Financials dominate primary; AIG, ANZ, Honda price; Citigroup, Bank of America stable

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 12 – Financial names dominated the primary market on Monday, with American International Group Inc., American Honda Finance Corp. and Australia and New Zealand Banking Group Ltd. among the names pricing new deals.

Nearly $6 billion of new issuance priced during the session, kicking off what is expected to be around a $30 billion week.

The session’s largest new issue was priced by American International Group, which sold a $2 billion offering of senior notes in 20- and 40-year tranches.

Both tranches sold around 15 basis points tight of the midpoint of initial guidance.

Also on Monday, Australia and New Zealand Banking Group priced $1.1 billion of three-year senior notes in fixed- and floating-rate tranches at the tight end of talk.

The session also saw American Honda Finance sell $750 million of one-year floating-rate notes in line with guidance.

Brookfield Asset Management Inc. and DDR Corp. were each in the market with upsized offerings of notes.

Meanwhile, Northeast Utilities priced $450 million of senior notes in two maturities on Monday, and Ecolab Inc. priced a $600 million offering.

KfW joined the forward calendar on Monday, setting price talk for a planned offering of three-year notes.

Investment-grade corporate bonds were mixed on Monday, while credit spreads softened, according to market sources.

AT&T Inc.’s 3.9% notes due 2024 tightened 4 bps in the secondary market.

Verizon Communications Inc.’s 4.15% senior notes due 2024 were flat.

Bank and financial paper was stable over the session, a source said.

Citigroup Inc.’s 3.75% notes due 2024 traded unchanged.

Bank of America Corp.’s 4% notes due 2024 were flat.

The Markit CDX North American Investment Grade series 23 index closed 2 bps wider at a spread of 71 bps.

AIG brings $2 billion

American International Group sold a $2 billion offering of senior notes (Baa1/A-/BBB+) in 20- and 40-year tranches on Monday, according to an informed source.

A $1.2 billion tranche of 3.875% notes due 2035 priced at 99.669 to yield 3.899%, or Treasuries plus 140 bps.

A second tranche was $800 million of 4.375% notes due 2055 sold with a spread of Treasuries plus 190 bps. Pricing was at 99.55 to yield 4.399%.

Proceeds will be used for general corporate purposes.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC are the bookrunners.

The insurance company is based in New York City.

ANZ three-years

Australia and New Zealand Banking Group priced $1.1 billion of three-year senior notes (Aa2/AA-/) in fixed- and floating-rate tranches on Monday, a market source said.

There was $500 million of floaters priced at par to yield Libor plus 44 bps.

A second tranche was $600 million of 1.5% notes priced with a spread of Treasuries plus 65 bps. Pricing was at 99.895 to yield 1.536%.

The notes sold at the tight end of talk.

The bookrunners were ANZ, Citigroup Global Markets, Goldman Sachs & Co. and RBC Capital Markets LLC.

The financial services company is based in Melbourne, Australia.

American Honda sells floaters

American Honda Finance priced $750 million of one-year floating-rate notes (A1/A+/) on Monday at par to yield Libor plus 2 bps, according to an FWP filed with the Securities and Exchange Commission.

The notes sold in line with guidance, which was set in the low-single digits area.

BofA Merrill Lynch, Citigroup Global Markets, Morgan Stanley and Wells Fargo Securities were the bookrunners.

Proceeds will be used for general corporate purposes.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Ecolab two-parter

Ecolab priced $600 million of senior notes (Baa1/BBB+/) in tranches due 2018 and 2020 on Monday, according to a market source.

There was $300 million of 1.55% three-year notes priced with a spread of Treasuries plus 68 bps.

The notes sold at the tight end of price talk.

There was also a $300 million tranche of 2.25% notes due 2020 priced at 88 bps over Treasuries.

Citigroup Global Markets, JPMorgan and MUFG are the bookrunners.

Proceeds will be used to repay commercial paper borrowings.

The cleaning and sanitizing company is based in St. Paul.

DDR upsizes

DDR priced an upsized $500 million of 3.625% 10-year senior notes (Baa2/BBB-/BBB-) with a spread of Treasuries plus 180 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.26 to yield 3.714%.

