Standard Chartered prices; high-grade supply thin; inflows improve; Tyson firms; RBS flat

By Cristal Cody

Tupelo, Miss., Sept. 27 – Investment-grade supply thinned on Thursday after the Federal Reserve raised rates in the previous session and focus turned to political events.

Standard Chartered plc brought $2 billion of senior notes in two tranches to the primary market.

In addition, Prospect Capital Corp. priced $100 million of notes on Thursday.

Investment-grade issuers stayed out of the primary market on Wednesday as the Federal Reserve raised rates by 25 basis points.

Week to date, high-grade issuers have priced more than $11 billion of bonds.

As little as $15 billion to up to about $25 billion of issuance was expected by market sources for the week.

For the week ended Sept. 26, Lipper US Fund Flows reported inflows of $1.78 billion for corporate investment-grade funds, up from inflows of $1.02 billion in the previous week.

In the secondary market, Tyson Foods, Inc.’s senior notes (Baa2/BBB/BBB) priced on Tuesday remain stronger than issuance with the 30-year bonds seen 4 bps better on the day and nearly 10 bps tighter than issuance.

Royal Bank of Scotland Group plc’s $1.75 billion of 5.076% fixed-to-floating-rate senior notes due Jan. 27, 2030 were wrapped around issuance on Thursday.

The Markit CDX North American Investment Grade 31 index closed about 2 bps tighter at a spread of 59 bps.

Standard Chartered sells $2 billion

Standard Chartered priced $2 billion of senior notes (A2/BBB+/A) in two parts on Thursday, according to a market source.

A $1.4 billion tranche of floating-rate notes due Jan. 4, 2023 priced at Libor plus 115 bps, on the tight side of guidance in the Libor plus 120 bps area, plus or minus 5 bps.

Standard Chartered sold $600 million of 4.247% fixed-to-floating-rate notes due Jan. 4, 2023 at a spread of Treasuries plus 135 bps. Price guidance on the notes was in the Treasuries plus 140 bps area, plus or minus 5 bps.

The notes will convert to a floating rate of Libor plus 115 bps after the initial fixed-rate period.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Standard Chartered Bank were the lead managers.

Standard Chartered is a London-based banking and financial services company.

Prospect Capital prices

Prospect Capital priced $100 million of 6.375% notes due Jan. 15, 2024 (/BBB-//Kroll: BBB/Egan-Jones: BBB) on Thursday at 99.685 to yield 6.449%, or a spread of Treasuries plus 350 bps, according to a 497AD filing with the Securities and Exchange Commission.

RBC Capital Markets and Goldman Sachs & Co. LLC were the bookrunners.

The asset management company is based in New York.

Tyson Foods tightens

Tyson Foods’ 5.1% notes due Sept. 28, 2048 firmed 4 bps over the session to 181 bps bid in secondary trading, a market source said.

Tyson sold $500 million of the 30-year notes on Tuesday at a Treasuries plus 190 bps spread.

The meat and food production company is based in Springdale, Ark.

RBS notes steady

Royal Bank of Scotland Group’s 5.076% fixed-to-floating-rate senior notes due Jan. 27, 2030 were quoted wrapped around issuance on Thursday at 200 bps bid, according to a market source.

The bank sold $1.75 billion of the notes (Baa2/BBB-/BBB+) on Monday at par to yield a Treasuries plus 200 bps spread.

The coupon will convert to a floating rate of Libor plus 190.5 bps on the Jan. 27, 2029 optional redemption date.

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

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