Fannie Mae sells $4 billion notes; high-grade bonds mixed; Caterpillar Financial firms

By Cristal Cody

Eureka Springs, Ark., Oct. 21 – Fannie Mae priced $4 billion of three-year notes on Friday as the lone reported issuer in the investment-grade primary market.

Supply is expected to be strong in the week ahead, according to a market source.

Investment-grade bonds were mixed in secondary trading over the session on Friday with bank paper mostly flat.

Caterpillar Financial Services Corp.’s 2.4% medium-term notes due 2026 tightened 10 basis points on the day.

Mondelez International, Inc.’s notes that priced on Wednesday traded about 3 bps to 5 bps tighter earlier in the session.

The Markit CDX North American Investment Grade index closed unchanged at a spread of 74 bps.

Fannie Mae prices $4 billion

Fannie Mae priced $4 billion of 1% three-year Benchmark Notes at 99.732 to yield 1.091% on Friday, according to a news release.

The notes priced with a spread of 11.5 bps over Treasuries.

Barclays, J.P. Morgan Securities LLC and Nomura Securities International were the lead managers.

Fannie Mae is a mortgage credit provider based in Washington, D.C.

Caterpillar tightens

Caterpillar Financial Services’ 2.4% notes due 2026 traded 10 bps better going out on Friday at 78 bps bid, according to a market source.

The company sold $300 million of the notes on Aug. 4 at a spread of 90 bps over Treasuries.

Nashville, Tenn.-based Caterpillar Financial Services is a financing arm of heavy equipment maker Caterpillar Inc.

Mondelez improves

Mondelez International’s 1.625% notes due 2019 were quoted at 70 bps offered in secondary trading earlier on Friday, a source said.

The company sold $1.75 billion of the three-year notes on Wednesday at a spread of 75 bps over Treasuries.

The tranche of 2% notes due 2021 improved to 82 bps offered in the secondary market.

Mondelez priced $1.5 billion of the five-year notes in Wednesday’s sale at Treasuries plus 85 bps.

Mondelez is an East Hanover, N.J.-based manufacturer of biscuits, chocolate, gum, candy and other products.

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