Deal action strong; Citibank, Citigroup, Teachers Insurance, Pitney Bowes price; Disney mixed

By Cristal Cody

Tupelo, Miss., May 3 – High-grade volume kicked up higher than market sources expected with eight issuers tapping the primary market on Wednesday.

Activity was expected to be light with the Federal Reserve set to end its two-day monetary policy meeting on Wednesday.

Citibank, NA brought $2.25 billion of floating-rate notes to the primary market.

The Teachers Insurance and Annuity Association of America sold $2 billion of 30-year surplus notes.

Pitney Bowes Inc. priced a $400 million offering of five-year notes.

Northern Trust Corp. came with a $350 million offering of 15-year fixed-to-floating rate subordinated notes.

AvalonBay Communities, Inc. sold $400 million of 10-year medium-term notes.

Guardian Life Global Funding placed $400 million of five-year notes on Wednesday.

Citigroup Inc. priced a $250 million reopening of its 4.125% subordinated notes due July 25, 2028.

Also, Kommunalbanken AS priced a $500 million reopening of its senior floating-rate notes due June 16, 2020.

In other activity, Walt Disney Co.’s medium-term notes (A2/A+/A) priced in March were mixed in secondary trading on Wednesday but remain better than issuance. S&P raised Walt Disney’s credit and debt ratings to A+ from A during the session.

The Markit CDX North American Investment Grade index was mostly unchanged on Wednesday at a spread of 63 basis points.

Citibank taps primary

Leading the deal action, Citibank priced $2.25 billion of floating-rate notes (A1/A+/) due Nov. 9, 2018 on Wednesday at Libor plus 23 bps, according to a market source.

Citigroup Global Markets Inc. was the bookrunner.

Citibank is a Sioux Falls, S.D.-based commercial and consumer banking products and services company.

Teachers Insurance prices

Teachers Insurance and Annuity Association of America priced $2 billion of 4.27% 30-year surplus notes (Aa3/AA-/) on Wednesday at a spread of Treasuries plus 130 bps, according to a market source.

The notes were talked to price in the Treasuries plus 135 bps area, plus or minus 5 bps.

Citigroup Global Markets and J.P. Morgan Securities LLC were the bookrunners.

Teachers Insurance and Annuity Association of America is a New York City-based life insurance and retirement benefits provider for people in the academic, research, medical, government and cultural fields.

Pitney Bowes brings notes

Pitney Bowes priced a $400 million offering of 3.875% five-year notes (Baa3) on Tuesday at 99.543 to yield 3.976%, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa3/BBB-/) priced with a spread of Treasuries plus 215 bps.

The interest rate on the securities is subject to change upon a downgrade of the company’s ratings by either Moody’s or S&P Global Ratings.

Goldman Sachs & Co., HSBC Securities (USA) Inc. and J.P. Morgan Securities were the bookrunners.

Proceeds will be used with cash on hand to repay the company’s $150 million term loan due June 2017 and repay the company’s $385 million of 5.75% notes due September 2017.

The mail processing equipment company is based in Stamford, Conn.

Guardian Life sells bonds

Guardian Life Global Funding placed $400 million of 2.5% five-year notes with a spread of 70 bps over Treasuries on Wednesday, a market source said.

The notes priced on the tight side of guidance in the Treasuries plus 73 bps area, plus or minus 3 bps.

Deutsche Bank Securities Inc., Goldman Sachs and J.P. Morgan Securities were the lead managers.

Guardian Life Global Funding is a financing arm of New York City-based Guardian Life Insurance Company of America.

AvalonBay prints $400 million

AvalonBay Communities priced $400 million of 3.35% 10-year medium-term notes at 99.654 and a spread of 110 bps over Treasuries on Wednesday, according to a market source and an FWP filing with the SEC.

The notes (A3/A-/) were talked to price in the Treasuries plus 112.5 bps area, plus or minus 2.5 bps.

Deutsche Bank Securities and J.P. Morgan Securities were the lead managers.

The notes will be drawn from a $750 million MTN program.

Proceeds will be used to reduce debt under AvalonBay’s $1.5 billion unsecured revolving credit facility and for general corporate purposes.

The manager and developer of apartment communities is based in Arlington, Va.

Northern Trust sells notes

Northern Trust priced a $350 million offering of 3.375% fixed-to-floating rate subordinated notes due May 8, 2032 (A2/A/A+) at par to yield a spread of Treasuries plus 108 bps on Wednesday, according to an FWP filing with the SEC.

The rate on the notes will convert to Libor plus 113.1 bps from May 8, 2027 to but excluding the maturity date.

BofA Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.

The company plans to use the proceeds for general corporate purposes.

Northern Trust is a Chicago-based financial services company.

Citi sells $250 million tap

Citigroup priced a $250 million reopening of its 4.125% subordinated notes due July 25, 2028 (Baa3/BBB/A-) on Wednesday at a spread of 186 bps over Treasuries, according to a market source.

The notes priced at 99.559 to yield 4.174%.

The deal had strong demand with a final book size of more than $1 billion.

Citigroup originally sold $1.5 billion of the notes on July 18 at a Treasuries plus 258 bps spread. The total outstanding now is $1.75 billion.

Citigroup Global Markets was the bookrunner.

Citigroup is a financial services company based in New York.

Kommunalbanken reopens

In other issuance on Wednesday, Kommunalbanken priced a $500 million reopening of its senior floating-rate notes due June 16, 2020 at par to yield Libor plus 5 bps, according to a market source.

The notes were initially talked to price in the Libor plus 6 bps area.

Barclays, Daiwa Capital Markets Europe Ltd. and Toronto-Dominion Bank were the stabilizing managers for the notes, which are expected to have a stabilization period from May 3 through June 9.

The government-funded lender to municipalities is based in Oslo.

Walt Disney mixed

Walt Disney’s 1.95% notes due March 4, 2020 softened about 1 bp to 34 bps bid, according to a market source.

Walt Disney sold $400 million of the three-year notes on March 1 at a spread of Treasuries plus 40 bps.

The company’s 2.45% notes due March 4, 2022 firmed 2 bps to 45 bps bid in secondary trading.

Walt Disney priced the $500 million tranche at a spread of 50 bps over Treasuries.

Walt Disney is a Burbank, Calif.-based entertainment and media company.

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