JPMorgan, Citigroup price subordinated notes; JPMorgan firms; Wells Fargo mostly flat

By Aleesia Forni

Virginia Beach, Sept. 23 – JPMorgan Chase & Co., Citigroup Inc., Sysco Corp. and Digital Realty Trust Inc. priced new bond deals on Wednesday, with the Yom Kippur holiday and weaker market conditions again contributing to the primary’s slower place following a deluge of deals priced earlier this week.

Still, borrowers brought a reported $6.2 billion of investment-grade paper to market during the mid-week session.

JPMorgan Chase and Citigroup were each in the primary with $2 billion 12-year subordinated note offerings, respectively, both selling tight of initial price thoughts.

The session also hosted a $2 billion three-tranche offering priced by Sysco to help the company fund share repurchases.

Also, Digital Realty priced $950 million of senior notes in two parts to fund an acquisition, and International Bank for Reconstruction and Development (World Bank) sold a $1.25 billion two-year floater.

Roughly $26.2 billion of new issuance has entered the primary market this week, so far falling in line with earlier predictions.

Investment-grade bonds were mixed over the session.

Citigroup’s paper traded mostly flat to weaker in the secondary market.

JPMorgan Chase’s existing 3.9% senior holding company notes due 2025 firmed 2 basis points.

Morgan Stanley’s 4% senior notes due 2025 widened 6 bps in secondary trading.

Wells Fargo & Co.’s 3.55% senior holding company notes due 2025 were mostly unchanged.

BNP Paribas SA’s 4.375% tier 2 subordinated notes due 2025 were weaker earlier in the trading session.

Ford Motor Credit Co. LLC’s 4.134% senior notes due 2025 traded 10 bps wider on Wednesday.

The Markit CDX North American Investment Grade 25 index headed out about 1 bp softer at a spread of 84 bps.

JPMorgan subordinated notes

JPMorgan Chase was in the market on Wednesday with a $2 billion 4.25% offering of 12-year subordinated bonds priced at Treasuries plus 215 bps, tighter than initial talk set in the area of Treasuries plus 225 bps, according to an informed source.

The notes (Baa1/A-/A) sold at 99.655 to yield 4.287% via bookrunner J.P. Morgan Securities LLC.

Proceeds will be used for general corporate purposes.

The financial services company is based in New York City.

Citigroup new issue

Citigroup also priced on Wednesday a $2 billion offering of 12-year subordinated notes (Baa2/BBB+/A-), according to a market source.

The 4.45% notes sold at Treasuries plus 235 bps, or 99.54 to yield 4.5%.

Pricing was at the tight end of the Treasuries plus 240 bps area guidance, which had firmed from talk set in the Treasuries plus 245 bps area.

Citigroup Global Markets Inc. is the bookrunner.

The financial services company is based in New York.

Sysco three-parter prices

Sysco priced $2 billion of senior notes (A2/A-) in three tranches during the session, according to a market source and an FWP filed with the Securities and Exchange Commission.

A $750 million tranche of 2.6% five-year notes sold at 99.809 to yield 2.641%, or Treasuries plus 120 bps, and a $750 million 3.75% 10-year note sold at par with a spread of 160 bps over Treasuries.

There was also $500 million of 4.85% 30-year bonds sold at Treasuries plus 190 bps. Pricing was at 99.921 to yield 4.855%.

All three parts sold at the tight end of price guidance.

Goldman Sachs & Co., JPMorgan, TD Securities and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to fund a share repurchase, to repay about $500 million of outstanding commercial paper and for general corporate purposes.

Sysco is a Houston-based food service marketing and distribution company.

World Bank sells floaters

International Bank for Reconstruction and Development (World Bank) priced a $1.25 billion offering of two-year floating-rate global notes at Libor flat, a market source said.

Bookrunners for the issue (Aaa/AAA/AAA) are BMO Capital, Credit Suisse and Goldman Sachs & Co.

The issuer is based in Washington, D.C.

Digital Realty prices

Meantime, Digital Realty Trust priced $950 million of senior notes in two parts, according to a source away from the trade.

There was $500 million of 3.4% notes due Oct. 1, 2020 issued at a price of 99.777 to yield 3.449%. The issue sold with a spread of Treasuries plus 200 bps.

The company also priced $450 million of 4.75% notes due Oct. 1, 2025 at par, or Treasuries plus 260 bps.

San Francisco-based Digital Realty plans to use the proceeds to help fund its acquisition of Telx Holdings, Inc.

Bookrunners were BofA Merrill Lynch, Citigroup and Morgan Stanley & Co. LLC.

Digital Realty is a manager and owner of technology-related real estate and is based in San Francisco.

Bank/brokerage CDS costs flat

Investment-grade bank and brokerage CDS prices were flat on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs remained at 78 bps bid, 83 bps offered. Citigroup Inc.’s CDS costs were flat at 85 bps bid, 90 bps offered. JPMorgan Chase & Co.’s CDS costs were also flat at 79 bps bid, 82 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 58 bps bid, 63 bps offered.

Merrill Lynch’s CDS costs were flat at 81 bps bid, 86 bps offered. Morgan Stanley’s CDS costs ended unmoved at 86 bps bid, 89 bps offered. Goldman Sachs Group, Inc.’s CDS costs also remained at 95 bps bid, 97 bps offered.

Citigroup soft

Citigroup’s 3.3% senior notes due 2025 widened to 151 bps bid from the 143 bps area on Tuesday, 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.

JPMorgan firms

JPMorgan Chase’s 3.9% notes due 2025 firmed 2 bps to 150 bps bid, according to a market source on Wednesday.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at 155 bps over Treasuries.

The financial services company is based in New York City.

Morgan Stanley widens

Morgan Stanley’s 4% notes due 2025 widened 6 bps to 158 bps bid on Wednesday, according to a market source.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

Wells Fargo steady

Wells Fargo’s 3.55% notes due 2025 that priced on Monday traded mostly unchanged at 137 bps offered earlier in the day, according to a market source.

Wells Fargo sold $2.55 billion of the notes (A2/A+/AA-) at a spread of 137.5 bps over Treasuries.

The bank is based in San Francisco.

BNP Paribas eases

BNP Paribas’ 4.375% notes due 2025 were seen weaker in early trading at 237 bps offered, a market source said.

BNP Paribas sold $1 billion of the notes (Baa2/ BBB/A) on Monday at 230 bps over Treasuries.

The financial services company is based in Paris.

Ford Motor Credit widens

Ford Motor Credit’s 4.134% notes due 2025 widened 10 bps over the day to 202 bps bid, a market source said.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on July 30 at Treasuries plus 187.5 bps.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

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