JPMorgan, Barclays, HCP tap market; IADB plans sale; Kellogg notes flat following downgrade

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 12 - JPMorgan Chase & Co. and Barclays Bank plc were among the flood of financials taking advantage of strong investor demand for short-dated paper on Wednesday.

JPMorgan Chase came to market pricing $4.25 billion of senior notes in fixed- and floating-rate tranches due 2017.

The bank's new issue included $1.75 billion floaters sold at par to yield Libor plus 52 basis points and $2.5 billion of 1.35% notes priced with a spread of Treasuries plus 65 bps.

Both tranches of the self-led deal priced at the tight end of guidance.

Meanwhile, Barclays priced a $2.75 billion two-part sale of senior notes, according to market sources.

There was a $750 million of floaters due 2017 sold at par to yield Libor plus 58 bps.

A $2 billion tranche of 2.5% five-year notes sold at Treasuries plus 93 bps.

The two tranches were sold at the tight end of talk.

A source noted that the deal's order book was more than two times oversubscribed.

HCP Inc. sold an upsized $350 million of 4.2% notes due 2024 with a spread of 148 bps over Treasuries.

In other primary action on Wednesday, International Bank for Reconstruction and Development (World Bank) sold a $5 billion issue of 0.5% notes due 2016 at mid-swaps minus 1 bp, a market source said.

The notes sold on top of talk.

Landwirtschaftliche Rentenbank also brought a new issue to Wednesday's primary, pricing $1 billion of 1.75% five-year notes at 99.624 to yield 11 bps over mid-swaps.

Pricing was at the tight end of talk, which was set in the area of mid-swaps plus 12 bps.

The session also saw Kommunalbanken AS tap its existing issue of floaters due 2018.

The bank sold an upsized $500 million of notes to yield Libor plus 15 bps in a Rule 144A and Regulation S deal.

Fifth Street Finance Corp. announced plans to price a $250 million issue of five-year notes during the week, according to a 497AD filed with the Securities and Exchange Commission on Wednesday.

Proceeds from the sale will be used to repay outstanding debt under the company's credit facilities.

Inter-American Development Bank also joined the forward calendar on Wednesday.

The bank set talk for its planned offering of notes due 2024 at 23 bps over mid-swaps.

Also on Wednesday, the Federal Home Loan Bank System announced during the session that it would not issue Global Notes in February.

Investment-grade bonds stayed mostly stable over the day, according to market sources.

The Markit CDX North American Investment Grade series 21 index ended flat at a spread of 66 bps.

Not much trading action was seen in Kellogg Co.'s 2.75% notes due March 1, 2023 following the ratings downgrade by Moody's Investors Service, according to market sources. The notes traded mostly unchanged from issuance a year ago, sources said.

Moody's downgraded Kellogg's to Baa2 from Baa1 on anticipation of continued soft operating performance in the company's core cereal and snacks businesses as well as the company's major restructuring program and return to share repurchases.

JPMorgan sells three-years

JPMorgan Chase priced $4.25 billion of three-year senior notes (A3/A/A+) in fixed- and floating-rate tranches due 2017, a market source said on Wednesday.

A $1.75 billion tranche of three-year floaters was priced a par to yield Libor plus 52 bps.

There was $2.5 billion of 1.35% notes due 2017 sold at 99.951 to yield 1.367%, or Treasuries plus 65 bps.

Both tranches sold at the tight end of guidance.

J.P. Morgan Securities LLC was the bookrunner.

The financial services company is based in New York City.

Barclays prices two-parter

Barclays Bank sold $2.75 billion of notes (A2/A/A) in tranches due 2017 and 2019, according to market sources.

The sale included $750 million of three-year floaters priced at par to yield Libor plus 58 bps.

A second tranche was $2 billion of 2.5% five-year notes priced at 99.995 to yield 2.501%, or Treasuries plus 93 bps.

Both tranches of the sale were priced at the tight end of talk.

Barclays was the bookrunner.

The financial services company is based in London.

HCP prices tight

HCP priced an upsized $350 million issue of 4.2% 10-year senior notes (Baa1/BBB+/BBB+) on Wednesday with a spread of 148 bps over Treasuries, according to an informed source and an FWP filed with the SEC.

Pricing was at 99.537 to yield 4.257%.

The notes priced at the tight end of talk.

Goldman Sachs & Co., JPMorgan and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to repay about $240 million under the company's bank line of credit.

Borrowings under the line of credit were used to repay the company's $400 million of 2.7% senior notes due Feb. 1, 2014 and $156 million of 5.7% mortgage debt due Feb. 1, 2014.

