BPCE, Moody’s, FS Investment bring new deals to primary; Moody’s firms in aftermarket trade

By Cristal Cody and Aleesia Forni

Virginia Beach, July 7 – A trio of issuers made their way to Monday’s high-grade primary market, raising $2.5 billion during the session.

BPCE SA sold the largest offering of the day, pricing a $1.35 billion offering of five-year notes.

The session also saw Moody’s Corp. and FS Investment Corp. price upsized issues of senior notes.

Moody’s sold $750 million of notes in five- and 30-year tranches, while FS Investment priced $400 million of five-year notes.

Also on Monday, General Motors Financial Co., Inc. came to the primary with a $1.5 billion two-part sale of senior notes.

Activity in the investment-grade primary market is expected to remain relatively quiet this week following the Independence Day holiday.

One source noted a “fairly light” calendar for the week, with around $15 billion of supply expected to price.

Investment-grade bond spreads opened the day tight but softened over the session, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 56 bps.

No aftermarket trading was seen in the new issues that priced late afternoon from General Motors Financial and FS Investment, a trader said.

Moody’s two-part offering of notes tightened 4 bps to 7 bps in the secondary market, according to a trader.

BPCE brings $1.35 billion

BPCE priced $1.35 billion of 2.5% senior notes due 2019 with a spread of Treasuries plus 80 bps, a market source said.

Pricing was at 99.841 to yield 2.543%.

The joint bookrunners were BofA Merrill Lynch, Barclays, Goldman Sachs & Co. and Natixis Securities.

Proceeds from the sale will be used for general corporate purposes.

The financial services company is based in Paris.

Moody’s two-parter

Also on Monday, Moody's Corp. sold an upsized $750 million of senior notes (/BBB+/) in tranches due 2019 and 2044, according to a market source.

The sale included $450 million of 2.75% five-year notes priced at 99.838 to yield 2.785%, or Treasuries plus 105 bps.

A second tranche was $300 million of 5.25% 30-year bonds priced at 99.462 to yield 5.286%.

The notes sold at 185 bps over Treasuries.

Both tranches sold at the tight end of talk.

Moody’s notes due 2019 firmed to 101 bps bid, 96 bps offered in aftermarket trading, a trader said.

The tranche of bonds due 2044 tightened to 178 bps bid, 177 bps offered in the secondary market.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the joint bookrunners.

The company plans to use proceeds for general corporate purposes.

Moody's is a New York City-based credit ratings and research agency.

FS upsizes

FS Investment also sold an upsized offering of senior notes on Monday.

The company priced $400 million of 4% five-year senior notes (/BBB/BBB-) on top of talk with a spread of Treasuries plus 235.5 bps, according to a market source and a 497AD filed with the Securities and Exchange Commission.

Pricing was at 99.498 to yield 4.112%.

Citigroup Global Markets Inc., Wells Fargo Securities LLC and JPMorgan were the joint bookrunners.

Proceeds will be used to repay outstanding debt under the company’s financing facilities.

FS Investment is a business development company based in Philadelphia.

GM sells $1.5 billion

General Motors Financial priced $1.5 billion of non-callable senior notes (Ba2/BB-/BB+) in two tranches in a quick-to-market transaction on Monday, according to market sources.

The deal included a $700 million tranche of three-year notes, which priced at par to yield 2 5/8%. The yield printed on top of yield talk that had been revised from earlier talk in the 2¾% area.

In addition, the company priced an $800 million tranche of five-year notes at par to yield 3½%. The yield printed on top of yield talk that had been revised from earlier talk in the 3 5/8% area.

The quick-to-market deal was announced at benchmark size on Monday morning and was subsequently priced on the investment-grade desk.

Credit Suisse Securities (USA) LLC, Barclays, BofA Merrill Lynch and Citigroup Global Markets were the joint bookrunners.

The Fort Worth auto finance company, a wholly owned subsidiary of General Motors, plans to use the proceeds for general corporate purposes.

Bank/brokerage CDS costs rise

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

Bank of America Corp.’s CDS costs widened 3 bps to 65 bps bid, 68 bps offered. Citigroup Inc.’s CDS costs eased 2 bps to 63 bps bid, 66 bps offered. JPMorgan Chase & Co.’s CDS costs rose 2 bps to 54 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs eased 1 bp to 41 bps bid, 44 bps offered.

Merrill Lynch’s CDS costs widened 3 bps to 69 bps bid, 73 bps offered. Morgan Stanley’s CDS costs eased 2 bps to 64 bps bid, 67 bps offered. Goldman Sachs Group, Inc.’s CDS costs rose 3 bps to 71 bps bid, 74 bps offered.

Paul Deckelman contributed to this review

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