Bank of Nova Scotia, 3M, TransAlta enter primary; Scotiabank firms; 3M mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, May 29 - The Bank of Nova Scotia, 3M Co. and TransAlta Corp. priced more than $2.3 billion bonds between them on Thursday.

The session's primary activity brought the total of investment-grade new issuance for the Memorial Day holiday-shortened week to more than $13 billion.

Bank of Nova Scotia sold a $1 billion issue of 2.05% five-year senior notes at 57 basis points over Treasuries.

The notes sold at the tight end of the Treasuries plus 60 bps area talk.

3M sold a $950 million of issue senior notes in two parts during the session.

The company priced $625 million of 1.625% five-year notes with a spread of Treasuries plus 25 basis points and $325 million of 3.875% notes due 2044 at Treasuries plus 75 bps.

Both tranches of the trade sold at the tight end of price talk.

Meanwhile, TransAlta priced an upsized $400 million issue of 1.9% senior notes due 2017 at Treasuries plus 120 bps.

TransAlta's notes were active in aftermarket trading, while Bank of Nova Scotia's 2.05% notes due 2019 tightened 1 bp on the bid side, according to a trader.

3M's two tranches of notes were mixed in the secondary market, a trader said.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 62 bps.

"Seemed spreads were mixed," a trader said. "Heard they were widening a bit, but seemed a bit tighter to me."

Scotiabank prices tight

Bank of Nova Scotia priced $1 billion of 2.05% senior notes due 2019 on Thursday with a spread of 57 basis points over Treasuries, according to a market source and a FWP filed with the Securities and Exchange Commission.

Pricing was at 99.972 to yield 2.056%.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 60 bps.

After being freed to trade, Bank of Nova Scotia's 2.05% notes due 2019 tightened to 56 bps bid, 54 bps offered in the secondary market, a trader said.

The joint bookrunners were Citigroup Global Markets Inc., Barclays, BofA Merrill Lynch, Scotiabank and Morgan Stanley & Co. LLC.

Proceeds will be added to the bank's funds and will be used for general business purposes.

The financial services company is based in Toronto.

3M's two-parter

3M priced $950 million of senior notes, series F, (Aa2/AA-/) on Thursday in tranches due 2019 and 2044, according to a market source and a FWP filed with the Securities and Exchange Commission.

The sale included $625 million of 1.625% five-year bonds priced at 99.434 to yield 1.743%, or Treasuries plus 25 basis points.

A $325 million tranche of 3.875% notes due 2044 sold with a spread of Treasuries plus 75 bps.

Pricing was at 96.94 to yield 4.052%.

Both tranches sold at the tight end of talk.

After breaking, 3M's 1.625% notes due 2019 firmed to 23 bps offered in secondary trading, a trader said.

The company's 3.875% notes due 2044 headed out wider on the bid side at 77 bps bid, 74 bps offered.

Goldman Sachs & Co., BofA Merrill Lynch and Morgan Stanley & Co. LLC were the joint bookrunners.

The multinational conglomerate is based in Maplewood, Minn.

TransAlta upsizes

TransAlta was in Thursday's market with $400 million of 1.9% senior notes due 2017 priced at Treasuries plus 120 basis points, according to a FWP filing with the Securities and Exchange Commission.

The notes (Baa3/BBB-) priced at 99.887 to yield 1.939%.

In the secondary, TransAlta's 1.9% notes due 2017 traded at 107 bps bid, 103 bps offered in the secondary market, according to a trader.

Bookrunners were Bank of America Merrill Lynch and HSBC Securities (USA) Inc.

Proceeds will be used to repay borrowings under an existing credit facility and for general corporate purposes.

TransAlta last tapped the U.S. bond market with a $450 million sale of 4.5% 10-year bonds at 300 basis points over Treasuries on Nov. 2, 2012.

The electricity generation company is based in Calgary, Alta.

Bank/brokerage CDS costs flat

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

Bank of America Corp.'s CDS costs ended flat at 67 bps bid, 70 bps offered. Citigroup Inc.'s CDS costs were unchanged at 67 bps bid, 70 bps offered. JPMorgan Chase & Co.'s CDS costs closed flat at 55 bps bid, 58 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs were unchanged at 73 bps bid, 76 bps offered. Morgan Stanley's CDS costs ended flat at 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.'s CDS costs were flat at 79 bps bid, 82 bps offered.

-Paul Deckelman contributed to this review

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