Credit Agricole, Mizuho enter primary; FHLB pricing Thursday; spreads tighten; Verizon rallies

By Cristal Cody and Aleesia Forni

Virginia Beach, April 9 - Foreign banks Credit Agricole SA and Mizuho Bank Ltd. entered Wednesday's primary, pushing the week's total issuance past earlier expectations to more than $17 billion of supply.

Despite the lull in corporate activity due to earnings blackouts, issuers have surpassed earlier expectations of a $15 billion week.

Mizuho Bank sold $3 billion of senior notes in four parts on Wednesday in tranches due 2017, 2019 and 2024.

All tranches of the sale were sold at the tight end of talk, which had tightened around 10 basis points from earlier guidance.

Mizuho priced $500 million of three-year floaters at par to yield Libor plus 43 bps and $500 million of 1.3% notes due 2017 at Treasuries plus 55 bps.

A $1.5 billion tranche of 2.45% five-year notes sold with a spread of Treasuries plus 85 bps.

The bank also sold $500 million of 3.75% 10-year bonds at 108 bps over Treasuries.

Orders poured into Mizuho's bond, with the deal attracting an orderbook that was more than four times oversubscribed.

Meanwhile, Credit Agricole brought to market a $3 billion sale of senior notes in three parts during the day's session.

There was $500 million of five-year floaters priced at Libor plus 80 bps and $1.25 billion of five-year fixed-rate notes priced at 90 bps over Treasuries.

A $1.25 billion tranche of 10-year notes sold at Treasuries plus 130 bps.

Both fixed-rate tranches of the Rule 144A and Regulation S deal sold at the tight end of talk.

In other market action on Wednesday, Federal Home Loan Banks set price talk for a planned $3 billion offering of global bonds due 2017 at Treasuries plus 10.5 bps.

The deal is expected to price on Thursday.

The preferred market saw Public Storage sell a $50 million add-on to its 6.375% cumulative preferred stock during the session.

Metropolitan Life Global Funding I followed up its $3.75 billion senior notes offering in the U.S. market on Monday with a C$800 million offering of senior notes (Aa3/AA-/AA-) in Canada on Wednesday, according to an informed source.

"Very strong books," a source said. "It's the first for Met this year - they've been a consistent issuer in the market since 2008."

The funding arm of New York City-based insurance company Metropolitan Life Insurance Co. sold the maple bonds, which are Canadian dollar-denominated bonds issued domestically by foreign companies, in a private placement offering.

Investment-grade bond spreads tightened over the day on Wednesday, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 2 bps to a spread of 66 bps.

In the secondary market, Verizon Communications Inc.'s s 5.15% notes due 2023 rallied over the session, a source said.

Goldman Sachs Group Inc.'s new paper climbed modestly higher, a market source said.

Mizuho sells four-parter

Mizuho Bank sold $3 billion of senior notes (A1/A+/) in four tranches during Wednesday's session, according to a market source.

The sale included $500 million of floating-rate notes due 2017 at par to yield Libor plus 43 bps.

There was also $500 million of 1.3% three-year notes sold at Treasuries plus 55 bps, or 99.856, to yield 1.349%.

A third tranche was $1.5 billion of 2.45% five-year notes, which sold with a spread of Treasuries plus 85 bps.

Pricing was at 99.822 to yield 2.488%.

Finally, a $500 million tranche of 3.75% 10-year bonds sold at 99.755 to yield 3.781%.

The notes sold with a spread of Treasuries plus 108 bps.

All tranches of notes sold at the tight end of price talk.

BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC and Mizuho Securities were the joint bookrunners for the Rule 144A and Regulation S deal.

Mizuho Bank is the retail and corporate banking unit of Tokyo-based Mizuho Financial Group Inc.

Credit Agricole prices tight

Credit Agricole priced $3 billion of senior notes (A2/A/A) in three tranches on Wednesday, an informed source said.

A $500 million tranche of five-year floaters priced at Libor plus 80 bps, while $1.25 billion of five-year fixed-rate notes priced at 90 bps over Treasuries.

The sale also included $1.25 billion of 10-year notes, which sold with a spread of Treasuries plus 130 bps.

Both fixed-rate tranches priced at the tight end of talk.

The joint bookrunners for the Rule 144A and Regulation S deal were Morgan Stanley, RBC Capital Markets, Citigroup, BofA Merrill Lynch and Credit Agricole.

Full details of the sale were unavailable at press time.

The retail bank is based in Paris.

FHLB sets talk

Federal Home Loan Banks has set talk for its planned $3 billion offering of three-year global bonds at Treasuries plus 10.5 bps, according to market sources and a company news release.

The issue is expected to price on Thursday, and the bond will mature on May 24, 2017.

Citigroup Global Markets, Deutsche Bank Securities Inc. and Goldman Sachs are the lead managers.

Seven co-managers and a distribution group will complete the syndicate team.

FHLB is comprised of 12 government-sponsored funding providers.

Public Storage adds on

Public Storage priced a $50 million reopening of its 6.375% series Y cumulative preferred stock, according to an FWP filed with the Securities and Exchange Commission on Wednesday.

The Glendale, Calif.-based real estate investment trust originally sold $235 million of the preferreds in March. The securities were issued as $25 depositary shares representing a 1/1,000th interest in a preferred.

BofA Merrill Lynch, Jefferies LLC, Morgan Stanley, UBS Securities LLC and Wells Fargo Securities LLC were the joint bookrunning managers for the reopening.

The underwriters subscribed for 400,000 shares each.

The preferreds can be redeemed on or after March 17, 2019 at par plus accrued dividends.

Dividends are payable quarterly.

Proceeds will be used to repay a portion of a 1.0545% term loan with Wells Fargo Bank NA that comes due Dec. 2, 2014.

Verizon rallies

Verizon's 5.15% notes due 2023 climbed higher to 111.85 from 110.19 on Tuesday, according to a market source on Wednesday.

Verizon sold $11 billion of the notes (Baa1/BBB+/A-) at 99.676 to yield 5.192% in the record $49 billion eight-tranche offering brought on Sept. 11.

The telecommunications company is based in New York City.

Goldman rises

Goldman Sachs' 4% notes due 2024 rose to 100.27 in trading on Wednesday, better than where the notes headed out on Tuesday at 99.96.

Goldman Sachs sold $3 billion of the 10-year notes (Baa1/A-/A) on Feb. 26 at 99.698 to yield 4.037%.

The financial services company is based in New York City.

Bank/brokerage CDS decline

Investment-grade bank and brokerage CDS prices declined, according to a market source.

Bank of America Corp.'s CDS costs firmed 2 bps to 62 bps bid, 65 bps offered. Citigroup Inc.'s CDS costs tightened 2 bps to 72 bps bid, 75 bps offered. JPMorgan Chase & Co.'s CDS costs declined 1 bp to 56 bps bid, 59 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs declined 1 bp to 69 bps bid, 70 bps offered. Morgan Stanley's CDS costs tightened 2 bps to 79 bps bid, 83 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 3 bps to 86 bps bid, 89 bps offered.

Paul Deckelman contributed to this review.

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