Any additional proceeds will be used for general corporate purposes.

The real estate investment trust for the health-care industry is based in Long Beach, Calif.

World Bank brings $5 billion

World Bank priced $5 billion of 0.5% two-year notes (Aaa/AAA/) on Wednesday at mid-swaps minus 1 bp, a market source said.

Pricing was at 99.951 to yield 0.52%.

The notes sold on top of talk.

BofA Merrill Lynch, Credit Suisse Securities, HSBC Securities and TD Securities were the bookrunners.

The issuer is based in Washington, D.C.

Rentenbank new issue

Rentenbank sold $1 billion of 1.75% notes (Aaa/AAA/AAA) due 2019 on Wednesday at 99.624 to yield 11 bps over mid-swaps, according to a market source and an FWP filed with the SEC.

The notes priced at the tight end of talk, which was set in the area of mid-swaps plus 12 bps.

Citigroup Global Markets Inc., Daiwa Capital Markets Europe, Goldman Sachs International and TD Securities were the bookrunners.

Proceeds will be used to finance the bank's lending activities.

The notes are guaranteed by the Federal Republic of Germany.

The German development agency for agribusiness is based in Frankfurt.

Kommunalbanken adds on

Kommunalbanken reopened its issue of floating-rate notes due Feb. 20, 2018 (Aaa/AAA/) to add $500 million to yield Libor plus 15 bps, a market source said on Wednesday.

The issue was upsized from $300 million.

The coupon is Libor plus 18 bps.

Total issuance will be $1.65 billion, including $1.15 million sold in three previous offerings.

Credit Agricole, Citigroup Global Markets and Deutsche Bank Securities Inc. were the bookrunners for the Rule 144A and Regulation S deal.

The government-funded lender to municipalities is based in Oslo.

Fifth Street plans sale

Fifth Street Finance is planning to price a $250 million issue of five-year notes (/BBB-/BBB-) this week, according to a 497AD filed with the SEC on Wednesday.

Goldman Sachs, Morgan Stanley & Co. LLC, Barclays and JPMorgan are the active bookrunners.

Passive bookrunners are Deutsche Bank Securities, RBC Capital Markets LLC and UBS Securities LLC.

Proceeds will be used to repay outstanding debt under the company's credit facilities.

Fifth Street is a White Plains, N.Y.-based externally managed, closed-end, non-diversified management investment company.

IADB sets talk

Inter-American Development Bank has set price talk for its planned offering of 10-year notes at mid-swaps plus 23 bps, according to an informed source.

Barclays, Goldman Sachs and HSBC Securities are the joint bookrunners.

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

FHLB passes

The Federal Home Loan Bank System announced on Wednesday that it will not issue Global Notes in February.

The government-sponsored banks for financial institutions are based in Washington, D.C.

Kellogg flat

Kellogg's 2.75% notes due 2023 traded early in the day on Wednesday at 92 bps offered, a trader said.

"Some traded around 94 [bps]," the trader said.

Kellogg (Baa2/BBB+/BBB+) sold $400 million of the notes on Feb. 11, 2013 at a spread of 87.5 bps plus Treasuries.

The cereal and convenience foods products manufacturer and marketer is based in Battle Creek, Mich.

Time Warner Cable improves

In other secondary trading, Time Warner Cable Inc.'s 4.125% senior notes due 2021 headed out about 1 bp tighter at 216 bps offered from a week ago, according to a market source.

The issue traded in late January in the 225 bps offered area.

Time Warner Cable (Baa2/BBB/BBB) sold $700 million of the notes in 2010 at a spread of 155 bps over Treasuries.

The company has rejected Charter Communications Inc.'s takeover offer of $132.50 a share. On Tuesday, Charter nominated 13 directors to Time Warner Cable's board.

Time Warner Cable is a New York City-based broadband communications company.

Bank/brokerage CDS mostly flat

Investment-grade bank and brokerage CDS prices were mostly unchanged, according to a market source.

Bank of America Corp.'s CDS costs were flat at 72 bps bid, 77 bps offered. Citigroup Inc.'s CDS costs eased 1 bp to 78 bps bid, 83 bps offered. JPMorgan Chase's CDS costs were flat at 64 bps bid, 67 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 38 bps bid, 43 bps offered.

Merrill Lynch's CDS costs were flat at 75 bps bid, 79 bps offered. Morgan Stanley's CDS costs eased 1 bp to 86 bps bid, 91 bps offered. Goldman Sachs Group, Inc.'s CDS were unchanged at 91 bps bid, 96 bps offered.

Paul Deckelman contributed to this review.

© 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.