Morgan Stanley prices to solid demand, tightens in aftermarket; Verizon mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 22 – Morgan Stanley, U.S. Bank NA and Jackson National Life Global Funding priced bonds on Thursday, as the European Central Bank announced that it would begin a bond-buying program in order to boost growth in the Eurozone economy.

The ECB said it will purchase €60 billion of assets per month through September 2016.

Morgan Stanley’s new $5.5 billion three-part issue outperformed on the heels of the announcement.

Demand for the bond was overwhelming. The new issue attracted an orderbook that was more than 2.5 times oversubscribed.

“That deal went over very well,” a market source said.

The fixed-rate tranches sold between 10 basis points to 15 bps tight of initial price thoughts.

U.S. Bank’s new deal was also well received by investors, with all three tranches pricing at the tight end of talk.

Jackson National Life Global Funding was also in the market, pricing $350 million of 18-month floating-rate notes.

The investment-grade bond market has hosted around $21.25 billion of new issuance this week, falling in line with what was expected to be around a $20 billion week.

Investment-grade corporate bonds and credit spreads firmed over the session, according to market sources.

Morgan Stanley’s new fixed-rate notes tightened 10 bps to 15 bps in aftermarket trading, a trader said.

The company’s existing paper traded mostly unchanged, according to a market source.

Verizon Communications Inc.’s bonds were mixed in the secondary market over the afternoon after the company reported a fourth-quarter earnings loss earlier in the day, a source said.

The Markit CDX North American Investment Grade index headed out 3 bps tighter at a spread of 68 bps.

Morgan Stanley offering

Morgan Stanley priced $5.5 billion of senior notes (Baa2/A-/A) in three tranches on Thursday, according to a market source and an FWP filed with the Securities and Exchange Commission.

There was $500 million of five-year floaters priced at par to yield Libor plus 114 bps.

The company also sold $2.5 billion of 2.65% five-year notes priced at 99.912 to yield 2.669%, or Treasuries plus 130 bps.

There was also $2.5 billion of 4.3% 30-year bonds priced with a spread of Treasuries plus 190 bps.

The notes sold at 99.25 to yield 4.345%.

Morgan Stanley & Co. LLC is the bookrunner.

Morgan Stanley’s notes due 2020 tightened to 120 bps bid, 116 bps offered, a trader said.

The notes due 2045 were seen stronger going out at 175 bps bid, 173 bps offered in the secondary market.

The financial services company is based in New York City.

U.S. Bank sells $2.25 billion

Also on Thursday, U.S. Bank sold $2.25 billion of senior bank notes (Aa3/AA-/AA-) in three tranches, a market source said.

The bank priced $450 million of three-year floaters at par to yield Libor plus 30 bps.

A second tranche was $800 million of 1.35% three-year notes sold at 99.848 to yield 1.402%, or Treasuries plus 50 bps.

The notes sold at the tight end of the Treasuries plus 55 bps area talk, which had firmed from initial guidance set in the high-50 bps area over Treasuries.

Finally, $1 billion of 2.8% 10-year notes sold at 99.663 to yield 2.839%, or Treasuries plus 95 bps.

The notes priced at the tight end of talk, which was set in the 100 bps area over Treasuries, having firmed from initial guidance set in the 110 bps area over Treasuries.

The bookrunners were Barclays, Morgan Stanley and U.S. Bancorp Investments Inc.

The financial services company is based in Minneapolis.

Jackson National floaters

Jackson National Life Global Funding priced $350 million of floating-rate notes due July 29, 2016 at par to yield Libor plus 25 bps, according to a market source.

The bookrunners were Barclays, UBS Securities LLC and U.S. Bancorp Investments.

The subsidiary of U.K. insurance company Prudential plc is based in Lansing, Mich.

Morgan Stanley steady

Morgan Stanley’s existing 3.875% notes due 2024 were unchanged on the day at 158 bps bid, according to a market source.

Morgan Stanley sold $3 billion of the notes on April 23, 2014 at a spread of Treasuries plus 130 bps.

The financial services company is based in New York City.

Verizon eases

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) were unchanged to 1 bp better at 162 bps bid, a source said.

The company 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.

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