The notes sold at the tight end of price talk.

Deutsche Bank Securities, Jefferies, Wells Fargo Securities, BNY Mellon Capital Markets LLC, Goldman Sachs and RBS Securities Inc. were the bookrunners.

Proceeds will be used to repay debt under the company’s $350 million term loan and $750 million unsecured revolving credit facility and for general corporate purposes.

The real estate investment trust is based in Beachwood, Ohio.

Brookfield new issue

Brookfield Asset Management priced an upsized $500 million of 4% senior notes (Baa2/A-/BBB) due 2025 on Monday at Treasuries plus 208.6 bps, according to a market source and an FWP filed with the SEC.

Pricing was at par.

The notes sold at the tight end of guidance, which was set in the 212.5 bps area over Treasuries.

Citigroup Global Markets and Credit Suisse Securities (USA) LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Toronto-based Brookfield is a publicly owned asset management holding company.

Northeast Utilities two-parter

Northeast Utilities priced $450 million of senior notes (Baa1/BBB+/BBB+) in two maturities on Monday, according to a market source and two separate FWP filings with the SEC.

The offering included $150 million of 1.6% notes July 15, 2018 priced at 99.88 to yield 1.641%, or Treasuries plus 75 bps.

The notes were guided in the 90 bps area over Treasuries.

A second tranche was $300 million of 3.15% notes due Jan. 15, 2025 priced with a spread of Treasuries plus 125 bps.

The notes sold at 99.898 to yield 3.162%.

The notes were guided in the Treasuries plus 137.5 bps area.

Bookrunners were Barclays, BofA Merrill Lynch, RBS Securities, JPMorgan and MUFG.

Proceeds will be used to repay short-term debt.

The public utility holding company is based in West Springfield, Mass.

KfW sets talk

KfW (Aaa/AAA/) set price talk on Monday for a planned offering of three-year notes in the area of mid-swaps minus 4 bps, according to a market source.

The bookrunners are HSBC Securities, Nomura and TD Securities.

The German government-owned development bank is based in Frankfurt.

TD Bank eyes floaters

Toronto-Dominion Bank intends to price an offering of floating-rate senior medium-term notes, series A, due 2016, according to a supplement filed with the Securities and Exchange Commission.

TD Securities is the bookrunners.

Proceeds will be added to the company’s general funds and used for general corporate purposes.

The financial services and banking company is based in Toronto.

AT&T notes firm

AT&T’s 3.9% notes due 2024 (A3/A-/A) traded 4 bps tighter at 140 bps bid, a market source said.

AT&T sold $1 billion of the notes on March 5, 2014 at 125 bps plus Treasuries.

The telecommunications company is based in Dallas.

Verizon flat

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) were flat at 148 bps offered in the secondary market, a source said.

Verizon sold $1.25 billion of the notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

Citi paper unchanged

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) traded unchanged at 137 bps bid, two bps wider than where the paper was quoted on Thursday, according to a market source.

Citigroup sold $1.25 billion of the 10-year notes on June 9, 2014 at Treasuries plus 115 bps.

The bank is based in New York City.

Bank of America steady

Bank of America’s 4% notes due 2024 (Baa2/A-/A) traded unchanged at 137 bps bid, a market source said.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at 137 bps plus Treasuries.

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

Bank/brokerage CDS costs higher

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

Bank of America's CDS costs rose 1 bp to 67 bps bid, 71 bps offered. Citigroup's CDS costs increased 1 bp to 77 bps bid, 81 bps offered. JPMorgan Chase & Co.'s CDS costs were 1 bp higher at 66 bps bid, 70 bps offered. Wells Fargo & Co.'s CDS costs were 1 bp higher at 49 bps bid, 53 bps offered.

Merrill Lynch's CDS costs rose 1 bp to 71 bps bid, 75 bps offered. Morgan Stanley's CDS costs increased 1 bp to 85 bps bid, 89 bps offered. Goldman Sachs Group, Inc.'s CDS costs were 1 bp higher at 87 bps bid, 91 bps offered.

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