Pace slows with AmEx, JBIC, McGraw Hill new issues; Goldman, Citigroup paper widens

By Aleesia Forni and Cristal Cody

Virginia Beach, May 20 – Investment-grade primary action slowed on Wednesday as the market focused on the release of the Federal Reserve minutes.

Issuers still priced more than $9.9 billion of paper during the session, pushing the week’s total supply to a staggering $49 billion.

The day’s primary hosted American Express Credit Corp., which sold $2.15 billion of five-year senior notes in fixed- and floating-rate tranches.

Also on Wednesday, Japan Bank for International Cooperation offered $2.5 billion of guaranteed bonds in line with guidance.

American Tower Corp. priced an issue of secured revenue notes, while Health Care REIT Inc. sold its new $750 million 10-year offering at tight end of talk.

McGraw Hill Financial, Inc. attracted more than $2.6 billion of orders for its upsized $700 million new issue.

The session also hosted new offerings from Kommuninvest i Sverige AB, PNC Bank NA, Export Development Canada and DnB NOR Boligkreditt AS.

Investment-grade bonds traded mostly softer as traders digested the Federal Reserve’s April policy meeting minutes.

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 65 bps.

Goldman Sachs Group Inc.’s paper (Baa1/A-/A) widened in the secondary market.

Citigroup Inc.’s 3.3% senior notes due 2025 traded 8 bps weaker during the session.

Bank of America Corp.’s 4% notes due 2025 eased 6 bps in trading.

JPMorgan Chase & Co.’s 3.125% notes due 2025 were unchanged.

JBIC guaranteed bonds

Japan Bank for International Cooperation priced $2.5 billion of guaranteed bonds (A1/AA-) on Wednesday in tranches due 2020 and 2025, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company issued $1 billion of 1.75% notes due 2020 at 99.434 to yield 1.869%, or mid-swaps plus 19 basis points.

A $1.5 billion tranche of 2.5% notes due 2025 sold at 99.447 to yield 2.563%, or mid-swaps plus 28 bps.

Both tranches sold in line with guidance.

The notes are guaranteed by Japan.

Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for the bank’s financing operations.

The financial institution is based in Tokyo.

AmEx two-parter

Also on Wednesday, American Express Credit priced $2.15 billion of senior notes (A2/A-/A+) due 2020 in fixed- and floating-rate tranches, according to a market source and an FWP filed with the SEC.

The sale included $1.75 billion of 2.375% five-year notes at 99.902 to yield 2.396%, or Treasuries plus 85 bps.

A $400 million five-year floating-rate note priced at par to yield Libor plus 73 bps.

The bookrunners were BofA Merrill Lynch, Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co.

American Express is a New York-based financial services company.

DnB covered bonds

DnB NOR Boligkreditt priced $1.25 billion of 2% five-year covered bonds on Wednesday at a spread of 37 bps over mid-swaps, a market source said.

The spread was on top of talk.

The notes (Aaa/AAA/) priced under Rule 144A and Regulation S.

BofA Merrill Lynch, Barclays, HSBC Securities and RBC Capital Markets LLC were bookrunners.

The subsidiary of DnB NOR Bank ASA is based in Oslo.

EDC prices tight

The primary also saw Export Development Canada sell $1 billion of 1% notes (Aaa/AAA/) due 2018 at mid-swaps minus 10 bps, or Treasuries plus 12.9 bps, according to a market source and an FWP filing with the SEC.

Pricing was at 99.662 to yield 1.113%.

Guidance had been set in the mid-swaps minus 9 bps area.

CIBC World Markets Corp., Credit Suisse Securities, Goldman Sachs and RBC Capital Markets are the joint bookrunners.

The government-backed agency for exporters is based in Ottawa.

American Tower revenue notes

American Tower sold $875 million of secured revenue notes (Aaa//AAA) on Wednesday in tranches due 2020 and 2025, according to a market source.

There was $350 million of 2.35% five-year notes priced with a spread of Treasuries plus 80 bps.

The notes sold in line with talk set in the Treasuries plus 80 bps area, which had firmed from initial guidance set in the Treasuries plus 85 bps area.

A $525 million tranche of 3.482% 10-year notes sold at 125 bps over Treasuries.

