Bank of America sells $6 billion notes; World Bank prices $5 billion; new supply strong

By Cristal Cody

Tupelo, Miss., July 18 – Bank of America Corp. tapped the high-grade primary market on Wednesday with a $6 billion three-tranche offering of notes.

The deal had a combined final book size of $11.3 billion.

Also in the primary market on Wednesday, the International Bank for Reconstruction and Development, or World Bank, sold $5 billion of three-year global notes in its first benchmark offering in 2018.

The new issue had a final order book of $7.3 billion from more than 125 investors in 33 countries.

“This is a fantastic result for our first U.S. dollar global benchmark of the fiscal year,” Arunma Oteh, vice president and treasurer at World Bank, said in a news release.

Adrien De Naurois, head of EMEA debt syndicate and SSA origination at co-bookrunner BofA Merrill Lynch, said in the release that the deal offered the “tightest spread to U.S. Treasuries in the SSA sector in 2018.”

John Lee-Tin, head of SSA DCM at co-bookrunner JPMorgan Securities LLC, said the demand was a “fabulous result considering that we are in the middle of the summer.”

The Canadian high-grade primary market also was active during the session.

CI Financial Corp. was expected to price five-year senior debentures (/BBB+/DBRS: A) led by bookrunners CIBC World Markets Inc. and National Bank Financial Inc., according to a market source. S&P Global Ratings said in a ratings release that the deal size was expected in the C$250 million to C$400 million range.

Also, TransAlta Corp. indirect subsidiary TransAlta OCP LP launched approximately C$345 million of 4.509% amortizing notes due Aug. 5, 2030 (DBRS: BBB) in a private placement offering on Wednesday, according to a market source and a news release.

RBC Dominion Inc. and BMO Nesbitt Burns Inc. are the bookrunners.

More than $27 billion of high-grade bonds have priced week to date, with more than $15 billion of paper brought on Monday.

Syndicate sources expected about $25 billion of deal volume for the week.

The Markit CDX North American Investment Grade 30 index ended mostly unchanged at a spread of 60 basis points.

BofA prices $6 billion

Bank of America sold $6 billion of notes (A3/A-/A+) in three tranches on Wednesday, according to a market source.

The bank priced $500 million of six-year floating-rate notes at par to yield Libor plus 96 bps.

Bank of America sold $2.5 billion of 3.864% six-year fixed-to-floating-rate notes at par to yield a spread of Treasuries plus 110 bps. The rate will convert to Libor plus 94 bps after the initial fixed-rate period.

In the final tranche, the bank sold $3 billion of 4.271% fixed-to-floating-rate notes due July 23, 2029 at par to yield a spread of 140 bps over Treasuries. The notes will convert to Libor plus 131 bps after the initial fixed-rate period.

BofA Merrill Lynch was the bookrunner.

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

World Bank prices $5 billion

World Bank announced it sold $5 billion of 2.75% global notes due July 23, 2021 (Aaa/AAA/AAA) at 99.766 to yield 2.832% on Wednesday.

The notes priced at a spread of mid-swaps minus 5 bps, or Treasuries plus 14.95 bps.

The issue was initially talked to price with a spread in the mid-swaps minus 3 bps area with guidance later revised to mid-swaps minus 4 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities and Morgan Stanley & Co. LLC are the bookrunners.

World Bank priced the notes as its first benchmark offering of 2018 and as part of the launch of its benchmark program for fiscal year 2019, which began July 1. The issuer’s last global benchmark U.S. dollar-denominated bond offering priced in November.

The global development financing cooperative is based in Washington, D.C.

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