Quiet deal streak breaks; Bank of Montreal, Toyota, PacifiCorp, Japan Bank, EIB price

By Cristal Cody

Tupelo, Miss., July 10 – After more than a week of radio silence in the corporate high-grade primary market, several issuers priced new bonds on Tuesday.

Bank of Montreal sold $2.25 billion senior medium-term notes in two parts.

Toyota Motor Corp. brought $2 billion of fixed-rate senior notes in three tranches on Tuesday following marketing at the end of June.

Also, PacifiCorp placed $600 million of 31-year first mortgage bonds.

In other high-grade supply, Japan Bank for International Cooperation priced $3.5 billion of guaranteed senior bonds in three tranches on the tight side of guidance.

The European Investment Bank also sold $4 billion of five-year global notes better than price talk.

On Monday, the Commonwealth Bank of Australia priced $1.25 billion of five-year covered bonds as the sole reported issuer in the primary market.

Syndicate sources forecast about $15 billion to $20 billion of deal supply this week, a marked pickup from zero corporate issuance in the previous holiday week and less than $5 billion of volume in the prior week.

The Markit CDX North American Investment Grade 30 index closed mostly unchanged at a spread of 62 basis points after tightening about 2 bps on Monday.

BMO prints $2.25 billion

Bank of Montreal (A1/A+/AA-) priced a $2.25 billion two-part offering of senior medium-term notes due July 13, 2020 on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The $1.25 billion tranche of floating-rate notes priced at par to yield Libor plus 34 bps.

The bank sold $1 billion of 3.1% two-year fixed-rate notes at 99.881 to yield 3.162%, or a spread of 58 bps over Treasuries.

BMO Capital Markets Corp., BofA Merrill Lynch, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners.

Bank of Montreal is a Montreal-based banking and financial services provider.

Toyota prices $2 billion

Toyota Motor sold $2 billion of fixed-rate senior notes (Aa3/AA-/A) in three tranches on the tight side of guidance, according to a market source.

The company sold $750 million of 3.183% three-year notes at a spread of Treasuries plus 50 bps. The notes were initially talked to price at a spread in the Treasuries plus 62.5 bps area and later guided to come in the Treasuries plus 52 bps area, plus or minus 2 bps.

Toyota priced $750 million of 3.419%% five-year notes at a spread of 65 bps over Treasuries, tighter than initial talk in the Treasuries plus 77.5 bps spread area and better than later guidance in the Treasuries plus 67 bps area, plus or minus 2 bps.

The company sold $500 million of 3.669% 10-year notes at an 80 bps over Treasuries spread. The notes were guided to print in the Treasuries plus 82 bps area, plus or minus 2 bps. Initial price talk on the 10-year notes was in the Treasuries plus 97.5 bps area.

J.P. Morgan Securities LLC, BofA Merrill Lynch and Citigroup Global Markets Inc. were the bookrunners.

Toyota is a multinational automotive manufacturer headquartered in Aichi, Japan.

PacifiCorp sells bonds

PacifiCorp (A3/A/A-) sold $600 million of 4.125% first mortgage bonds due Jan. 15, 2049 on Tuesday at 99.776 to yield 4.138%, or a spread of Treasuries plus 117 bps, according to an FWP filing with the SEC.

Mizuho Securities USA LLC, MUFG, PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America Inc., BMO Capital Markets and CIBC Capital Markets Corp. were the bookrunners.

The regulated electric company and subsidiary of Berkshire Hathaway Energy Co. is based in Portland, Ore.

Japan Bank brings $3.5 billion

Japan Bank for International Cooperation priced $3.5 billion of guaranteed senior bonds (A1/A+/) in three tranches on Tuesday, according to a market source and an FWP filing with the SEC.

The bank sold $1 billion of 3.125% notes due July 20, 2021 at 99.997 to yield 3.126%. The notes priced at a spread of mid-swaps plus 24 bps, or Treasuries plus 45.4 bps. The notes were initially talked to price in the mid-swaps plus 28 bps area.

Japan Bank priced $1.5 billion of 3.25% five-year bonds at 99.936 to yield 3.264%. The notes were placed at mid-swaps plus 35 bps, or Treasuries plus 50 bps spread.

Initial price talk on the notes due July 20, 2023 was in the mid-swaps plus 40 bps area.

The final $1 billion tranche of 3.25% notes due July 20, 2028 priced at 99.005 to yield 3.368%. The notes were sold with a Treasuries plus 50.1 bps spread, or mid-swaps plus 42 bps.

The 10-year notes were initially talked to price with a spread in the mid-swaps plus 43 bps area.

BofA Merrill Lynch, Barclays, Mizuho Securities USA Inc. and Nomura International plc were the bookrunners.

The financial institution is based in Tokyo.

EIB raises $4 billion

The European Investment Bank (Aaa/AAA/AAA) priced a $4 billion offering of 2.875% five-year global notes on Tuesday at a spread of mid-swaps plus 7 bps, or Treasuries plus 21.65 bps, according to a market source.

The notes due Aug. 15, 2023 were initially talked to price in the mid-swaps plus 8 bps area.

Deutsche Bank Securities Inc., J.P. Morgan Securities and TD Securities (USA) LLC were the bookrunners.

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

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