Scotiabank adds on; Oracle bonds tighten; spreads mixed overall; busy May predicted

By Aleesia Forni

Virginia Beach, May 1 – A volatile week for the investment-grade market closed on a quiet note on Friday.

While Bank of Nova Scotia sold a $300 million add-on to its existing 1.85% covered bond due 2020 in the day’s only new issue activity, spreads were mixed in the secondary market.

The Markit CDX North American Investment Grade series 23 index tightened 1 basis point to a spread of 62 bps.

Recent deals from Oracle Corp. and Amgen Inc. made up some earlier losses on Friday to close the week mostly tighter.

This stronger performance is setting the stage for what is predicted to be a frenzied month of new issuance for May, with around $130 billion of supply predicted for the month.

Meanwhile, Lipper reported $1.528 billion of inflows into corporate investment-grade funds, bringing the year-to-date total to more than $27.6 billion of inflows.

Scotiabank adds on

Bank of Nova Scotia priced a $300 million tap of its existing 1.85% covered bonds due April 14, 2020 at Treasuries plus 50.5 bps on Friday, according to an FWP filed with the Securities and Exchange Commission.

The notes (Aaa/AAA/AAA) priced at 99.288 to yield 2.002%.

Bookrunners were Scotiabank and RBC Capital Markets LLC.

The issue’s total size is now $1.4 billion, including $1.1 billion priced on April 7.

The financial services company has its principal offices in Halifax, N.S.

Oracle notes firm

Oracle’s $10 billion of senior notes (A1/AA-/A+), which sold in six tranches on Tuesday, was trading tighter compared to levels seen earlier this week.

The company’s $2.5 billion 2.5% note due 2022 traded 5 bps better at 78 bps bid.

Pricing was at Treasuries plus 80 bps.

Its $2.5 billion 2.95% note due 2025 was quoted 6 bps weaker at 98 bps bid, 96 bps offered.

The notes sold with a spread of Treasuries plus 100 bps.

The company’s new $500 million of 3.25% notes due 2030, which sold with a spread of Treasuries plus 130 bps, was trading 4 bps tighter at 142 bps bid.

A $1.25 billion 3.9% note due 2035 traded 6 bps tighter at 123 bps bid, 121 bps offered following pricing with a spread of Treasuries plus 125 bps.

The company’s $2 billion of 4.125% bonds due 2045 firmed 9 bps to 141 bps bid, having priced at Treasuries plus 145 bps.

Meantime, its $1.25 billion of 4.375% notes due 2055, which sold at a spread of Treasuries plus 170 bps, was quoted 5 bps better at 172 bps bid, 169 bps offered.

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

Proceeds will be used for general corporate purposes, possibly including stock repurchases, payment of cash dividends on common stock and funding future acquisitions.

The computer software and technology company is based in Redwood City, Calif.

Amgen bonds mixed

Amgen’s $3.5 billion of senior notes (Baa1/A/BBB), which also sold on Tuesday in four tranches, traded mostly tighter to close the week.

The company’s $750 million of 2.125% notes, which sold at Treasuries plus 75 bps, was quoted 3 bps wider at 81 bps bid.

Its $500 million of 2.7% notes was unchanged at 102 bps bid following pricing with a spread of 100 bps over Treasuries.

A $1 billion 3.125% note due 2025, which sold with a spread of Treasuries plus 120 bps, traded 1 bp better at 124 bps bid late Friday.

Amgen’s $1.25 billion of 4.4% bonds due 2045 also firmed 1 bps to 176 bps bid, 174 bps offered.

The notes sold with a spread of Treasuries plus 175 bps.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. were the bookrunners.

The company intends to use the net proceeds from this offering to repurchase additional shares of common stock under its stock repurchase program, to repay outstanding debt, including borrowings under a term loan credit agreement, and for general corporate purposes.

The manufacturer and marketer of human therapeutics based upon advances in cellular and molecular biology is based in Thousand Oaks, Calif.

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