighten

By Aleesia Forni and Andrea Heisinger

New York, Oct. 12 - There was a deal priced early on Friday by ProLogis International Funding II SA, capping a short week that was low on corporate deals.

ProLogis sold $300 million of notes due 2020 two days after the offering was announced.

Between $9 billion and $10 billion of new bonds were sold in the past week, which was below some estimates of issuance in the $15 billion area.

It's possible that the coming week could see a bump in issuance since banks and other corporates are coming out of earnings blackout.

JPMorgan Chase & Co. and Wells Fargo & Co. each announced third-quarter earnings on Friday morning.

More big banks will report earnings in the coming week, and because of this, there won't be much for financials in the market, a source said late on Friday.

"We should see more corporates, more domestic [names]," the source said, adding that Yankee issuers will not be as much of a presence.

Volume should be in the "$15 billion realm," said a syndicate source at a large desk.

"There should be a little more than this week. Probably more Tuesday, but definitely frontloaded."

The Markit CDX Series 18 North American Investment Grade index widened 1 bps to a spread of 98 bps on Friday.

"Everything's better today," one trader said, as spreads were seen tighter overall.

Investment-grade bank and brokerage credit default swaps costs were mostly tighter on Friday.

Bank of America's CDS costs rose 1 bps to 161 bps bid, 166 bps offered. Citi's CDS costs were unchanged at 158 bps bid, 163 bps offered. J.P. Morgan's CDS costs were also unchanged at 115 bps bid, 120 bps offered.

Brokers were tighter. Merrill Lynch's CDS costs were 5 bps tighter at 153 bps bid, 163 bps offered. Morgan Stanley's CDS costs tightened 1 bps to 225 bps bid, 230 bps offered. Goldman Sachs' CDS costs rose 2 bps to 178 bps bid, 183 bps offered.

ProLogis' $300 million

ProLogis International Funding has priced $300 million of 4.875% notes due 2020 to yield 5%, an informed source said.

The notes (Baa3/BBB-/BBB-) were sold at a spread of Treasuries plus 391.6 basis points.

Pricing was done under Rule 144A and Regulation S without registration rights. The bonds are guaranteed by ProLogis European Properties Fund.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc. and RBS Securities Inc.

The unit of the real estate investment trust for industrial properties is based in Denver.

© 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.