Onslaught of issuance continues; week's supply hits $20 billion; NextEra, Ford Credit firm

By Cristal Cody and Aleesia Forni

Virginia Beach, June 3 - The high-grade market saw another robust day of issuance on Tuesday.

Roughly $11 billion of new deals sold during the session, up from Monday's primary that saw $8.2 billion of investment-grade paper price.

Tuesday's primary market saw $2 billion offerings price from both AT&T Inc. and Wells Fargo & Co.

Aside from Wells Fargo's new deal, other financial names registered a strong presence on Tuesday, with Capital One Bank, Bank Nederlandse Gemeenten NV, Netherlands Development Finance Co., Paccar Financial Corp. and International Finance Corp. among the new issuers.

Details of Capital One's $1.25 billion sale of notes were not available at press time.

Also on Tuesday, NextEra Energy Capital Holdings Inc. sold $350 million of five-year notes, while Ford Motor Credit Co. LLC and International Paper Co. both sold two-tranche deals.

Roughly $20 billion of investment-grade paper has priced so far this week in just two sessions, as companies hit the market ahead of Thursday's European Central Bank decision and Friday's nonfarm payrolls report.

The figure has already matched what sources had predicted to be around a $20 billion week.

In the secondary, high-grade bonds traded mostly flat to slightly better on Tuesday, according to market sources.

The Markit CDX North American Investment Grade series 22 index was unchanged at a spread of 62 basis points.

In aftermarket trading, Ford Motor Credit's 1.724% notes due 2017 tightened 5 bps, a trader said.

NextEra Energy's 2.4% debentures due 2019 firmed 4 bps in the secondary market, according to a trader.

International Paper's two tranches of notes traded flat to slightly wider, a trader said.

Capital One's notes due 2019 firmed 2 bps in aftermarket trading to 68 bps bid, 65 bps offered, a trader said.

The new issues from Paccar Financial and AT&T were not seen in the secondary market as the session closed, a trader said.

AT&T brings $2 billion

AT&T sold a $2 billion issue of 4.8% global notes due 2044 in line with talk on Tuesday at Treasuries plus 140 bps, according to a market source.

Pricing was at 99.636 to yield 4.823%.

AT&T's new 30-year bonds sold in line with talk, which had firmed from initial guidance in the high-140 bps area over Treasuries.

A source noted that deal's orderbook was around two times oversubscribed.

The joint bookrunners were J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

Proceeds will be used for general corporate purposes, including the repayment of debt.

The telecommunications company is based in Dallas.

AT&T was last in the market on March 26, pricing $500 million of three-year floating-rate global notes at par to yield Libor plus 42 bps.

Wells Fargo sells floaters

Wells Fargo also hit the market with a $2 billion deal, pricing its two-year floating-rate senior notes at par to yield Libor plus 15 bps, according to an informed source.

Wells Fargo & Co. LLC was the bookrunner.

The bank is based in San Francisco.

International Paper new issue

International Paper sold $1.6 billion of senior notes in tranches due 2024 and 2044 on Tuesday, according to a market source and a company release.

Both tranches of the new issue priced at the tight end of talk.

The sale included $800 million of 3.65% 10-year bonds sold at 99.626 to yield 3.695%, or Treasuries plus 110 bps, and $800 million of 4.8% 30-year bonds priced at 99.479 to yield 4.883%, or Treasuries plus 140 bps.

International Paper's 3.65% notes due 2024 traded wider on the bid side at 112 bps bid, 110 bps offered, a trader said.

The 4.8% notes due 2044 headed out flat at 140 bps bid, 138 bps offered.

Deutsche Bank Securities, RBS Securities Inc., BBVA Securities Inc., BNP Paribas Securities Corp., Credit Agricole CIB, Mizuho Securities USA Inc., and SMBC Nikko were the joint bookrunners.

Proceeds will be used to fund a tender offer.

Based in Memphis, Tenn., International Paper is a paper manufacturing and distributing company.

IFC sells four-years

International Finance came to Tuesday's market pricing $1 billion of 1.25% notes due 2018 at a spread of mid-swaps minus 2 bps, an informed source said.

The deal priced at 99.519 to yield 1.371%.

BofA Merrill Lynch, BNP Paribas Securities Corp. and Goldman Sachs were the banks on the offering.

