Bank of Montreal prices sustainability bond; Finnvera, IBRD sell notes; deal volume thins

By Cristal Cody

Tupelo, Miss., Oct. 16 – Bank of Montreal priced a $500 million inaugural offering of three-year sustainability notes in the high-grade primary market on Wednesday.

In other supply, the International Bank for Reconstruction and Development, or World Bank, sold $2 billion of 10-year global notes on top of talk.

Also, Finnvera plc priced $1 billion of five-year notes tighter than guidance.

Week to date, more than $4 billion of corporate bonds have priced, along with $3 billion of notes in the sovereign, supranational and agency market.

Corporate volume so far this week has been led by Charter Communications, Inc.’s $1.5 billion of split-rated registered senior secured notes due March 1, 2050 and Credit Agricole SA (London Branch)’s $1.5 billion of senior notes due Jan. 22, 2025 that priced Tuesday.

Deal volume is expected to be lighter over the holiday-shortened market week with about $10 billion to $15 billion of high-grade issuance forecasted by market participants.

Bank earnings remain in focus with the potential for financial supply following the releases, market sources report.

On Wednesday, Bank of America Corp. released its third quarter earnings report before the financial markets opened. Morgan Stanley is scheduled to release its profit report on Thursday. JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. released quarterly results on Tuesday.

The Markit CDX North American Investment Grade 33 index ended the session mostly unchanged at a spread of 56 basis points.

Bank of Montreal prices $500 million

Bank of Montreal (Aa2/A+/AA-) priced $500 million of 2.05% three-year senior medium-term sustainability notes on Wednesday at a spread of 53 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial price talk was in the Treasuries plus 70 bps spread area.

The inaugural offering of sustainability bonds priced at 99.883 to yield 2.09%.

BMO Capital Markets Corp., BNP Paribas Securities Corp., Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. were the bookrunners.

The Montreal-based bank plans to use the proceeds in accordance with its sustainable financing framework.

IBRD prices $2 billion

World Bank priced $2 billion of 1.75% global notes due Oct. 23, 2029 (Aaa/AAA/AAA) on Wednesday at mid-swaps plus 20 bps, or a spread of 12.2 bps over Treasuries, according to a market source.

The 10-year notes were initially talked to print in the mid-swaps plus 20 bps area.

BofA Securities, Inc., Citigroup, J.P. Morgan Securities LLC and RBC Capital Markets, LLC were the bookrunners.

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

Finnvera raises $1 billion

Finnvera (Aa1/AA+/) priced $1 billion of 1.625% notes due Oct. 23, 2024 in a Rule 144A and Regulation S offering on Wednesday at mid-swaps plus 17 bps, or a spread of Treasuries plus 16.05 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 19 bps area.

Citigroup, Goldman Sachs & Co. LLC, HSBC and TD Securities (USA) LLC were the bookrunners.

Finnvera is a government-owned financing company based in Kuopio, Finland.

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