Hyundai Capital prices lone high-grade new issue; Hyundai Capital firms; spreads widen

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 3 - A single deal from Hyundai Capital America priced during the high-grade primary session on Monday.

The deal was met with "pretty strong demand" despite continued volatility in the market, a source said, with the orderbook more than two times oversubscribed.

The Irvine, Calif.-based company priced $1.5 billion of senior notes in two tranches during the session in a Rule 144A and Regulation S deal.

Hyundai Capital priced $900 million of 1.45% three-year notes at Treasuries plus 85 basis points.

A $600 million tranche of 2.55% five-year notes was sold with a spread of 115 bps over Treasuries

Sources are expecting around $10 billion to $15 billion of deals to price during the first week of February.

Investment-grade bond spreads headed out weaker on Monday, while activity stayed light over the day, according to market sources.

The Markit CDX North American Investment Grade series 21 index eased 2 bps to a spread of 74 bps on Monday.

Hyundai Capital's 1.45% notes due 2017 and 2.55% notes due 2019 tightened on the offered side in aftermarket trading, a source said.

Hyundai Capital two-parter

Hyundai Capital America priced a two-part $1.5 billion offering of senior notes (Baa1/BBB+/) on Monday, according to a syndicate source.

The company priced $900 million of 1.45% notes due 2017 with a spread of Treasuries plus 85 bps, or 99.921, to yield 1.477%.

There was also $600 million of 2.55% five-year notes, which were sold at 115 bps over Treasuries.

Pricing was at 99.809 to yield 2.519%.

In aftermarket trading, Hyundai Capital's 1.45% notes due 2017 firmed to 80 bps offered, according to a trader.

The 2.55% notes due 2019 firmed to 108 bps offered in the secondary market.

BofA Merrill Lynch, Barclays and Citigroup Global Markets Inc. were the active joint bookrunners for the Rule 144A and Regulation S deal, while passive joint bookrunners were BNP Paribas Securities Corp. and UBS Securities LLC.

The financing arm of Hyundai in the United States is based in Irvine, Calif.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 2 bps to 91 bps bid, 95 bps offered. Citigroup Inc.'s CDS costs rose 5 bps to 99 bps bid, 103 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 75 bps bid, 79 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 45 bps bid, 50 bps offered.

Merrill Lynch's CDS costs eased 2 bps to 93 bps bid, 98 bps offered. Morgan Stanley's CDS costs rose 1 bp to 102 bps bid, 107 bps offered. Goldman Sachs Group, Inc.'s CDS widened 1 bp to 106 bps bid, 111 bps offered.

Paul Deckelman contributed to this review.

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