Lloyds Bank, Transcontinental Gas Pipe Line bring new issues; banking, energy spreads widen

By Aleesia Forni

New York, Jan. 19 – Lloyds Bank plc and Transcontinental Gas Pipe Line Co. LLC priced new bonds to kick off the shortened week on Tuesday. Continued market volatility kept a majority of issuers on the sidelines.

Lloyds entered the primary market with a $1.2 billion two-part offering of three-year notes.

In the secondary market, existing bonds from Lloyds traded around 1 basis point better on the day, while banking and financial names overall were around 4 bps wider.

Back in the primary, Transcontinental issued $1 billion of bonds in its first entrance into the U.S. high-grade market in nearly four years as crude oil prices fell more than 3% during the session.

The company’s 10-year notes priced to yield 7.875%, at the tightest side of guidance set in the 8% area.

Even with the tumultuous backdrop, bonds from Shell International Finance BV were trading tighter on Tuesday.

The company’s 4.3% bonds due 2019 and 2.125% bonds due 2020 were each 6 bps better.

However, energy sector spreads were around 10 bps wider on the day overall.

And the Markit CDX North American Investment Grade 25 index lost some earlier gains to close the session 4 bps wider at a spread of 110 bps.

Lloyds two-parter

Lloyds Bank priced a $1.2 billion two-part offering of senior notes (A1/A/A+) on Tuesday, a market source said.

There was $750 million of 2.05% three-year notes sold at Treasuries plus 100 bps, at the tightest side of guidance set in the Treasuries plus 105 bps area and inside initial talk in the 110 bps area over Treasuries.

A $450 million floating-rate tranche of three-year notes sold at par to yield Libor plus 100 bps.

Guidance was at the Libor equivalent to the fixed-rate tranche.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Lloyds Securities LLC, Morgan Stanley & Co. LLC and TD Securities are the bookrunners.

The London-based retail bank will use proceeds for general corporate purposes.

Transcontinental 10-years

Transcontinental priced $1 billion of 7.85% 10-year senior notes (Baa2/BBB-/BBB) on Tuesday at 99.825 to yield 7.875%, or Treasuries plus 583.5 bps, a market source said.

The yield printed at the tight side of guidance set in the 8% area.

Proceeds will be used to repay debt.

Bookrunners were Barclays, JPMorgan, RBC Capital Markets LLC, TD Securities and Scotia Capital.

The interstate natural gas transmission company and subsidiary of Williams Partners LP is based in Tulsa, Okla.

Lloyds trades tighter

In the secondary market, Lloyds Bank’s existing 2.7% bonds due Aug. 17, 2020 were 1 bp better on the day at 93 bps bid.

The $1 billion of notes priced with a 110 bps spread over Treasuries on Aug. 10.

Shell bonds firm

Shell International Finance’s 2.125% notes due 2020 firmed 6 bps to 76 bps bid on Tuesday, according to a market source.

Shell sold $2 billion of the five-year notes (A1/AA/) on May 6, 2015 at a spread of Treasuries plus 60 bps.

And its 4.3% notes due 2019 firmed 3 bps over the day to 105 bps bid.

Shell sold $2 billion of the notes on Sept. 15, 2009 at Treasuries plus 90 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

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