JPMorgan sells in two parts alongside LeasePlan; Rentenbank plans offer; JPMorgan notes firm

By Aleesia Forni and Andrea Heisinger

New York, Oct. 15 - The high-grade bond market got off to a sluggish start on Monday with offerings pricing from JPMorgan Chase & Co. and LeasePlan Corp. NV.

JPMorgan was in the market for the second time in a month, pricing $2.85 billion of notes in two tranches after announcing earnings on Friday.

Netherlands-based LeasePlan sold $500 million of five-year notes via Rule 144A and Regulation S.

A sale of seven-year notes was announced by Germany's Landwirtschaftliche Rentenbank, with pricing expected on Tuesday.

Another sale expected for Tuesday comes from Province of British Columbia, which is planning a benchmark size sale of 10-year notes.

Citigroup announced third-quarter earnings that were better than expected ahead of the open.

"I think that helped a little bit," a source said of the tone. "I think it maybe bumped JPMorgan's spread in."

Bank spreads were improved overall after Citi's announcement.

The primary isn't expected to get any more exciting on Tuesday, despite predictions of a $15 billion week.

"I'm hearing it should be pretty much the same as today," a market source said after the close, "maybe one or two deals."

The Markit CDX Series 18 North American Investment Grade index tightened 2 basis points to a spread of 96 bps on Friday, while the secondary market saw the new fixed-rate notes from JPMorgan tighten 1 bps near the end of the session.

JPMorgan prices tight

JPMorgan Chase priced $2.85 billion of senior notes (A2/A/A+) in two tranches, a market source told Prospect News.

The sale included $600 million of three-year floaters priced at par to yield Libor plus 66 bps. This was tighter than talk in the Libor plus 69 bps area.

A second part was $2.25 billion of 1.1% three-year notes sold at a spread of Treasuries plus 77 bps. The notes priced below guidance in the 80 bps area.

A trader quoted the notes at 76 bps bid, 74 bps offered late in the day.

J.P. Morgan Securities LLC was bookrunner.

JPMorgan last priced bonds in a $3 billion sale of 10-year notes on Sept. 19. The bank's last sale of three-year fixed-rate notes and floaters totaled $2 billion on March 14. The 1.875% three-year notes sold at 130 bps over Treasuries, while the floaters were priced at Libor plus 105 bps.

The financial services company is based in New York City.

LeasePlan's $500 million

LeasePlan Corp. priced a $500 million offering of 3% five-year notes at a spread of 235 bps over Treasuries, a source close to the sale said.

There was about $2.25 billion on the books for the trade, the source added.

Price talk on the notes (Baa2/BBB+/A-) was in the Treasuries plus 250 bps area.

The sale was done under Rule 144A and Regulation S.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC were bookrunners.

The financial institution specializing in car fleet management is based in Almere, The Netherlands.

British Columbia 10-years

The Province of British Columbia (Aaa/AAA/AAA) plans to sell a minimum of $500 million in an offering of 10-year notes talked in the mid-swaps plus low-30 bps area, a bond source said.

The deal is expected to price on Tuesday.

HSBC Capital (Canada) Inc., Scotia Capital Inc., CIBC World Markets Inc. and National Bank Financial Inc. are the lead managers.

Rentenbank talks seven-years

Landwirtschaftliche Rentenbank announced a benchmark size sale of seven-year notes, with pricing expected Tuesday, an informed source said.

The notes (Aaa/AAA/AAA) are being talked in the mid-swaps plus 25 bps area.

Bookrunners are Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC.

Proceeds will be used to finance lending activities.

The German development agency for agribusiness is based in Frankfurt.

Cristal Cody contributed to this review

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