Export Development Canada, Fannie Mae price; bank paper firms; U.S. Bancorp tightens

By Cristal Cody

Eureka Springs, Ark., April 22 – Primary action slowed as expected on Friday in the high-grade bond market.

Export Development Canada sold $500 million of two-year floating-rate notes.

Fannie Mae tapped the market during the session with a $3.5 billion offering of 10-year Benchmark Notes with a spread of 34.5 basis points over Treasuries.

Commercial banks, government and other investors made up the largest percentages of investor types, Fannie Mae said.

Investment-grade volume is expected to stay light in the $15 billion to $20 billion range in the week ahead against the backdrop of the weekend Passover holiday and the Federal Reserve’s policy meeting on Tuesday and Wednesday, sources said.

In the secondary market, U.S. Bancorp’s new 3.1% subordinated medium-term notes due 2026 traded about 4 bps tighter on Friday.

Mitsubishi UFJ Financial Group, Inc.’s reopened notes were trading about 1 bp to 5 bps tighter than where the paper priced on Tuesday.

Goldman Sachs Group Inc.’s 2.625% notes due 2021 headed out about 1 bp better on the day.

Wells Fargo & Co.’s 3% senior notes due 2026 that were reopened over the week traded 3 bps better than issuance on Friday.

The Markit CDX North American Investment Grade index firmed 1 bp to close at a spread of 73 bps.

EDC sells floaters

Export Development Canada sold $500 million of two-year floating-rate notes at Libor plus 6 bps on Friday, according to a market source.

The notes (Aaa/AAA) are due April 29, 2018.

HSBC Securities (USA) Inc. was the bookrunner.

Export Development Canada is an Ottawa-based government-backed agency for exporters.

U.S. Bancorp tightens

In the secondary market, U.S. Bancorp’s 3.1% notes due 2026 (A1/A-/AA-) traded at 119 bps bid, 117 bps offered on Friday, a source said.

The company sold $1 billion of the notes on Thursday at a spread of Treasuries plus 123 bps.

U.S. Bancorp is a financial services holding company based in Minneapolis.

Mitsubishi firms

Mitsubishi’s 3.85% notes due 2026 were seen at 150 bps bid, 148 bps offered on Friday, according to a market source.

The bank priced $500 million in an add-on to the notes on Tuesday at Treasuries plus 155 bps.

The original $2.5 billion tranche priced on Feb. 23 at Treasuries plus 215 bps.

The bank is based in Tokyo.

Goldman Sachs stronger

Goldman Sachs Group’s 2.625% notes due 2021 tightened about 1 bp going out at 124 bps bid, 122 bps offered, a market source said.

The company sold $1.5 billion of the notes (A3/BBB+/A) on Wednesday at a spread of Treasuries plus 133 bps.

The financial services company is based in New York City.

Wells Fargo improves

Wells Fargo’s 3% notes due 2026 were quoted at 122 bps bid, 119 bps offered on Friday in secondary trading, a market source said.

The notes (A2/A/AA-) priced at a spread of 125 bps over Treasuries in a $500 million reopening on Wednesday.

Wells Fargo originally sold $3 billion of the notes on April 15 at Treasuries plus 130 bps.

San Francisco-based Wells Fargo provides retail, commercial and corporate banking services.

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