Bristol-Myers, Bank of Nova Scotia, Prologis price as strong tone continues; ABN Amro firms

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 24 - A positive tone to Thursday's market persuaded issuers including Bank of Nova Scotia, Prologis LP and Bristol-Myers Squibb Co. to bring new deals to the primary.

Following a mostly muted session on Wednesday, $3.5 billion of new bonds were priced on Thursday.

Bristol-Myers Squibb hit the market with a three-part $1.5 billion issue of senior notes, all pricing at the tight end of talk.

The company sold $500 million of 1.75% notes due 2019 at Treasuries plus 55 basis points and $500 million of 3.25% notes due 2023 at 87 bps over Treasuries.

A $500 million tranche of 4.5% notes due 2044 sold at Treasuries plus 92 bps.

Also on Thursday, Bank of Nova Scotia priced $1.5 billion of 2.05% notes due 2018 at Treasuries plus 77 bps.

The notes sold at the tight end of talk.

Prologis priced a $500 million issue of 3.35% senior notes with a spread of Treasuries plus 145 bps.

In other market news, Freddie Mac said during its regularly scheduled announcement Thursday it would forgo the sale of Reference Notes, according to a press release.

This week's new issuance has reached roughly $17.5 billion so far, in line with estimates of a $15 billion to $20 billion week.

In the preferred stock market, Citigroup Inc. announced a new deal, an offering of at least $500 million of series K fixed-to-floating-rate noncumulative perpetual preferreds.

Initial price talk was around 7%, but a trader said that was revised to 6.875%. The issue eventually priced at that level, coming in upsized at $1.3 billion.

"There was a lot of demand for it; it was very active," a trader said. However, he noted that "they didn't price it as good as they should have."

Investment-grade bonds ended the day mixed in trading, according to market sources.

The Markit CDX North American Investment Grade series 21 index closed unchanged at a spread of 72 bps.

New paper sold on Thursday from Bristol Myers traded mostly flat, while Prologis firmed on the offered side.

In other trading, ABN Amro Bank NV's 2.5% notes due 2018 tightened 7 bps over the day, according to a trader.

Bristol-Myers prices tight

Thursday's primary saw Bristol-Myers Squibb price $1.5 billion of senior notes (A2/A+/) in three parts, according to a market source.

All three tranches were sold at the tight end of talk.

There was $500 million of 1.75% notes due March 1, 2019 sold with a spread of Treasuries plus 55 bps, or 99.54, to yield 1.841%.

A $500 million tranche of 3.25% notes due 2023 was priced at 87 bps over Treasuries. Pricing was at 98.912 to yield 3.379%.

Finally, $500 million of 4.5% notes due 2044 sold with a spread of Treasuries plus 92 bps. The notes sold at 99.09 to yield 4.556%.

In the secondary market, Bristol Myers' 1.75% notes traded flat at 55 bps bid, 52 bps offered, according to a trader.

The tranche of 3.25% notes were wrapped around issuance on the bid side at 87 bps bid, 82 bps offered.

The long tranche of 4.5% notes tightened in late trading to 90 bps bid, 88 bps offered.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the joint bookrunners for all three tranches.

Barclays and Credit Suisse Securities (USA) LLC were also joint bookrunners for the 2019 notes.

BNP Paribas Securities Corp. was a joint bookrunner for the 3.25% notes, and RBS Securities Inc. was a joint bookrunner for the 4.5% notes.

The company intends to use the proceeds from the sale for general corporate purposes.

Bristol-Myers is a New York-based health-care company.

Scotiabank sells $1.5 billion

The Bank of Nova Scotia sold on Thursday a $1.5 billion issue of 2.05% senior notes due Oct. 30, 2018 with a spread of 77 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Pricing was at the tight end of talk. The notes were sold at 99.929 to yield 2.065%.

Barclays, Scotia Capital (USA) Inc., BofA Merrill Lynch, Citigroup Global Markets Inc., JPMorgan, Deutsche Bank Securities, Goldman Sachs & Co., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, RBS Securities and UBS Securities LLC were the underwriters.

Proceeds will be used for general business purposes.

The financial services company is based in Toronto.

Prologis new issue

Also on Thursday, Prologis sold $500 million of 3.35% senior notes (Baa2/BBB/BBB) due 2021 with a spread of Treasuries plus 145 bps, according to an FWP filed with the SEC.

Pricing was at 99.984 to yield 3.353%.

Prologis' 3.35% senior notes tightened on the offered side in secondary trading to 138 bps, a trader said.

Goldman Sachs, Deutsche Bank Securities, BofA Merrill Lynch, Morgan Stanley and JPMorgan were the joint bookrunners.

The company intends to use the proceeds from the sale to repay borrowings under its global line and to fund the cash purchase of senior notes that are tendered under purchase offers that commenced on Oct. 24.

The notes will be unconditionally guaranteed by Prologis Inc.

Denver-based Prologis is an owner, operator and developer of industrial real estate.

ABN tightens

ABN Amro Bank's 2.5% notes due 2018 tightened to 120 bps bid, 118 bps offered in secondary trading on Thursday afternoon, a trader said.

ABN Amro sold $1 billion of the notes (A2/A/A+) on Wednesday at a spread of Treasuries plus 127 bps.

The bank and financial services company is based in Amsterdam.

Bank/brokerage CDS costs mixed

Investment-grade bank and brokerage CDS prices were mixed on Thursday, according to a market source.

Bank of America Corp.'s CDS costs ended flat at 97 bps bid, 101 bps offered. Citigroup's CDS costs firmed 1 bp to 87 bps bid, 91 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 80 bps bid, 84 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 54 bps bid, 58 bps offered.

Merrill Lynch's CDS costs rose 1 bp to 91 bps bid, 101 bps offered. Morgan Stanley's CDS costs firmed 1 bp to 113 bps bid, 116 bps offered. Goldman Sachs Group, Inc.'s CDS costs eased 1 bp to 117 bps bid, 120 bps offered.

Paul Deckelman contributed to this review.

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