The World Bank member and lender to the private sector in developing countries is based in Washington, D.C.

Ford sells two-parter

The primary also saw Ford Motor Credit price a two-part $1.5 billion offering of senior notes on in fixed- and floating-rate tranches due 2017, a market source said.

A $1.25 billion tranche of 1.724% three-year notes sold at par, or 90 bps over Treasuries.

The notes were guided in the area of Treasuries plus 100 bps.

The company also sold $250 million of floating-rate notes due 2017 at par to yield Libor plus 57 bps.

The floating-rate tranche was added following the deal's announcement on Tuesday.

Ford Motor Credit's 1.724% notes due 2017 tightened to 85 bps offered in the secondary market, according to a trader.

Credit Agricole Securities (USA) Inc., Deutsche Bank Securities, Goldman Sachs & Co., J.P. Morgan Securities LLC and RBS Securities Inc. were the joint bookrunners.

Proceeds will be added to the company's general funds and will be used for the purchase of receivables, for loans and to repay debt.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Foreign banks hit primary

Foreign financials Bank Nederlandse Gemeenten and Netherlands Development Finance Co. were also in Tuesday's market with new issues.

Bank Nederlandse Gemeenten sold $1.5 billion of 1.875% five-year notes (Aaa/AAA/AAA) in line with talk at 99.981 to yield mid-swaps plus 17 bps, a market source said.

Credit Suisse Securities, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and RBC Capital Markets LLC were the bookrunners for the agency's deal.

Meanwhile, Netherlands Development Finance sold $500 million of three-year floaters at par to yield Libor plus 16 bps, an informed source said.

The joint bookrunners were HSBC Securities, J.P. Morgan Securities LLC and Daiwa Securities.

Both issuers are based in The Hague, the Netherlands.

NextEra prices tight

A smaller sized deal from NextEra Energy Capital was also issued on Tuesday.

The company sold $350 million of 2.4% five-year debentures tight of guidance at 80 bps over Treasuries, or 99.825 to yield 2.436%, according to a market source and a FWP filed with the Securities and Exchange Commission.

Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be added to the company's general funds, which will be used to repay commercial paper and for other general corporate purposes.

NextEra Energy's 2.4% debentures due 2019 tightened in secondary trading to 76 bps bid, 72 bps offered, a trader said.

Based in Juno Beach, Fla., NextEra is power generation and transmission company.

NextEra last headed to the U.S. high-grade market on March 6 with a five-year offering of notes.

The company sold the $350 million of 2.7% senior debentures with a spread of Treasuries plus 113 bps.

Paccar two-parter

Paccar Financial priced $500 million of three-year notes fixed- and floating-rate tranches, according to a FWP filed with the Securities and Exchange Commission.

A $300 million tranche of floating-rate notes priced at par to yield Libor plus 19 bps, while $300 million of 1.1% three-year notes sold at 99.871 to yield 1.144%, or Treasuries plus 32 bps.

The bookrunners were BofA Merrill Lynch, RBC Capital Markets LLC, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, ANZ Securities Inc., Lloyds Securities Inc. and The Williams Capital Group LP.

The provider of retail and commercial truck financing for Paccar Inc. is based in Bellevue, Wash.

Paccar Financial was last in the market on Dec. 3 with a $250 million issue of floating-rate notes due 2018, which priced at par to yield Libor plus 60 bps.

Freddie passes

In other market action on Tuesday, Freddie Mac said that it would not issue Reference Notes on its June 3 announcement date, according to a company news release.

The government-sponsored enterprise is based in McLean, Va.

Bank/brokerage CDS costs flat to lower

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

Bank of America Corp.'s CDS costs firmed 1 bp to 66 bps bid, 69 bps offered. Citigroup Inc.'s CDS costs were unchanged at 66 bps bid, 69 bps offered. JPMorgan Chase & Co.'s CDS costs closed flat at 54 bps bid, 57 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 34 bps bid, 37 bps offered.

Merrill Lynch's CDS costs declined 1 bp to 70 bps bid, 74 bps offered. Morgan Stanley's CDS costs ended flat at 69 bps bid, 72 bps offered. Goldman Sachs Group, Inc.'s CDS costs were flat at 78 bps bid, 81 bps offered.

Paul Deckelman contributed to this review

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