Morning Commentary: Nationwide Building Society offers two tranches; week’s deal volume heavy

By Cristal Cody

Tupelo, Miss., March 1 – At least two issuers are marketing new bonds to price over Thursday’s session, according to early reports from market sources.

Nationwide Building Society (Aa3/A/A+) is offering a benchmark two-part sale of fixed-to-floating rate notes in a Rule 144A and Regulation S deal on Thursday, a source said.

The notes due March 8, 2024 were initially talked to price with a spread in the Treasuries plus 125 basis points to 130 bps area.

The tranche of notes due March 8, 2028 were initially talked to price in the Treasuries plus 155 bps to 160 bps area.

Meanwhile, Nederlandse Waterschapsbank NV (Aaa/AAA) plans to price $250 million of senior floating-rate notes due Aug. 9, 2019 on Thursday, according to a market source.

The notes were initially talked to price in the Libor plus 1 bp area.

HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. are the lead managers of the Rule 144A and Regulation S offering.

New bond issuance was heavy over the first three sessions of the week.

“After a subdued start earlier in February, high-grade supply volumes are now surprising to the upside,” BofA Merrill Lynch analysts said in a note released on Thursday. “Already $35 [billion] has been priced during the first three days of this week, including $14 [billion on Wednesday], making it the second busiest week this year.”

Supply is expected to be robust in March, sources report.

About $25 billion to $30 billion of total bond issuance was predicted by market sources for the final week of February.

Investment-grade secondary trading volume also has been busy over the week. On Wednesday, $22.99 billion of bonds were traded, compared to $21.34 billion on Tuesday and $22.18 billion on Monday, according to Trace.

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