Scotiabank prices notes; Patterson-UTI markets notes; Texas Eastern Transmission firms

By Cristal Cody

Tupelo, Miss., Jan. 5 – Bank of Nova Scotia came to the primary market on Friday with $1.5 billion of three-year senior notes in two tranches.

Deal action is expected to be strong in the week ahead with about $25 billion to $30 billion of supply forecasted, according to sources.

Coming up, Patterson-UTI Energy, Inc. intends to hold fixed-income investor calls for a bond offering.

High-grade volume has been steady since the markets opened for the New Year with more than $21 billion of bonds priced over the week.

Inflows to investment-grade bonds increased while flows for stocks turned negative in the first week of 2018, according to a research note from BofA Merrill Lynch analyst Yuri Seliger.

“Inflows into U.S. bond high grade funds and ETFs recovered this past week from a holiday-related slowdown a week earlier,” Seliger said. “In fact inflows to the all fixed income category reached $5.88 [billion] – the highest weekly inflow since October – and up from a $0.42 [billion] outflow in the prior week.”

Inflows to high grade rose to $3.24 billion from $500 million, according to the note.

“After three weekly consecutive outflows from short-term high grade, including $0.58 [billion] in the prior week, flows turned positive this past week with an inflow of $0.41 [billion],” Seliger said.

The Markit CDX North American Investment Grade 29 index closed the day less than 0.5 basis point tighter at a spread of 45.5 bps.

New bonds priced during the week traded mostly better in the secondary market.

Berkshire Hathaway Energy Co.’s 2.2 billion of senior notes (A3/A-/BBB+) priced in four tranches on Tuesday traded flat to about 3 bps tighter.

Texas Eastern Transmission, LP’s $800 million of senior notes placed on Thursday in a Rule 144A and Regulation S two-tranche deal tightened about 3 bps to 8 bps in the secondary market.

Scotiabank prices

Bank of Nova Scotia priced $1.5 billion of three-year fixed- and floating-rate senior notes (A1/A+/AA-) on Friday, according to an FWP filing with the Securities and Exchange Commission.

The company sold $500 million of the floaters at par to yield Libor plus 29 bps.

Scotiabank priced $1 billion of 2.5% three-year fixed-rate notes at 99.903 to yield 2.534%, or a spread of Treasuries plus 48 bps.

The bookrunners were Scotia Capital (USA) Inc., BofA Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Goldman Sachs & Co.

The bank is based in Toronto.

Patterson-UTI eyes deal

Patterson-UTI Energy plans to hold fixed-income investor calls on Monday and Tuesday for a $500 million Rule 144A and Regulation S offering of senior notes (Baa2/BBB/), according to market sources and a company news release.

BofA Merrill Lynch, Goldman Sachs and Wells Fargo Securities, LLC are the lead managers.

Proceeds will be used to repay debt under the company’s credit agreement and for general corporate purposes.

Houston-based Patterson-UTI provides onshore contract drilling and pressure pumping services to exploration and production companies.

Berkshire Hathaway mixed

In the secondary market, Berkshire Hathaway Energy’s 2.375% notes due Jan. 15, 2021 traded on Friday at 35 bps bid, 33 bps offered, a source said.

The company sold $450 million of the three-year notes on Tuesday at a spread of Treasuries plus 38 bps.

Berkshire Hathaway Energy’s 3.25% notes due April 15, 2028 were quoted at 83 bps bid, 80 bps offered.

The $600 million tranche of notes priced on Tuesday at a Treasuries plus 83 bps spread.

Berkshire-Hathaway Energy is a Des Moines-based holding company majority owned by Omaha-based Berkshire-Hathaway.

Texas Transmission firms

Texas Eastern Transmission’s 3.5% notes due Jan. 15, 2028 tightened to 102 bps bid, 100 bps offered in the secondary market, a source said.

The company (Baa1/BBB+/BBB+) sold $400 million of the 10-year notes on Thursday at a spread of 110 bps over Treasuries.

Texas Eastern Transmission’s $400 million of 4.15% notes due Jan. 15, 2048 firmed to 137 bps bid. The notes priced at a Treasuries plus 140 bps spread.

The company is a Houston-based natural gas storage and transporter provider and subsidiary of Spectra Energy.

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