ArcelorMittal, Mitsubishi UFJ, Inter-American Bank in primary; high-grade flows decline

By Cristal Cody

Tupelo, Miss., July 11 – ArcelorMittal tapped the high-grade primary market on Thursday with a $1.25 billion two-tranche offering of fixed-rate senior notes.

Mitsubishi UFJ Financial Group, Inc. also was marketing four tranches of registered fixed-rate senior notes due 2022, 2024, 2029 and 2039 during the session.

In addition, Inter-American Development Bank offered a $250 million reopening of its global floating-rate notes due March 15, 2022 on Thursday, according to a market source.

The series No. 712 notes were initially talked to price in the Libor plus 5 basis points area.

In other pricing action, First Capital Realty Inc. sold C$200 million of senior debentures due Jan. 22, 2027.

More than $24 billion of investment-grade corporate bonds have priced week to date.

About $15 billion to $20 billion of volume was expected by market sources for the week.

Lipper US Fund Flows reported Thursday that corporate investment-grade fund inflows declined to $570 million for the week ended Wednesday from $1.76 billion a week earlier.

Meanwhile, credit spreads eased on Thursday. The Markit CDX North American Investment Grade 32 index closed about 1 bp softer at a spread of 53 bps.

In other activity on Thursday, market sources are widely reporting they expect a rate cut of 25 bps to as much as 50 bps at the Fed’s July 30-31 monetary policy meeting following Federal Reserve chairman Jerome Powell’s two-day Congressional testimony.

Japan supply mixed

Mitsubishi joins several other Japanese issuers in offering dollar-denominated bonds this week.

The Japanese supply has included a $4.5 billion two-tranche offering of senior notes from Sumitomo Mitsui Financial Group Inc. on Monday, a $2.75 billion four-part offering of notes from Mizuho Financial Group, Inc. on Tuesday and a $2.5 billion three-part Rule 144A and Regulation S offering of notes on Wednesday from Panasonic Corp.

In addition, American Honda Finance Corp., a Torrance, Calif.-based financing arm of American Honda Motor Co. and part of Tokyo-based Honda Motor Co. Ltd., priced $1 billion of two-year floating-rate medium-term notes on Tuesday.

In the secondary market, the new Japanese issues traded mostly better than issuance, a market source said.

Mizuho Financial’s new notes traded about 2 bps to 3 bps tighter than issuance.

Sumitomo Mitsui’s notes were mixed and were last spotted with the five-year tranche 2 bps softer than issuance and the 10-year notes 2 bps tighter.

ArcelorMittal prices $1.25 billion

In new issuance, ArcelorMittal priced $1.25 billion of fixed-rate senior notes (Baa3/BBB-/BBB-) in two tranches on Thursday, according to FWP filings with the Securities and Exchange Commission.

The company sold $750 million of 3.6% five-year notes at 99.859 to yield 3.631%, or a spread of 175 bps over Treasuries.

A $500 million tranche of 4.25% 10-year notes priced at 99.004 to yield 4.374%. The notes were sold with a Treasuries plus 225 bps spread.

Bookrunners were BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., ING Financial Markets LLC, Santander Investment Securities Inc., SMBC Nikko Securities America, Inc. and SG Americas Securities, LLC.

ArcelorMittal is a steel manufacturer based in Luxembourg City.

First Capital Realty sells C$200 million

First Capital Realty sold C$200 million of senior debentures due Jan. 22, 2027 (Baa3/DBRS: BBB-) at par to yield 3.456% in a Canadian private placement offering on Thursday, according to a news release.

RBC Dominion Securities Inc., TD Securities Inc., BMO Nesbitt Burns Inc. and Scotia Capital Inc. were the lead managers.

First Capital Realty is a Toronto-based company that owns, develops and manages grocery-anchored properties.

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