Foreign financials join Magna International in primary; Magna tightens; spreads ease

By Aleesia Forni and Cristal Cody

Virginia Beach, June 11 – The high-grade market’s pace slowed on Wednesday, with $6.55 billion of new issuance pricing during the session.

Despite a slightly weaker tone to the day’s market, a handful of new issuers made their way to the primary.

Credit Suisse AG priced a $2.5 billion offering of perpetual bonds during the session, while Magna International Inc. sold an upsized $750 million issue.

There were also new issues priced by European Investment Bank and NRW.Bank.

All four of the new deals sold in line with price talk.

Even with the quieter primary on Wednesday, the high-grade market has seen more than $25 billion of supply, beating earlier estimates of a $20 billion to $25 billion week.

Investment-grade paper traded slightly wider on the day, and spreads ended softer, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 2 basis points to a spread of 59 bps on Wednesday.

Trading volume was just under $9 billion as the session closed, a trader said.

Magna’s 3.625% notes due 2024 tightened 5 bps on the offered side in aftermarket trading.

No markets were seen late afternoon in Indianapolis Power’s 4.5% bonds due 2044, according to a trader.

“Nothing on the Indiana’s,” the trader said.

Credit Suisse tier 1 bonds

The high-grade primary market saw Credit Suisse pricing $2.5 billion of tier 1 bonds at par to yield 6.25%, according to a market source.

The notes sold in line with talk via Rule 144A and Regulation S.

Credit Suisse Securities (USA) LLC was the bookrunner.

The financial services company is based in Zurich.

Magna upsizes

There was also an upsized deal from Magna International sold during the session.

The company priced $750 million of 3.625% 10-year bonds (Baa1/A-/) in line with talk at 100 bps over Treasuries, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.875 to yield 3.64%.

Magna’s 3.625% notes due 2024 headed out better at 95 bps offered in the secondary market, according to a trader.

BofA Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Scotia Capital (USA) Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include capital expenditures and acquisitions, according to a filing with the SEC.

Magna is an automotive supplier based in Aurora, Ont.

NRW.Bank prices floaters

NRW.Bank sold $300 million of floating-rate notes (Aa1/AA-/) due June 18, 2018 at par to yield Libor plus 15 bps, a market source said.

The notes sold in line with talk.

Morgan Stanley & Co. LLC and BofA Merrill Lynch were the joint bookrunners.

The financial development products and services company is based in Dusseldorf, Germany.

EIB sells $3 billion

European Investment Bank issued $3 billion of 1% three-year bonds on Wednesday at 99.712 to yield mid-swaps flat early during Wednesday’s session, a market source said.

Pricing was in line with talk.

HSBC, Morgan Stanley and J.P. Morgan Securities LLC were the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

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