Wells Fargo, Rockwell issue bonds; bank, financial paper mixed; spreads leak wider

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 11 – Wells Fargo & Co. and Rockwell Automation Inc. gave the investment-grade primary market its only action during the session on Wednesday.

Wells Fargo was in the market with a $2.5 billion 10-year notes offering priced at the tight end of talk.

Meanwhile, Rockwell Automation sold senior notes in five- and 10-year tranches.

At its peak, the book for Rockwell Automation’s new issue reached $6.8 billion of orders before closing at around $4.6 billion, and the deal priced around 30 basis points tight of initial guidance.

One source attributed part of the deal’s overwhelming demand to its scarcity factor, as this was the company’s first venture into the high-grade primary since November 2007.

In forward calendar news, the European Bank for Reconstruction and Development (EBRD) set price talk for a planned seven-year notes offer, and Apollo Investment Corp. tapped leads to arrange a series of investor meetings.

In total, the high-grade primary market has seen roughly $24.7 billion of new issuance this week.

“The market [is] very strong,” one market source said, adding that the quieter primary session was “just a lull today.”

Bank and financial paper was mixed over the day.

Citigroup Inc.’s 3.75% notes due 2024 firmed 5 bps in the secondary market.

JPMorgan Chase & Co.’s 3.625% notes due 2024 traded flat.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 were stable.

The Markit CDX North American Investment Grade index leaked 1 bp wider to a spread of 67 bps on Wednesday.

Wells Fargo prices tight

Wells Fargo sold $2.5 billion of 3% senior notes due 2025 at Treasuries plus 107 bps on Wednesday, an informed source said.

Pricing was at the tight end of talk.

The notes (A2/A+/AA-) priced at 99.666 to yield 3.039%.

Wells Fargo Securities LLC was the bookrunner.

The bank is based in San Francisco.

Rockwell two-parter

Rockwell Automation priced $600 million of senior notes (A3/A/A) in tranches due 2020 and 2025, according to an FWP filed with the Securities and Exchange Commission.

The sale included $300 million of 2.05% five-year notes priced with a spread of Treasuries plus 60 bps. Pricing was at 99.79 to yield 2.094%.

A second tranche was $300 million of 2.875% 10-year notes sold at 99.99 to yield 2.876%, or Treasuries plus 90 bps.

Both tranches sold at the tight end of talk.

BofA Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities LLC were the bookrunners.

Proceeds will be used to repay outstanding commercial paper and for general corporate purposes.

Rockwell Automation is a Milwaukee-based information solutions provider for the auto industry.

EBRD sets talk

The European Bank for Reconstruction and Development (EBRD) set price talk for a planned seven-year offering of notes (Aaa/AAA/AAA) in the mid-swaps plus 1 bps area, according to a market source.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and TD Securities are the bookrunners.

The lender to banks, businesses and industries is based in London.

Apollo sets investor meetings

Apollo Investment mandated Barclays and Citigroup Global Markets to arrange fixed-income investor meetings ahead of a possible capital markets transaction, subject to market conditions, according to a 497AD filed with the SEC.

The meetings will be held Feb. 17 through Feb. 19.

New York-based Apollo Investment is an externally managed, closed-end, non-diversified investment management company.

Freddie adds on

Freddie Mac priced a $500 million reopening of its existing 1% Reference Notes due July 28, 2017 via an internet-based auction on Wednesday, according to a company news release.

The add-on priced at 100.220897 to yield 0.909%.

The bid-to-cover ratio was 4.170 to 1.

The total offering size is now $4.5 billion.

The government-backed mortgage lender is based in McLean, Va.

Citi tightens

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) tightened 5 bps to 123 bps bid, a source said.

The issue priced in a $1.25 billion offering on June 9, 2014 at Treasuries plus 115 bps.

The bank is based in New York City.

JPMorgan flat

JPMorgan’s 3.625% senior notes due 2024 (A3/A/A+) headed out unchanged in the 121 bps area, a source said.

JPMorgan sold $2 billion of the notes on May 6, 2014 at a spread of Treasuries plus 110 bps.

The financial services company is based in New York City.

Goldman unchanged

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded flat at 135 bps bid, according to a market source.

Goldman Sachs sold $2.25 billion of the notes on June 30, 2014 at Treasuries plus 135 bps.

The financial services company is based in New York City.

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