Royal Bank of Scotland, Sandy Spring price; high-grade supply surges ahead of Fed decision

By Cristal Cody

Tupelo, Miss., Oct. 29 – The investment-grade primary market saw a number of issuers offering bonds on Tuesday.

Royal Bank of Scotland Group plc priced $750 million of 10-year split-rated fixed-to-fixed-rate reset subordinated notes during the session.

Sandy Spring Bancorp sold $175 million of 10-year fixed-to-floating rate subordinated notes.

Also on Tuesday, DH Europe Finance II Sarl offered five tranches of senior notes.

State Street Corp. marketed fixed-to-floating rate senior notes due 2025 and fixed-to-floating rate senior subordinated notes due 2034.

DTE Energy Co. was on deck with two tranches of fixed-rate senior notes due 2022 and 2030.

PNC Financial Services Group, Inc. offered senior notes due 2024.

Ford Motor Credit Co. LLC marketed new fixed-rate notes.

In addition, JetBlue Airways Corp. offered $772,255,000 of pass-through certificates.

The busy deal pace follows a number of issuers that included Citigroup Inc. and Hershey Co. in the high-grade primary market on Monday.

About $15 billion to $20 billion of investment-grade supply is being eyed to hit the primary market this week, sources report.

Deal volume was forecast to be front-loaded ahead of the Federal Reserve’s monetary policy decision on Wednesday.

The Federal Reserve’s Federal Open Market Committee kicked off the two-day policy meeting on Tuesday. A rate cut of 25 basis points is widely forecast by market participants.

The Markit CDX North American Investment Grade 33 index closed the day at a spread of 54 bps.

RBS sells split-rated notes

Royal Bank of Scotland Group priced $750 million of 3.754% 10-year fixed-to-fixed-rate reset subordinated notes (Baa3/BB+/A-) in the offering on Tuesday at par to yield a spread of 210 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes will reset Nov. 1, 2024 to but excluding maturity to a rate equal to Treasuries plus 210 bps.

BofA Securities, Inc., Credit Suisse Securities (USA) LLC, NatWest Markets Securities Inc. and RBC Capital Markets, LLC were the bookrunners.

Royal Bank of Scotland Group is a banking and financial services company based in Edinburgh, Scotland.

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