PNC, Citrix, Lear tap high-grade market; Council of Europe, FHLBank price; inflows dip

By Cristal Cody

Tupelo, Miss., Feb. 20 – The investment-grade primary market remained active on Thursday with a handful of issuers following more than $29 billion of volume in the previous two sessions.

PNC Bank, NA priced a $1.5 billion two-part offering of three-year subordinated notes.

Citrix Systems, Inc. sold $750 million of 10-year split-rated senior notes after holding fixed income investor calls on Wednesday.

Lear Corp. brought $650 million of new and reopened senior notes in two parts.

Meanwhile, the sovereign, supranational and agency primary market was active during the session.

The Council of Europe Development Bank sold $1 billion of five-year senior global notes.

In addition, the Federal Home Loan Bank System priced $2 billion of new three-year Global bonds.

Week to date, more than $32 billion of high-grade corporate bonds have priced.

About $25 billion to as much as $40 billion of deal volume was forecast by market sources for the holiday-shortened week.

Corporate investment-grade fund inflows remained strong over the past week ended Wednesday but down from the prior week.

Inflows totaled $5.14 billion, compared to $6.23 billion of inflows reported in the previous week and $4.9 billion in the prior week, according to Lipper US Fund Flows on Thursday.

Net inflow year to date totals more than $39 billion.

The Markit CDX North American Investment Grade 33 index softened nearly 1 basis point to close Thursday at a spread of 45.3 bps.

PNC Bank prices $1.5 billion

PNC Bank priced $1.5 billion of subordinated notes due Feb. 24, 2023 (A2/A-/A+) in its offering, according to a market source.

The company sold $1 billion of three-year floating-rate notes at Libor plus 32.5 bps.

A $500 million tranche of 1.743% three-year fixed-to-floating-rate notes priced at a spread of Treasuries plus 35 basis points.

The issue was talked to price at the mid-to-high 40 bps over Treasuries area.

The rate will reset to a floating rate of Libor plus 32.3 bps after the initial fixed-rate period.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and PNC Capital Markets LLC were the bookrunners.

PNC Bank is a subsidiary of PNC Financial Services Group, Inc., a Pittsburgh-based financial services holding company.

Citrix prices $750 million

Citrix Systems priced $750 million of 3.3% 10-year split-rated senior notes (Ba1/BBB/BBB) at a spread of Treasuries plus 185 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes were initially talked to price with a spread in the Treasuries plus 185 bps area.

The issue was sold at 99.35 to yield 3.377%.

Bookrunners were BofA Securities, Inc., Deutsche Bank Securities Inc., J.P. Morgan, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Wells Fargo Securities LLC.

The real estate investment trust for housing and health care properties is based in Chicago.

Lear sells new, reopened notes

Lear priced $650 million of new and reopened senior notes (Baa2/BBB-/) during the session, according to a market source and an FWP filing.

The company priced $350 million of new 3.5% 10-year notes at 99.774 to yield 3.525% and a spread of Treasuries plus 200 bps.

Initial price talk was in the Treasuries plus 215 bps area.

Lear priced a $300 million add-on to its 5.25% notes due May 15, 2049 at 106.626 to yield 4.821%, or a Treasuries plus 285 bps spread.

The notes were initially talked to price at the Treasuries plus 290 bps to 295 bps area.

Lear originally sold $325 million of the 5.25% notes on April 29, 2019 at 98.32 to yield 5.363% and a Treasuries plus 240 bps spread. The total outstanding is now $625 million.

Barclays, BofA Securities, J.P. Morgan, Citigroup and HSBC Securities (USA) Inc. were the bookrunners.

Lear is a Southfield, Mich.-based manufacturer and distributor of automotive seating and electrical systems.

Council of Europe sells $1 billion

Also Thursday, the Council of Europe Development Bank (Aa1/AAA/AA+) priced $1 billion of 1.375% five-year senior global notes at mid-swaps plus 8 bps, or a Treasuries plus 6.7 bps spread, according to a market source and an FWP filing.

Initial price talk was at the mid-swaps plus 9 bps area.

The notes priced at 99.64 to yield 1.45%.

BNP Paribas, BofA Securities, Deutsche Bank Securities Inc. and TD Securities (USA) LLC were the bookrunners.

The Paris-based Council of Europe Development Bank finances social projects to member states, financial institutions and local authorities for projects including public infrastructure and low-income housing.

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