BNP, National Australia Bank sell as Yankee bonds take over; Woolworths, RCI Banque firm

By Andrea Heisinger and Cristal Cody

New York, April 6 - The high-grade bond market managed two more deals on Wednesday, with deals from BNP Paribas SA and National Australia Bank Ltd. following two previous days of sales coming mostly from Yankee and sovereign names.

BNP Paribas reopened its 5% notes due 2021 to add $1 billion. That brings the total amount outstanding to $3 billion including $2 billion that was sold in January.

There was a late sale in two parts totaling $2.2 billion from National Australia Bank. The deal was split into a $1.6 billion tranche of three-year floating-rate notes and $600 million of three-year fixed-rate notes.

A source said they both sold at the tight end of talk.

One syndicate source said the fears about inflation could have factored into the quiet primary. It's also likely that earnings season is taking its toll and most of the issuers already got sales out of the way earlier in the week.

"It wasn't terrible, but look at what we had - it was all from overseas," he said. "Corporates are about done [for the week]."

Trading was quiet in the secondary markets, traders said.

Overall investment-grade trading volume on Trace was flat from the day before on Wednesday at about $15.7 billion, a market source said.

Two offerings from Woolworths Ltd. and RCI Banque SA sold the previous day were seen active and tighter in trading, sources said.

Overall high-grade bond spreads were flat to slightly firmer, sources said. The Markit CDX Series 14 North American investment-grade index ended 1 bp tighter at a spread of 93 bps, according to Markit Group Ltd.

Government bonds dropped sending yields up 6 bps to 9 bps on the longer end of the curve in response to growing inflation concerns. The 10-year note yield rose 6 bps to 3.54%, while the 30-year bond yield rose sharply to 4.59% from 4.5%.

"Market participants seem to continue to be worried about inflation and the Fed's lack of response to it," said Mary Ann Hurley, a fixed income trader for D.A. Davidson & Co.

BNP Paribas reopens notes

BNP Paribas reopened its issue of 5% notes due 2021 to add $1 billion, a market source said late in the day.

The notes (Aa2/AA) were priced at a spread of Treasuries plus 145 bps. They sold in line with guidance in the 145 bps area.

Total issuance is $3 billion including $2 billion priced on Jan. 12 at 175 bps over Treasuries.

The bookrunner was BNP Paribas Securities Corp.

Proceeds are being used for general corporate purposes.

The financial services company is based in Paris.

NAB prices $2.2 billion

National Australia Bank sold $2.2 billion of notes (Aa1/AA) in two tranches under Rule 144A, an informed source said.

The $1.6 billion of three-year floating-rate notes priced at par to yield three-month Libor plus 72 bps.

A second tranche was $600 million of three-year notes priced at a spread of Treasuries plus 98 bps.

Full terms were not available at press time due to the lateness of pricing.

Bookrunners were Goldman Sachs & Co., HSBC Securities Inc., RBC Capital Markets Corp. and National Australia Bank.

Proceeds are going toward general corporate purposes.

The bank and financial services company is based in Melbourne, Australia.

New Woolworths firms

Woolworths' two tranches of $850 million of notes (A3/A-) sold the previous day firmed in the secondary market, traders said Wednesday.

Woolworths Ltd.'s 3.15% notes due 2016, which priced at Treasuries plus 90 bps on Tuesday, traded at 83 bps, a trader said Wednesday afternoon.

Another trader saw the notes at 85 bps bid, 83 bps offered.

The second tranche of 4.55% notes due 2021, which priced at 110 bps over Treasuries, firmed to 99 bps, a trader said.

Late afternoon, another trader saw the 10-year notes at 105 bps bid, 102 bps offered.

The food retailer is based in Bella Vista, Australia.

RCI tightens

The fixed-rate notes (Baa2/BBB) that RCI Banque sold on Tuesday also were stronger, traders said.

The 3.4% notes due 2014 firmed to 205 bps bid, 200 bps offered from the sale price of Treasuries plus 215 bps, a trader said.

A trader on another desk saw the notes firmer at 202 bps bid, 190 bps offered.

The second tranche of 4.6% notes due 2016, which priced at a spread if Treasuries plus 235 bps, tightened to 227 bps bid, 222 bps offered. The notes also were quoted slightly wider late in the day 229 bps bid, 222 bps offered.

The financial arm of automaker Renault is based in Cedex, France.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.