Nederlandse Waterschapsbank prices floaters; Deutsche, Goldman paper firms; spreads tighten

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 7 - A single issue from Nederlandse Waterschapsbank NV on Friday capped off a busier-than-expected week for the high-grade bond market.

Roughly $16 billion of paper was priced during the week, topping predictions of around $10 to $15 billion of supply.

In primary action on Friday, Nederlandse Waterschapsbank came to market with a $350 million issue of four-year floating-rate notes with a coupon of Libor plus 23 basis points following the deal's announcement on Thursday.

Pricing on the Rule 144A and Regulation S notes was at par.

Friday also saw the release of a weaker-than-expected jobs report.

The United States added 113,000 jobs in January, compared to predictions of 180,000. The unemployment rate fell to 6.6% from 6.7%.

Looking to the week ahead, sources are predicting a busier week for the high-grade primary market.

"[The primary] should see somewhat of a pick-up in issuance next week," a source said, adding that he is expecting around $20 billion to $25 billion of supply.

Bonds headed out mostly better on Friday, though Affiliated Managers Group Inc.'s 4.25% senior notes due 2024 retreated from earlier gains in secondary trading, according to market sources.

"I.G. looks to be a bit tighter, a couple basis points," a trader said.

The Markit CDX North American Investment Grade series 21 index tightened 2 bps to a spread of 68 bps over the day.

In the secondary market, Affiliated Managers Group's 4.25% senior notes due 2024 eased 3 bps from where the notes traded on Thursday, a source said.

Financial paper tightened with Deutsche Bank AG, London Branch's 2.5% senior notes due 2019 2 bps better in trading, a trader said.

The Goldman Sachs Group, Inc.'s 3.55% senior notes due 2021 priced in Canada on Wednesday tightened after the market showed a strong appetite for the maple bond deal, a source said.

Maple bonds, issues priced in Canada by foreign issuers, were "one of the better performers in the market last year," the source said.

Nederlandse Waterschapsbank floaters

Nederlandse Waterschapsbank priced $350 million of four-year floating-rate notes (Aaa/AA+/) at par to yield Libor plus 23 bps, according to a market source.

The notes sold in line with talk.

HSBC Securities and RBS Securities Inc. were the joint bookrunners for the Rule 144A and Regulation S deal.

The issuer provides loans to municipalities and other public programs and is based in the Hague.

Affiliated Managers eases

Affiliated Managers' 4.25% notes due Feb. 15, 2024 eased to 155 bps offered on Friday, a trader said.

The 10-year notes (/BBB/BBB) traded late Thursday afternoon at 152 bps offered after the company priced the paper earlier in the day.

Affiliated Managers sold $400 million of the notes at Treasuries plus 165 bps.

The asset management company is based in Prides Crossing, Mass.

Deutsche Bank tightens

In other trading, Deutsche Bank's 2.5% notes due Feb. 13, 2019 tightened to 94 bps bid, 93 bps offered, a trader said on Friday.

The notes (A2/A/A+) traded on Thursday at 96 bps bid, 93 bps offered.

Deutsche Bank sold $1 billion of the notes at a spread of Treasuries plus 100 bps on Thursday as part of a $3.5 billion three-part offering.

The financial services company is based in Frankfurt.

Goldman Sachs firms

Goldman Sachs' 3.55% senior notes due Feb. 12, 2021 traded early Friday at 171 bps bid, 168 bps offered, a source said.

Goldman Sachs (Baa1/A-/DBRS: A) sold C$600 million of the seven-year notes at a spread of 173 bps over the Government of Canada benchmark on Wednesday.

The financial services company is based in New York City.

Bank/brokerage CDS costs lower

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

Bank of America Corp.'s CDS costs firmed 2 bps to 79 bps bid, 83 bps offered. Citigroup Inc.'s CDS costs tightened 2 bps to 82 bps bid, 86 bps offered. JPMorgan Chase & Co.'s CDS costs fell 3 bps to 65 bps bid, 69 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 40 bps bid, 44 bps offered.

Merrill Lynch's CDS costs declined 2 bps to 83 bps bid, 88 bps offered. Morgan Stanley's CDS costs tightened 1 bp to 93 bps bid, 96 bps offered. Goldman Sachs Group's CDS firmed 2 bps to 97 bps bid, 101 bps offered.

Paul Deckelman contributed to this review.

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