Session quiet after heavy volume; deal supply thins; Morgan Stanley, Wells Fargo firm

By Cristal Cody

Tupelo, Miss., Jan. 19 – The high-grade bond market stayed fairly quiet on Friday with no new volume following a heavy week of bank and financial issuance.

Citigroup Inc., Westpac Banking Corp., Deutsche Bank AG, New York Branch and PNC Bank, NA, Wells Fargo Bank NA, JPMorgan Chase & Co. and ANZ New Zealand International Ltd., Morgan Stanley, Goldman Sachs Group Inc., Bank of America Corp., Toronto-Dominion Bank, U.S. Bank NA and Jefferies Group LLC all priced new paper over the week.

Looking ahead to the upcoming week, syndicate sources expect issuance to be lighter with about $20 billion to $25 billion of volume forecasted.

Coming up, Canada Pension Plan Investment Board funding arm CPPIB Capital Inc. is marketing an offering of notes.

Elsewhere, new bank and financial paper priced during the week traded mostly flat to tighter in the secondary market on Friday.

The $7.5 billion of series I global medium-term senior notes that Morgan Stanley (A3/BBB+/A) sold on Thursday in three tranches tightened about 2 basis points to 6 bps.

Bank of America Corp.’s $5.25 billion of notes (A3/A-/A) priced in four tranches on Thursday were flat to about 5 bps tighter on Friday.

Wells Fargo Bank NA’s $6 billion of senior bank notes (Aa2/AA-/AA-) brought to the primary market in four tranches on Tuesday firmed about 1 bp to 3.5 bps.

CPPIB markets notes

CPPIB Capital (Aaa/AAA/AAA) is in the deal pipeline with a Rule 144A and Regulation S offering of U.S. dollar-denominated three-year notes, according to a market source.

Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and TD Bank Securities (USA) LLC are the bookrunners.

CPPIB Capital is a Toronto-based investment management company for the Canada Pension Plan Investment Board.

Morgan Stanley tightens

In the secondary market, Morgan Stanley’s floating-rate notes due Feb. 10, 2021 tightened to 49 bps bid, 46 bps offered, a source said.

The company sold $2 billion of the notes on Thursday at par to yield Libor plus 55 bps.

Morgan Stanley’s 3.772% fixed-to-floating-rate notes due Jan. 24, 2029 improved to 111 bps bid, 110 bps offered in the secondary market.

The $3 billion tranche priced at par to yield a spread of Treasuries plus 117 bps in Thursday’s offering.

Morgan Stanley is a New York-based financial products and services company.

Bank of America mixed

Bank of America’s 3.366% fixed-to-floating-rate notes due Jan. 23, 2026 traded on Friday at 82 bps bid, 80 bps offered, according to a market source.

The bank sold $2 billion of the notes on Thursday at a spread of 82 bps over Treasuries.

Bank of America’s $1.25 billion tranche of 3.946% fixed-to-floating-rate notes due Jan. 23, 2049 tightened to 100 bps bid, 97 bps offered.

The bonds priced with a Treasuries plus 105 bps spread.

Bank of America is a financial services company based in Charlotte, N.C.

Wells Fargo Bank firms

Wells Fargo Bank’s 2.6% notes due Jan. 15, 2021 tightened to 46.5 bps bid, 46 bps offered in secondary trading, a market source said.

The bank sold $2.5 billion of the notes on Tuesday at a spread of 50 bps over Treasuries.

Wells Fargo Bank is a subsidiary of San Francisco-based Wells Fargo & Co.

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