High-grade primary market quiet; Bank Nederlandse in deal pipeline; Citigroup, Walgreens flat

By Cristal Cody

Tupelo, Miss., July 5 – High-grade issuers stayed to the sidelines on Wednesday following the Independence Day holiday, but the deal pipeline is building, according to market sources.

Bank Nederlandse Gemeenten NV is marketing a Rule 144A and Regulation S three-year floating-rate note deal that is expected to price on Thursday.

New bank and financial paper is expected to price later in the month after banks including Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley report second quarter earnings, according to a market source.

In the secondary market, Citigroup, Inc.’s 4.75% subordinated notes due May 18, 2046 reopened earlier in the year were unchanged.

Walgreens Boots Alliance Inc.’s 3.45% notes due June 1, 2026 softened about 1 basis point on Wednesday. The notes are trading about 4 bps to 5 bps better since Walgreens announced in the previous week plans to purchase more than 2,100 Rite Aid Corp. stores instead of the entire company.

The three-month Libor yield closed at a new high since 2009 at 1.303%, a market source said.

The Markit CDX North American Investment Grade index softened about 1 bp to end at a spread of 61 bps.

BNG talks offering

Bank Nederlandse Gemeenten (Aaa/AAA/AA+) plans to price an offering of floating-rate notes due July 14, 2020 on Thursday, according to a market source.

The notes are talked in the Libor plus 10 bps area.

Barclays, Goldman Sachs & Co. and HSBC Securities (USA) Inc. are the lead managers.

The banking services company is based in The Hague, Netherlands.

Citigroup steady

Citigroup’s 4.75% subordinated notes due May 18, 2046 (Baa3/BBB/A-) were flat on Wednesday at 160 bps bid, according to a market source.

The notes were priced on Feb. 7 in a $750 million add-on at a spread of 173 bps over Treasuries.

Citigroup originally sold $1 billion of the notes on May 11, 2016 at a spread of Treasuries plus 225 bps.

The financial services company is based in New York.

Walgreens flat

Walgreens’ 3.45% notes due June 1, 2026 headed out unchanged at 118 bps bid, according to a market source.

The retailer sold $1.9 billion of the notes on May 26, 2016 at a spread of 165 bps over Treasuries. The

Walgreens Boots Alliance is a subsidiary of Deerfield, Ill.-based drugstore operator Walgreens Co.

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