HSBC, UBS, MetLife continue stream of bonds from financials; bond spreads flat; HSBC firms

By Andrea Heisinger and Cristal Cody

New York, March 27 - Activity remained steady in the investment-grade primary market on Tuesday with deals from Health Care REIT, Inc., HSBC Holdings plc, MetLife Global Funding II, UBS AG, London branch and the European Investment Bank.

Terms were also given for a $600 million deal of five-year senior notes from Anglo American Capital plc that was announced on Monday.

Health Care REIT sold $600 million of seven-year notes after the deal size was increased from $350 million. HSBC Holdings priced $2 billion of 10-year paper.

MetLife Global was in the market with an upsized $1.5 billion trade of bonds in two tranches done under Rule 144A and Regulation S. The deal size was increased from a single tranche of three-year notes at $500 million to include a one-year floating-rate note. Sources confirmed the deal priced by late afternoon, but terms weren't available at press time.

The London branch of Swiss bank UBS sold $2 billion of five-year covered bonds privately.

EIB priced $3 billion of five-year global notes.

"Today was pretty good," one source said, adding that there was "more variety than yesterday."

The previous day had seen mostly non-domestic financial names pricing bonds.

The week's issuance isn't over and is expected to actual increase in volume in coming days, a source said.

"Thursday is looking the busiest," she said. "We should have two or three more tomorrow - two straight IG and one EM."

While issuers are eager to sell bonds, they aren't all rushing into the market on the same day to outrun headlines, as in previous weeks.

"I don't think it will be anything crazy, but just steady," a syndicate source said.

The Markit CDX Series 18 North American investment-grade index ended unchanged on Tuesday at a spread of 89 basis points.

The new deal from HSBC Holdings traded 2 bps tighter, and Anglo American Capital's offering also firmed in secondary trading.

Health Care REIT's notes due 2019 traded tighter on the offer side.

MetLife Global Funding's notes were not seen trading initially after pricing.

Treasuries ended better following a strong two-year note auction on Tuesday. The benchmark 10-year Treasury note yield fell to 2.18% from 2.25%. The 30-year bond yield dropped 4 bps to 3.3%.

Health Care REIT upsizes

Health Care REIT priced an upsized $600 million of 4.125% seven-year senior notes (Baa2/BBB-/BBB) at a spread of Treasuries plus 260 bps, an informed source said.

The deal size was increased from $350 million, the source said.

Barclays Capital Inc., J.P. Morgan Securities LLC and UBS Securities LLC were bookrunners.

Proceeds are being used to redeem at par or settle upon conversion the $125.563 million of 4.75% convertible notes due in 2026, to repay up to $226.06 million of certain secured debt and for general corporate purposes.

Health Care REIT's notes due 2019 traded at 255 bps offered in the secondary market, a trader said.

The real estate investment trust for senior and healthcare real estate is based in Toledo, Ohio.

HSBC's $2 billion

HSBC Holdings sold $2 billion of 4% 10-year senior notes (Aa2/A+/AA) to yield Treasuries plus 190 bps, a source away from the trade said.

HSBC Securities (USA) Inc. ran the books.

Proceeds are being used for general corporate purposes.

In the secondary market, HSBC Holdings' notes due 2022 firmed to 188 bps bid, 183 bps offered, a trader said.

The unit of London-based financial services company HSBC is based in New York City.

UBS sells at talk

UBS' London branch priced $2 billion of 2.25% five-year covered bonds (Aaa//AAA) at a spread of mid-swaps plus 105 bps, or Treasuries plus 128 bps, a source who worked on the deal said.

The deal sold in line with talk in the 105 bps over mid-swaps area, the source said.

The deal was done under Rule 144A and Regulation S and was announced late on Monday.

CIBC World Markets Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and UBS Securities LLC were bookrunners.

UBS sold $1.5 billion of three-year covered bonds on Jan. 19.

The unit of the financial services company is based in Basel and Zurich, Switzerland.

EIB price five-years

European Investment Bank sold $3 billion of 1.625% global notes due 2017 (Aaa/AAA/AAA) at Treasuries plus 61.77 bps, a market source said.

Barclays Capital Inc., BNP Paribas Securities Corp. and J.P. Morgan Securities LLC ran the books.

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

Anglo gives terms

Anglo American Capital sold $600 million of 2.625% guaranteed five-year senior notes (Baa1/BBB+/) at 99.781, according to a release on Tuesday.

Bookrunners were BNP Paribas Securities Corp., Goldman Sachs & Co., Mitsubishi UFJ Securities (USA) Inc., Morgan Stanley & Co. LLC and UBS Securities LLC.

The deal was done under Rule 144A and Regulation S and is guaranteed by parent company Anglo American plc.

Proceeds are being used for general corporate purposes.

Anglo American's notes due 2017 traded tighter at 157 bps bid, 154 bps offered, a trader said.

The financing arm of mining company Anglo American plc is based in London.

© 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.