Supply thins; American Honda prices $1.75 billion; Nordic Investment Bank plans deal

By Cristal Cody

Tupelo, Miss., July 11 – Primary action thinned on Wednesday with trade war fears in the forefront as the NATO summit kicked off amid additional proposed U.S. tariffs against China, market sources report.

American Honda Finance Corp. priced $1.75 billion of medium-term notes in three tranches as the sole reported high-grade issuer during the session.

Coming up on Thursday, Nordic Investment Bank plans to bring $1 billion of five-year global notes to the primary market.

Supply has been light over the past two weeks with no volume in the previous week and less than $5 billion of bond issuance in the prior week.

Corporate deal volume resumed Tuesday with new issues from Bank of Montreal, Toyota Motor Corp. and PacifiCorp.

Japan Bank for International Cooperation and the European Investment Bank also priced bonds.

On Monday, the Commonwealth Bank of Australia was the lone reported issuer with $1.25 billion of five-year covered bonds.

Syndicate sources expected about $15 billion to $20 billion of supply this week.

The Markit CDX North American Investment Grade 30 index eased about 1 basis point to end at a spread of 63 bps.

In the secondary market, bonds were mixed during the session.

Barclays plc’s 4.972% fixed-to-floating-rate notes due May 16, 2029 improved 2 bps on Thursday but traded more than 20 bps softer than issuance.

Walmart Inc.’s 3.7% notes due June 26, 2028 notes priced in June softened about 4 bps.

Honda brings three tranches

American Honda Finance priced $1.75 billion of medium-term notes (A2/A+/) in three tranches on Wednesday, according to a market source and FWP filings with the Securities and Exchange Commission.

The company sold $750 million of two-year floating-rate notes at par to yield Libor plus 26 bps.

American Honda placed $500 million of 3% two-year fixed-rate notes at a spread of Treasuries plus 50 bps. The notes priced at 99.865 to yield 3.074%.

The company also sold $500 million of 3.45% five-year notes at 99.827 to yield 3.488%, or a Treasuries plus 75 bps spread.

Barclays, BofA Merrill Lynch, SG Americas Securities, LLC and Wells Fargo Securities LLC were the bookrunners.

American Honda Finance is a Torrance, Calif.-based financing arm of American Honda Motor Co.

NIB offers $1 billion

Nordic Investment Bank (Aaa/AAA/) is marketing $1 billion of global notes due July 19, 2023 that were initially talked to price with a spread in the mid-swaps plus 5 bps area, according to an informed source.

The notes are expected to price on Thursday.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC and TD Securities (USA) LLC are the bookrunners.

Nordic Investment Bank is an international financial institution owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.

Barclays improves

Barclays’s 4.972% notes due May 16, 2029 (A2/A/A) firmed 2 bps in secondary trading to 218 bps bid, a market source said Thursday.

The $1.75 billion tranche of fixed-to-floating rate notes priced May 9 at par to yield a Treasuries plus 197 bps spread. The rate will reset to a floating rate of Libor plus 190.2 bps on May 16, 2028 to but excluding the maturity date.

The financial services company is based in London.

Walmart eases

Walmart’s 3.7% notes due June 26, 2028 eased about 4 bps on Thursday to 75 bps bid, according to a market source.

Walmart sold $2.75 billion of the notes at a Treasuries plus 80 bps spread on June 20 as part of a $16 billion nine-tranche deal.

The discount retailer is based in Bentonville, Ark.

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