Bank of America brings day’s lone deal; bank, financial paper mostly unchanged

By Aleesia Forni and Cristal Cody

Virginia Beach, July 27 – Bank of America Corp. was the lone issuer to brave volatile market conditions on Monday following an overnight drop in Chinese stocks.

The financial services company sold a $2.5 billion issue of 10-year senior notes around 8 basis points tight of initial price thoughts.

The day’s sole deal garnered an order book that was around 1.8 times oversubscribed.

Players were gearing up for another $25 billion to $30 billion week for the primary market following back-to-back $45 billion-plus weeks of supply, though the total may ultimately miss that estimate due to the current market backdrop.

Investment-grade bank and financial paper was mostly unchanged on the day, while credit spreads widened.

The Markit CDX North American Investment Grade index ended 2 bps wider at a spread of 74 bps.

Bank of America’s existing 4% notes due 2025 were flat in secondary trading.

Citigroup Inc.’s 3.3% senior notes due 2025 headed out unchanged.

Barclays Bank plc’s 2.875% notes due 2020 were flat in the secondary market.

JPMorgan Chase & Co.’s 3.125% notes due 2025 traded about 1 bp wider.

Bank of America new issue

Bank of America priced $2.5 billion of 3.875% 10-year senior notes (Baa1/A-/A) on Monday at Treasuries plus 167 bps, according to an informed source.

Pricing was at 99.819 to yield 3.897%.

The notes sold at the tight end of price guidance set in the area of Treasuries plus 170 bps, having firmed from initial talk in the area of Treasuries plus 175 bps.

BofA Merrill Lynch is the bookrunner.

Proceeds will be used for general corporate purposes.

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

BofA existing paper steady

Bank of America’s 4% notes due 2025 traded unchanged on Monday at 205 bps bid, according to a market source.

Bank of America sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 16 at Treasuries plus 225 bps.

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

Citigroup unchanged

Citigroup’s 3.3% senior notes due 2025 were flat at 155 bps bid in late afternoon trading, a source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Barclays flat

Barclays’ 2.875% notes due 2020 headed out unchanged in the secondary market at 141 bps bid, a market source said.

Barclays sold $1 billion of the notes (Baa3/BBB/A) on June 1 at Treasuries plus 142 bps.

The financial services company is based in London.

JPMorgan soft

JPMorgan Chase’s 3.125% notes due 2025 eased about 1 bp to 148 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at 145 bps over Treasuries.

The financial services company is based in New York City.

Bank/broker CDS costs higher

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

Bank of America’s CDS costs were up 1 bp to 70 bps bid, 74 bps offered. Citigroup’s CDS costs were 2 bps higher at 78 bps bid, 82 bps offered. JPMorgan Chase’s CDS costs rose 1 bp to 70 bps bid, 73 bps offered. Wells Fargo & Co.’s CDS costs were also 1 bp higher at 53 bps bid, 57 bps offered.

Merrill Lynch’s CDS costs increased 1 bp to 74 bps bid, 76 bps offered. Morgan Stanley’s CDS costs were 2 bps higher at 78 bps bid, 82 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 2 bps higher at 94 bps bid, 92 bps offered.

Paul Deckelman contributed to this review.

© 2015 Prospect News.
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