CPPIB prices $1 billion; supply thin; First Citizens plans deal; credit spreads widen

By Cristal Cody

Tupelo, Miss., Feb. 26 – Investment-grade supply remains thin week to date with just one reported issuer on Wednesday.

CPPIB Capital Inc. priced $1 billion of five-year notes in a Rule 144A and Regulation S deal during the session.

In other action, First Citizens BancShares, Inc. marketed $300 million of registered fixed-to-floating-rate subordinated notes due 2030.

The offering follows Fulton Financial Corp.’s $375 million sale of fixed-to-floating rate subordinated notes in two tranches on Tuesday.

Week to date, only two reported high-grade bond issuers have priced notes.

About $25 billion to $30 billion of investment-grade deal volume was expected this week.

Fannie Mae announced Tuesday that it would skip issuing any Benchmark Notes on the scheduled date. Fannie Mae’s next scheduled date to offer Benchmark Notes is on March 3.

Issuers have pulled back from tapping the primary market amid increasing fears of a coronavirus pandemic as the number of infections globally continues to rise.

Stocks had plunged on Monday and Tuesday and remained mostly weak on Wednesday with only the Nasdaq closing in the positive.

Treasuries have rallied in the risk-off bid with the 10-year benchmark hitting all-time yield lows on Tuesday and Wednesday.

The 10-year benchmark ended Wednesday 2 basis points improved at 1.31% after touching an all-time yield low of 1.3%.

High-grade credit spreads have widened more than 11 bps since the start of the week.

The Markit CDX North American Investment Grade 33 index closed Wednesday more than 2 bps wider at a spread of 57.71 bps.

In the secondary market, Energy Transfer Operating LP 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) rallied on Wednesday.

The paper improved to 103.27 from 102.97 on Tuesday and traded 2 bps better on the day, sources said.

On Tuesday, the notes headed out 7 bps wider.

The Dallas-based natural gas midstream and intrastate transportation and storage company sold $1.5 billion of the bonds on Jan. 7 at 99.843 to yield 3.769% and a Treasuries plus 255 bps spread.

CPPIB sells five-year notes

CPPIB Capital (Aaa/AAA/AAA) priced $1 billion of 1.25% five-year notes on Wednesday at mid-swaps plus 16 bps, or a spread of Treasuries plus 16.35 bps, according to a market source.

Price guidance was in the mid-swaps plus 16 bps area.

Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and RBC Capital Markets LLC were the bookrunners of the Rule 144A and Regulation S offering.

The notes are guaranteed by the Canada Pension Plan Investment Board.

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

First Citizens offers fixed/floaters

First Citizens BancShares plans to price $300 million of 10-year fixed-to-floating-rate subordinated notes (Baa1//), according to 424B5 and FWP filings with the Securities and Exchange Commission on Wednesday.

The fixed rate will reset in 2025 to but excluding the maturity date to a floating rate based on the SOFR benchmark.

Piper Sandler & Co. is the bookrunner.

First Citizens BancShares is a bank holding company based in Raleigh, N.C.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.