U.S. Bancorp, TD Ameritrade, Telefonica price notes; credit spreads tighten; AT&T, MUFG firm

By Cristal Cody

Tupelo, Miss., April 24 – High-grade issuers priced about $2.6 billion of corporate bonds over Monday’s session in a light start to the week.

U.S. Bancorp came with a $1.3 billion offering of 10-year medium-term senior notes.

TD Ameritrade Holding Corp. tapped the primary market with $800 million of 10-year senior notes.

Also, Telefonica Emisiones SAU priced a $500 million add-on to its 5.213% 30-year senior notes.

“Quiet today,” a market source said.

Deal volume is expected to stay light over the week with about $15 billion to $20 billion of supply forecast by syndicate sources.

Looking to Tuesday’s supply, the European Bank for Reconstruction and Development plans to offer three-year notes.

The Markit CDX North American Investment Grade index tightened nearly 3 basis points to close Monday at a spread of 64 bps.

In the secondary market, AT&T Inc.’s 4.25% notes due 2027 firmed 2 bps.

Verizon Communications Inc.’s 4.125% notes due 2027 traded about 1 bp better.

Bank and financial paper was mixed.

Mitsubishi UFJ Financial Group, Inc.’s 3.677% senior notes due Feb. 22, 2027 improved about 2 bps.

Citigroup, Inc.’s 4.75% subordinated notes due May 18, 2046 were unchanged on the day.

U.S. Bancorp prices

U.S. Bancorp priced $1.3 billion of 3.15% 10-year medium-term senior notes on Monday at a spread of 87.5 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The series X notes (A1/A+/AA) priced at 99.94 to yield 3.157%.

U.S. Bancorp Investments, Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners.

Minneapolis-based U.S. Bancorp is a holding company and the parent of U.S. Bank NA.

TD Ameritrade too

TD Ameritrade Holding sold $800 million of 3.3% 10-year senior notes on Monday at a spread of 105 bps over Treasuries, on the tight side of talk in the Treasuries plus 110 bps area, plus or minus 5 bps, according to a market source and an FWP filing with the SEC.

The notes (A3/A/) priced at 99.792 to yield 3.325%.

Barclays, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, TD Securities (USA) LLC and U.S. Bancorp were the bookrunners.

The notes have a special mandatory redemption at 101 if TD Ameritrade’s acquisition of online brokerage firm Scottrade Financial Services, Inc. does not close by April 24, 2018.

Proceeds from the offering will be used for general corporate purposes, including to finance the cash portion to acquire Scottrade.

TD Ameritrade is an Omaha, Neb.-based securities brokerage firm.

Telefonica brings add-on

Telefonica Emisiones priced a $500 million add-on to its 5.213% 30-year senior notes (Baa3/BBB/BBB) on Monday at a spread of 208 bps over Treasuries, according to an FWP filing with the SEC.

The notes priced at 103.026 to yield 5.016%.

Citigroup Global Markets Inc. was the underwriter.

Telefonica originally sold $2 billion of the 30-year notes on March 1 at par to yield a Treasuries plus 215 bps spread. The total amount priced now is $2.5 billion.

The notes are guaranteed by Telefonica SA.

Proceeds will be deposited with Telefonica to be used for general corporate purposes.

The telecommunications group is based in Madrid.

European Bank eyes deal

The European Bank for Reconstruction and Development (Aaa/AAA/AAA) plans to price a benchmark-sized offering on Tuesday of three-year medium-term global notes, according to a market source.

The notes are due May 5, 5020.

BofA Merrill Lynch, BNP Paribas Securities Corp., JPMorgan and TD Securities (USA) are the lead managers.

The financial institution is based in London.

AT&T tightens

AT&T’s 4.25% notes due 2027 traded 2 bps better on Monday to head out at 170 bps bid, according to a market source.

The company priced $2 billion of the notes (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon improves

Verizon Communications’ 4.125% notes due 2027 tightened about 1 bp to 156 bps bid in secondary trading, a market source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

Citigroup stable

Citigroup’s 4.75% subordinated notes due 2046 (Baa3/BBB/A-) were unchanged in the secondary market on Monday at 186 bps bid, a source said.

The company sold $1 billion of the notes at a spread of Treasuries plus 225 bps on May 11, 2016 and a $750 million add-on at a spread of 173 bps over Treasuries on Feb. 7.

The financial services company is based in New York.

MUFG firms

MUFG’s 3.677% notes due Feb. 22, 2027 tightened about 2 bps during the session to 107 bps bid, a market source said.

The $1 billion tranche of 10-year notes (A1/A/A) priced on Feb. 15 at a Treasuries plus 118 bps spread.

The bank is based in Tokyo.

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