The notes sold in line with the Treasuries plus 125 bps area guidance. Initial talk was set at Treasuries plus 120 bps to 125 bps.

Barclays, BofA Merrill Lynch, Citigroup Global Markets, Morgan Stanley & Co. LLC and RBC Capital Markets were the bookrunners for the Rule 144A and Regulation S deal.

The owner and operator of communications towers is based in Boston.

Health Care REIT prices tight

In other primary happenings, Health Care REIT priced $750 million of 4% 10-year senior notes (Baa2/BBB) on Wednesday at Treasuries plus 177 bps, according to a market source and an FWP filing with the SEC.

Pricing was at 99.926 to yield 4.009%.

The notes priced at the tight end of talk.

Citigroup Global Markets, UBS Securities LLC, Jefferies & Co. and JPMorgan are the bookrunners.

Proceeds will be used to repay debt under an unsecured credit facility and for general corporate purposes.

The real estate investment trust for outpatient health-care services properties is based in Nashville.

McGraw Hill upsizes

McGraw Hill Financial was in Wednesday’s market with an upsized $700 million issue of 4% senior notes (//BBB+) due 2025 at Treasuries plus 185 bps, according to an informed source.

The notes sold at 99.254 to yield 4.091%.

Pricing was at the tight end of talk set in the Treasuries plus 190 bps area, which had firmed from initial guidance in the low-200 bps area over Treasuries.

BofA Merrill Lynch, Goldman Sachs, JPMorgan and Mizuho Securities were the bookrunners for the Rule 144A and Regulation S with registrations rights deal.

The notes are guaranteed by McGraw Hill Financial's subsidiary Standard & Poor's Financial Services LLC.

Proceeds from the sale will be used for general corporate purposes.

New York-based McGraw Hill Financial provides information to the capital, commodities and commercial markets.

Kommuninvest upsizes

Kommuninvest i Sverige AB sold an upsized $500 million of four-year floating-rate notes (Aaa/AAA/AAA) at Libor plus 3 bps, an informed source said.

The notes sold in line with price talk.

Citigroup Global Markets, Goldman Sachs and RBS Securities Inc. are the bookrunners for the Rule 144A and Regulation S deal.

Kommuninvest offers funding to municipalities of Sweden and is based in Orebro.

PNC Bank floaters

PNC Bank priced $200 million floating-rate note (A2/A/A+) due May 27, 2021 at par to yield Libor plus 65 bps on Wednesday, an informed source said.

The bookrunner was JPMorgan.

The subsidiary of PNC Financial Services Group is based in Pittsburgh.

Goldman weak

Goldman Sachs’ 3.5% notes due 2025 traded 8 bps weaker at 145 bps bid on Wednesday, a market source said.

Goldman sold $800 million of the notes at a spread of Treasuries plus 145 bps in a March 25 reopening.

The issue originally priced in a $1.7 billion offering on Jan. 20 at Treasuries plus 170 bps.

The financial services company is based in New York City.

Citigroup widens

Citigroup’s 3.3% senior notes due 2025 eased 8 bps during the session to 138 bps bid, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Bank of America softer

Bank of America’s 4% notes due 2025 were quoted 6 bps weaker on Wednesday at 193 bps bid, according to a market source.

Bank of America sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 16 at Treasuries plus 225 bps.

The financial services company is based in Charlotte, N.C.

JPMorgan unchanged

JPMorgan Chase’s 3.125% notes due 2025 traded flat on the day at 125 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at 145 bps plus Treasuries.

The financial services company is based in New York City.

Bank/brokerage CDS costs flat

Investment-grade bank and brokerage CDS prices were again flat on Wednesday, according to a market source.

Bank of America’s CDS costs were unchanged at 65 bps bid, 68 bps offered. Citigroup’s CDS costs were also unchanged at 74 bps bid, 77 bps offered. JPMorgan Chase’s CDS costs remained at 63 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs were flat at 44 bps bid, 47 bps offered.

Merrill Lynch’s CDS costs were unchanged at 68 bps bid, 72 bps offered. Morgan Stanley’s CDS costs were also flat at 79 bps bid, 82 bps offered. Goldman Sachs Group’s CDS costs were unchanged at 83 bps bid, 86 bps offered.

Stephanie N. Rotondo contributed to this review.

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