High-grade supply thins; Medical Properties prices split-rated notes; Westpac Banking firms

By Cristal Cody

Tupelo, Miss., July 17 – The investment-grade primary market stayed mostly quiet over Wednesday's session.

The only reported offering was a split-rated deal from Medical Properties Trust.

The company, issuing via MPT Operating Partnership, LP and MPT Finance Corp., priced $900 million of 10-year senior notes (existing ratings Ba1/BBB-) following a mid-morning conference call with investors, according to a market source.

The deal was upsized from $750 million.

In other activity, the International Bank for Reconstruction and Development announced plans to price a Canadian dollar-denominated benchmark-sized offering of five-year notes.

In the U.S. dollar-denominated market, participants were focused on the heavy round of second quarter earnings reports being released this week.

On Wednesday, companies including Abbott Laboratories, Bank of America Corp., Bank of New York Mellon Corp., eBay Inc., International Business Machines Corp. and U.S. Bancorp released earnings results.

Possible bank and financial issuance is anticipated by market sources following the release of earnings reports this week also from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. on Tuesday and Citigroup Inc. on Monday. Morgan Stanley will report its earnings on Thursday.

Week to date, high-grade corporate issuers have priced more than $7 billion of bonds.

Deal volume slowed on Tuesday with just one registered corporate issuer in the primary market.

Westpac Banking Corp. priced $2.25 billion of subordinated notes in two tranches after holding fixed income investor calls on Monday.

In addition, the Inter-American Development Bank priced an upsized $2.5 billion two-part offering of global notes.

High-grade issuers sold more than $5 billion of securities on Monday.

About $25 billion to $30 billion of supply was forecast by market sources for the week.

The Markit CDX North American Investment Grade 32 index closed the day flat at a spread of 54 basis points.

In the secondary market, Westpac Banking’s notes tightened 6 bps to 9 bps.

World Bank eyes Canada market

International Bank for Reconstruction and Development (Aaa/AAA/) plans to price a Canadian dollar-denominated benchmark-sized offering of five-year notes, according to a release on Wednesday.

The sustainable development bonds are due in July 2024.

TD Securities Inc., BMO Capital Markets Corp. and RBC Dominion Securities Inc. are the stabilization managers of the U.S. Securities and Exchange-exempt offering.

The stabilization period started Wednesday and ends Aug. 25, 30 days after the proposed issue date of the notes.

World Bank is a global development financing cooperative based in Washington, D.C.

Westpac Banking firms

Westpac Banking’s notes tightened 6 bps to 9 bps in the secondary market, a source said.

The company’s $1.25 billion of 4.11% notes due July 24, 2034, priced Tuesday at a spread of 200 bps over Treasuries, firmed 6 bps.

Westpac Banking’s $1 billion of 4.421% notes due July 24, 2039 tightened 9 bps in secondary trading.

The tranche priced Tuesday at a spread of Treasuries plus 180 bps.

The bank is based in Sydney, Australia.

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