AIG, Bank of Montreal, Alexandria Real Estate price; AIG tightens; spreads firm

By Cristal Cody and Aleesia Forni

Virginia Beach, July 9 – American International Group Inc., Bank of Montreal and Alexandria Real Estate priced new bond offerings during Wednesday’s session.

AIG came to market with $2.5 billion of notes in five- and 30-year tranches, attracting an orderbook that was more than three times oversubscribed.

Meanwhile, Alexandria Real Estate sold $700 million of notes in tranches due 2020 and 2029, and Bank of Montreal priced $1.3 billion in two parts.

“Pretty solid day,” a source said.

All three of these new deals sold at the tight end of price talk, according to market sources.

The session also saw a $1 billion offering of two-year notes priced by Bank Nederlandse Gemeenten NV.

This week has seen a slew of financial names head to the primary, pricing nearly $12 billion of new issuance.

Sources had expected around $15 billion of supply.

Bonds ended the day stronger after widening in the previous session, a market source said.

The Markit CDX North American Investment Grade series 22 index firmed 1 basis point to a spread of 57 bps.

No aftermarket trading was seen late afternoon in Bank of Montreal’s new notes, a trader said.

AIG’s two tranches of notes tightened 3 bps in the secondary market, according to a trader.

AIG prices tight

The largest deal of Wednesday’s session came from AIG, which priced $2.5 billion of senior notes (Baa1/A-/BBB+) in five- and 30-year tranches, according to a market source.

Both tranches of the deal sold at the tight end of talk.

A $1 billion tranche of 2.3% five-year notes priced at 99.798 to yield 2.343%, or Treasuries plus 67 bps.

There was also $1.5 billion of 4.5% 30-year bonds sold with a spread of Treasuries plus 117 bps.

Pricing was at 99.397 to yield 4.537%.

AIG’s notes due 2019 tightened to 64 bps offered in the secondary market, according to a trader.

The bonds due 2044 firmed to 114 bps offered, the trader said.

Proceeds will be used for general corporate purposes.

HSBC Securities (USA) Inc., RBC Capital Markets LLC, RBS Securities Inc., U.S. Bancorp Investments Inc., Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the joint bookrunners.

The insurance company is based in New York City.

BMO brings three-years

Bank of Montreal priced $1.3 billion of senior medium-term notes (Aa3/A+/AA-) in fixed- and floating-rate tranches due 2017, a market source said.

The sale included $300 million of three-year floating-rate notes priced at par to yield Libor plus 25 bps.

A second tranche was $1 billion of 1.3% three-year notes sold at 99.997 to yield 1.301%, or Treasuries plus 38 bps.

The notes sold at the tight end of talk.

BMO Capital Markets Corp., Citigroup Global Markets Inc., Credit Suisse Securities USA LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The financial services company is based in Toronto and Montreal.

BNG sells floaters

BNG came to market with $1 billion of 0.675% two-year notes priced in line with talk at mid-swaps flat, a market source said.

Pricing was at 99.909 to yield 0.671%.

The bookrunners for the Rule 144A and Regulation S deal were Barclays, Deutsche Bank Securities and TD Securities.

The local government funding agency is based in the Hague, the Netherlands.

Alexandria two-parter

In other primary action, Alexandria Real Estate sold a $700 million two-part offering of senior notes in tranches due 2020 and 2029, according to a market source and an FWP filing with the Securities and Exchange Commission.

The sale included $400 million of 2.75% notes due 2020 priced at 99.793 to yield 2.791%, or Treasuries plus 110 bps.

There was also $300 million of 4.5% notes due 2029 sold at Treasuries plus 195 bps.

Pricing was at 99.912 to yield 4.508%.

Bookrunners were JPMorgan, Barclays and Goldman Sachs.

Proceeds will be used to prepay $100 million of a 2016 unsecured senior bank term loan and to reduce the outstanding balance of an unsecured senior line of credit.

The notes are guaranteed by Alexandria Real Estate Equities LP.

The real estate investment trust for life science labs is based in Pasadena, Calif.

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