Sweden, Valspar price; JPMorgan, Freddie Mac enter primary; JPMorgan, bank paper mostly soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 15 – The investment-grade bond market saw new deals price from the Kingdom of Sweden, JPMorgan Chase & Co. and Valspar Corp. on Thursday amidst continued market volatility.

The Kingdom of Sweden priced its new $2.5 billion of three-year notes at the tight end of talk during the session.

Both tranches of Valspar’s new issue also sold at the tight end of talk, around 25 basis points tight of the mid-point of initial guidance.

JPMorgan was also in the market with an offering of notes, though details of the sale were unavailable at press time.

The session also saw Freddie Mac sell a $4 billion issue of Reference Notes in a deal that was announced earlier during the week.

In the preferred space, Wells Fargo & Co. came to market with $2 billion of $1,000-par fixed-to-floating-rate preferred stock.

More than $25 billion of new investment-grade paper has priced so far this week, nearly meeting what was expected to be around $30 billion of supply.

JPMorgan Chase’s new notes due 2025 were seen quoted weaker in the gray market ahead of pricing at 148 bps bid, wider than where the paper launched at 145 bps offered, a trader said.

In other secondary trading, JPMorgan’s 3.625% senior notes due 2024 eased 3 bps, a source said.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 widened 4 bps over the session.

Morgan Stanley & Co. Inc.’s 3.875% notes due 2024 were 2 bps softer on the day.

Bank of America Corp.’s 4% notes due 2024 traded flat to 1 bp weaker.

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 72 bps.

Sweden new issue

Kingdom of Sweden priced $2.5 billion of 0.875% three-year notes at mid-swaps minus 6 bps, or Treasuries plus 15.3 bps, on Thursday, according to a market source and a news release.

Price talk was set in the mid-swaps minus 5 bps.

Pricing was at 99.743 to yield 0.962%.

The lead managers were Barclays, Citigroup Global Markets Inc. and Nordea.

Freddie Mac Reference Notes

Freddie Mac priced a $4 billion issue of 0.5% two-year Reference Notes with a spread of 11.5 bps over Treasuries on Thursday, according to a market source and a company press release.

The notes priced at 99.825 to yield 0.587%.

Pricing was in line with talk.

The issue will settle on Jan. 16.

Barclays, J.P. Morgan Securities LLC and Nomura were the banks on the deal.

The government-backed mortgage lender is based in McLean, Va.

Valspar prices tight

Valspar sold $500 million of senior notes (Baa2/BBB/) on Thursday in tranches due 2025 and 2045, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $250 million of 3.3% notes due 2025 sold with a spread of 155 bps. Pricing was at 99.745 to yield 3.33%.

There was also $250 million of 4.4% 30-year bonds priced at 98.962 to yield 4.463%, or Treasuries plus 205 bps.

Both tranches sold at the tight end of talk.

BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay the company’s $150 million outstanding principal amount of its 5.1% senior notes due Aug. 1, 2015 and for general corporate purposes, including the repayment of commercial paper.

The coating and paint manufacturer is based in Minneapolis.

Finland details sale

Details of Finland's Municipality Finance plc’s recently priced $1 billion of 1.5% five-year notes (Aaa/AA+/) emerged on Thursday.

The issue, which sold on Wednesday, priced in line with talk at mid-swaps plus 10 bps, according to an informed source and a company news release.

The spread was the tightest pricing ever for a five-year benchmark loan, according to a company press release.

Around 40.4% of orders came from the Americas, 38.8% from Europe, the Middle East and Africa, 14.4% from the Nordics and 6.4% from Asia Pacific.

By investor type, banks picked up 62.3%, central banks 27.6%, asset managers 8.9% and insurers 1.2%.

Barclays, JPMorgan Securities LLC, Nordea and TD Securities were the bookrunners.

The credit institution for the municipal sector and state-subsidized housing is based in Helsinki.

Wells Fargo preferreds

Wells Fargo priced $2 billion of 5.875% $1,000-par series U class A fixed-to-floating-rate noncumulative perpetual preferred stock, according to a market source on Thursday.

The preferreds were sold as depositary shares representing a 1/25th interest.

Wells Fargo Securities is the sole bookrunner.

Dividends will be paid on a semiannual and fixed basis through June 15, 2025. From then on, the dividend will be paid quarterly at a rate of Libor plus 399 bps.

The shares become redeemable at par plus accrued interest on or after June 15, 2025. The company can redeem the preferreds prior to that date upon a regulatory capital treatment event.

The new securities will not be listed.

Proceeds will be used for general corporate purposes.

Wells Fargo is a San Francisco-based bank.

JPMorgan eases

JPMorgan’s existing 3.625% senior notes due 2024 (A3/A/A+) eased 3 bps to 134 bps offered in secondary trading, according to a market source.

JPMorgan sold $2 billion of the notes on May 6, 2014 at Treasuries plus 110 bps.

The financial services company is based in New York City.

Goldman paper wider

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) widened 4 bps to 150 bps offered, a market source said.

Goldman Sachs sold $2.25 billion of the notes on June 30, 2014 at Treasuries plus 135 bps.

The financial services company is based in New York City.

Morgan Stanley soft

Morgan Stanley’s 3.875% notes due 2024 (Baa2/A-/A-) eased 2 bps to 150 bps bid, a market source said.

Morgan Stanley sold $3 billion of the notes at a spread of Treasuries plus 130 bps on April 23, 2014.

The financial services company is based in New York City.

Bank of America mostly flat

Bank of America’s 4% notes due 2024 (Baa2/A-/A) were quoted flat to 1 bp weaker at 144 bps bid, a source said.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at 137 bps plus Treasuries.

The financial services company is based in Charlotte, N.C.

Bank/brokerage CDS costs higher

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

Bank of America’s CDS costs were 4 bps higher at 75 bps bid, 79 bps offered. Citigroup Inc.’s CDS costs increased 4 bps to 85 bps bid, 89 bps offered. JPMorgan Chase & Co.’s CDS costs were up 5 bps at 75 bps bid, 59 bps offered. Wells Fargo’s CDS costs ended 2 bps higher at 53 bps bid, 57 bps offered.

Merrill Lynch’s CDS costs were 4 bps higher at 78 bps bid, 82 bps offered. Morgan Stanley’s CDS costs ended 2 bps higher at 87 bps bid, 91 bps offered. Goldman Sachs Group’s CDS costs rose 3 bps to 94 bps bid, 98 bps offered.

Paul Deckelman and Stephanie N. Rotondo contributed to this review.

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