Wells Fargo brings its second deal in a week; NAB, Credit Suisse price; bank paper tightens

By Andrea Heisinger and Cristal Cody

New York, March 1 - Financial names dominated new issues in the investment-grade market on Thursday as Wells Fargo & Co., National Australia Bank Ltd., Credit Suisse Group AG and Paccar Financial Corp. priced deals.

Wells Fargo was in the market only a week ago with a $1.25 billion sale of five-year floating-rate notes. In its offering on Thursday, it followed that deal up by pricing $2.5 billion of 10-year senior holding company notes.

They were joined by National Australia Bank, which sold $2.5 billion of bonds in three- and five-year maturities.

Credit Suisse priced $2 billion of three-year covered bonds under Rule 144A and Regulation S. The bonds were sold wider than guidance.

Paccar Financial priced $500 million of five-year medium-term notes.

Meanwhile, both Health Care REIT Inc. and Raymond James Financial Inc. gave terms for deals that were priced the previous day.

A source in the preferred stock market called the deals "en fuego," noting that the phrase is not actually proper Spanish.

"Those were two pretty well underwritten deals," he added. Both issues were already performing well as of the previous session's close and only gained strength come Thursday.

Financials came to the market on the heels of several issues from corporates earlier in the week, also taking advantage of record-low borrowings rates.

"We weren't expecting to see Wells [Fargo] again," a syndicate source said. "I guess they needed financing."

National Australia Bank tapped the market for the second time in the past year. The financial last priced bonds in the U.S. market in a $2.6 billion deal in two parts on July 20, 2011. The 3% five-year notes from that trade were priced at 160 bps, which was a lower spread than the company got on Thursday's deal, but the coupon on that offering was higher.

The Markit CDX Series 17 North American Investment Grade index firmed 1 basis point to a spread of 93 bps.

Bank of America Corp.'s notes traded better along with other bank and financial paper in the secondary market, sources said.

Bonds that Bank of Montreal and Bank of Nova Scotia sold in January have tightened more than 50 bps to 80 bps in trading since issuance.

Investment-grade bank and brokerage credit default swaps costs continue to decline, a source said.

Bank of America's CDS' costs fell 10 bps to 245 bps bid, 225 bps offered. J.P. Morgan's CDS costs dropped 3 bps to 103 bps bid, 109 bps offered.

On the brokerage side, Merrill Lynch's CDS costs traded 10 bps lower to 275 bps bid, 285 bps offered. Goldman Sachs' CDS costs fell 15 bps to 220 bps bid, 230 bps offered. Morgan Stanley's CDS costs traded 15 bps down to 285 bps bid, 295 bps offered.

Treasuries traded lower over the day as fears about an imminent Greek debt default subsided. The benchmark Treasury note yield rose to 2.03% from 1.97%. The 30-year bond yield climbed 7 bps to 3.15%.

NAB sells two tranches

National Australia Bank priced $2.5 billion of notes (Aa2/AA-/) in two tranches, said a source close to the trade.

The $1.5 billion of 2% three-year paper priced at a spread of 160 bps over Treasuries.

A $1 billion tranche of 2.75% five-year notes sold at Treasuries plus 190 bps.

The bookrunners were Bank of America Merrill Lynch, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and National Australia Bank.

The deal is guaranteed by the bank's New York City branch.

The bank and financial services company is based in Melbourne.

Credit Suisse's $2 billion

Credit Suisse Group priced $2 billion of 1.625% three-year covered bonds in a deal done under Rule 144A and Regulation S, a market source said.

The notes (Aaa/AAA/) were priced at a spread of mid-swaps plus 105 bps. They priced wider than talk in the mid-swaps plus 100 bps area.

The bookrunners were Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC and Societe Generale.

The financial services company is based in Zurich.

Wells Fargo prices tight

Wells Fargo priced a $2.5 billion deal of 3.5% 10-year senior holding company notes (A2/A+/AA-) to yield 150 bps over Treasuries, an informed source said.

The deal sold at the tight end of guidance in the 150 bps to 155 bps range.

The bookrunner was Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes.

The financial services company is based in San Francisco.

Paccar sells five-year

Paccar Financial priced $500 million of 1.6% five-year medium-term notes (A1/A+/) at a spread of Treasuries plus 70 bps, a market source said.

Bank of America Merrill Lynch, Barclays Capital Inc. and Goldman Sachs & Co. were the bookrunners.

Proceeds are being used for general corporate purposes.

Paccar last sold bonds in a $400 million deal of three-year notes on Sept. 26.

The provider of retail and commercial truck financing for Paccar Inc. is based in Bellevue, Wash.

Health Care REIT's terms

Health Care REIT priced $287.5 million of 6.5% perpetual series J cumulative redeemable perpetual preferred stock, the company said in an FWP filing with the Securities and Exchange Commission late Wednesday.

Pricing came at the low end of talk. The preferreds are being sold at $25.00 each.

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities are the bookrunners.

Proceeds will be used to redeem all of the company's 7.875% series D cumulative redeemable preferred stock and 7.625% series F cumulative redeemable preferred stock. Remaining funds will be used for general corporate purposes.

The real estate investment trust is focused on senior housing and health-care facilities and is based in Toledo, Ohio.

Raymond James' $25-par deal

Raymond James Financial released additional details about its $350 million offering of 6.9% $25-par senior notes due 2042 in an FWP filing with the SEC.

The company announced the deal Wednesday, and a trader had speculated that about 8 million, or $200 million, of the notes were going to be issued, with pricing around 7%.

The St. Petersburg, Fla.-based financial services firm will apply to list the notes on the New York Stock Exchange.

JPMorgan, Citigroup Global Markets Inc. and Raymond James & Associates Inc. were the bookrunners.

Proceeds will be used to partially fund the company's acquisition of Morgan Keegan & Co. Inc. and MK Holding Inc.

Bank of America tightens

Bank of America's 7.625% notes due 2019 firmed 3 bps to 331 bps on Thursday, a source said.

The issue priced in May 2009 in a $2.5 billion offering at a spread of 410 bps over Treasuries.

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

BMO firms

Bank of Montreal's 2.5% notes due 2017 firmed 4 bps in trading to 114 bps over Treasuries on the day, a source said.

The notes priced on Jan. 6 in a $1.5 billion offering at a spread of 170 bps over Treasuries.

The financial services company is based in Toronto and Montreal.

Scotiabank tightens

Bank of Nova Scotia's 1.85% senior notes due 2015 firmed to 65 bps bid from 73 bps bid on Wednesday, a bond source said.

The notes priced in a $1 billion offering on Jan. 5 at a spread of 147 bps over Treasuries.

The Canadian bank is based in Halifax, N.S.

Stephanie N. Rotondo contributed to this review

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