Citigroup prices notes after strong earnings; Intel, Apple bonds tighten; calendar grows

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 19 – Citigroup Inc., Brambles USA Inc. and CubeSmart, LP offered new bond deals on Monday, as a weaker market backdrop and missed earnings took their toll on the asset class.

Morgan Stanley reported lower-than-expected third-quarter results due to global market volatility during the trading day, capping off what has been a disappointing earnings season for banks.

Citigroup, one of the few names to have reported positive earnings last week, entered the primary with a $3 billion offering of notes in two parts around 12 basis points inside initial price thoughts.

Brambles USA, meantime, sold a $500 million 10-year issue in its first entrance into the high-grade dollar market in more than five years, with the deal’s order book finishing at around four times oversubscribed.

And the forward calendar saw KfW and Bank Nederlandse Gemeenten NV added to the pipeline during the session, both announcing talk for deals expected to price on Tuesday.

Investment-grade bonds were mixed in secondary trading over the session.

Citigroup’s existing paper was mostly unchanged.

Bank of America Corp.’s 3.875% senior notes due 2025 traded 4 bps weaker.

Intel Corp.’s senior notes (A1/A+/A+) tightened 2 bps to 3 bps in the secondary market.

Apple Inc.’s bonds (Aa1/AA+/) headed out 2 bps to 3 bps better.

The Markit CDX North American Investment Grade 25 index firmed 1 bp on Monday to close at a spread of 80 bps.

Citigroup sells $3 billion

In the primary market, Citigroup priced on Monday a $3 billion offering of five-year fixed- and floating-rate notes (Baa1/A-/A), according to a market source.

A $2.7 billion 2.65% tranche of notes sold at 99.888 to yield 2.674%, or Treasuries plus 133 bps.

The issue sold tighter than talk set in the Treasuries plus 145 bps area.

A $300 million floating-rate piece sold at par to yield Libor plus 131 bps. Talk was at the Libor equivalent to the fixed-rate tranche.

Citigroup Global Markets Inc. is the bookrunner.

The financial services company is based in New York.

Brambles prices tight

Brambles USA priced $500 million of 4.125% 10-year senior notes (Baa1/BBB+) on Monday with a 212.5 bps spread over Treasuries, an informed source said.

The notes sold at 99.757 to yield 4.155%.

Price guidance was set in the Treasuries plus 215 bps area following talk in the Treasuries plus 240 bps area.

Bookrunners were BofA Merrill Lynch, Barclays and J.P. Morgan Securities LLC.

Proceeds will be used to refinance debt and for general corporate purposes.

The deal was done via Rule 144A and Regulation S.

The pallet and container manufacturer is based in Norcross, Ga.

CubeSmart taps market

Also on Monday, CubeSmart priced a $250 million offering of 4% 10-year guaranteed senior notes (Baa2/BBB) at Treasuries plus 200 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.735 to yield 4.032%.

The issue sold at the tight end of guidance set in the Treasuries plus 205 bps area, which had firmed from the Treasuries plus 225 bps area initial talk.

BofA Merrill Lynch and Wells Fargo Securities LLC were the joint bookrunners.

The notes are guaranteed by CubeSmart.

Proceeds will be used to repay all of the outstanding debt under the unsecured revolving portion of the company’s credit facility, for working capital and for other general corporate purposes, which may include the repayment or repurchase of other debt.

The real estate investment trust of self-storage facilities is based in Wayne, Pa.

KfW sets talk

KfW (Aaa/AAA) set price talk on Monday for a benchmark offering of three-year global notes in the area of mid-swaps plus 19 bps, according to a market source.

The bookrunners are BofA Merrill Lynch, BNP Paribas Securities Corp. and Goldman Sachs & Co.

The German government-owned development bank is based in Frankfurt.

BNG on deck

In other forward calendar news, Bank Nederlandse set price talk for a planned benchmark offering of notes (Aaa/AA+) due Oct. 29, 2018 in the area of mid-swaps plus 30 bps, according to a market source.

The deal is set to price on Tuesday.

Bookrunners are Morgan Stanley & Co. LLC, Nomura, RBC Capital Markets LLC and TD Securities.

The local government funding agency is based in the Hague, the Netherlands.

Citigroup notes steady

Citigroup’s 3.3% senior notes due 2025 were unchanged at 156 bps bid, a market source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Bank of America softens

Bank of America’s 3.875% senior notes due 2025 eased 4 bps to 167 bps bid during the session, a source said.

Bank of America sold $2.5 billion of the notes (Baa1/A-/A) on July 27 at a spread of 167 bps over Treasuries.

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

Intel firms

Intel’s 3.7% notes due 2025 firmed 3 bps to 116 bps bid in secondary trading on Monday, according to a market source.

Intel sold $2.25 billion of the notes on July 22 at a spread of Treasuries plus 140 bps.

The company’s 4.9% bonds due 2045 traded 2 bps better at 173 bps bid.

The bonds priced in a $2 billion tranche at Treasuries plus 185 bps in the July 22 offering.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

Apple tightens

Apple’s 3.2% notes due 2025 firmed 3 bps to 93 bps bid in the secondary market, a source said.

Apple sold $2 billion of the notes on May 6 at a spread of Treasuries plus 100 bps.

The company’s 4.375% notes due 2045 headed out 2 bps tighter at 140 bps bid.

Apple sold $2 billion of the bonds in the May 6 offering at 140 bps over Treasuries.

The computer and mobile communications device company is based in Cupertino, Calif.

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