Financials storm investment-grade primary; MetLife notes flat; Pfizer, AstraZeneca firm

By Aleesia Forni and Cristal Cody

New York, Jan. 12 – Another deluge of deals entered Tuesday’s investment-grade bond market, led by a host of financial names, including Bank of Nova Scotia, Macquarie Bank Ltd., Standard Chartered plc, Credit Agricole SA and Oesterreichische Kontrollbank AG.

Roughly $8.3 billion of new investment-grade issuance hit the primary during the session, pushing the week’s total to more than $12.9 billion.

Issuers tapped the market in light of a more positive market backdrop, with stocks rallying and credit spreads tightening.

Macquarie Bank brought the largest deal to market on Tuesday, selling $2.5 billion in three parts, all at the tightest side of initial price thoughts, while Bank of Nova Scotia saw around $2.5 billion of orders for its two-part sale.

Also on Tuesday, Virginia Electric & Power Co. and American Airlines, Inc. were each in the market with upsized new issues.

American Airlines increased the size of each tranche of its three-part offering of pass-through certificates.

Macquarie Bank four-parter

Macquarie Bank priced $2.5 billion of senior notes (A2/A/A) in four tranches on Tuesday, according to a market source, in a deal that attracted an order book that was more than two times oversubscribed.

The bank offered $600 million of 2.35% three-year notes sold at 99.988 to yield 2.354%, or Treasuries plus 120 bps.

A $400 million tranche of three-year floaters sold at par to yield Libor plus 118 bps.

And $800 million of 2.85% five-year notes sold at 99.838 to yield 2.885% with a spread of Treasuries plus 135 bps.

Finally, $700 million of 3.9% 10-year notes sold at par, or Treasuries plus 180 bps.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Macquarie and Wells Fargo Securities LLC are the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

The banking unit of Macquarie Group Ltd. is based in Sydney, Australia.

Bank of Nova Scotia prices

Also on Tuesday, Bank of Nova Scotia priced $1.5 billion of three-year senior notes (Aa2/A+/AA-) in fixed- and floating-rate tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

The bank sold $1 billion of 1.95% three-year notes at 99.881 to yield 1.991%, or Treasuries plus 85 bps.

The notes sold at the tight end of guidance, which was set in the range of Treasuries plus 85 bps to 87 bps.

Also, $500 million of three-year floaters priced at par to yield Libor plus 83 bps. Guidance was at the Libor equivalent to the fixed-rate tranche.

Bookrunners were BofA Merrill Lynch, Barclays, Citigroup, JPMorgan, Scotia Capital (USA) Inc., Goldman Sachs & Co., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo.

Proceeds will be used for general corporate purposes.

The financial services company is based in Toronto.

American Airlines prices

The primary also hosted an upsized deal from American Airlines.

The Fort Worth, Texas-based commercial airline priced a $1,074,350,000 offering of class AA, class A and class B pass-through certificates, series 2016-1, according to an informed source and an FWP filed with the SEC.

The offering was upsized from $822,953,000.

Included in the three-part sale was $584,374,000 of 3.575% class AA certificates (Aa3/AA) priced at par with a spread of Treasuries plus 146.7 basis points and a final expected distribution date of Jan. 15, 2028.

Also, $262,218,000 of 4.1% class A certificates (A2/A) sold at par, or Treasuries plus 199.2 bps. The issue has a final expected distribution date of Jan. 15, 2028.

And $227,758,000 of 5.25% class B certificates (Baa3/BBB) priced at par with a 370.5 bps spread over Treasuries and a final expected distribution date of Jan. 15, 2024.

Goldman Sachs and Citigroup are the structuring agents and lead bookrunners.

Morgan Stanley, Credit Suisse and Deutsche Bank Securities Inc. are active bookrunners.

BofA Merrill Lynch, Barclays, JPMorgan, BNP Paribas Securities Corp. and Credit Agricole Securities are bookrunners.

Proceeds will be used to acquire equipment notes that will be issued to finance the purchase of nine Airbus A321-231 aircraft delivered new to US Airways, Inc. from September 2014 to June 2015, six Boeing 737-823 aircraft delivered new to American from September 2015 to December 2015, one Boeing 777-323ER aircraft delivered new to American in October 2015 and two Boeing 787-8 aircraft delivered new to American from April 2015 to September 2015.

Standard Chartered offering

Standard Chartered sold $1 billion of 3.05% five-year senior notes (Aa3/A-/A+) on Tuesday at Treasuries plus 158 bps, according to a market source.

The notes sold at the tight end of guidance set in the 160 bps area over Treasuries, which had firmed from talk in the Treasuries plus 162.5 bps area.

Pricing was at 99.798 to yield 3.094%.

Standard Chartered, BofA Merrill Lynch, Credit Suisse and JPMorgan are the joint bookrunners for the Rule 144A and Regulation S sale.

The bank and financial services company is based in London.

OeKB global notes

And Oesterreichische Kontrollbank priced $1 billion of 1.875% global notes (Aaa/AA+) due Jan. 20, 2021 on Tuesday in line with guidance at mid-swaps plus 43 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.696, or Treasuries plus 35.5 bps.

Deutsche Bank, Goldman Sachs and HSBC managed the sale.

The export and financial services company for Austrian businesses is based in Vienna.

Vepco upsizes

Elsewhere on Tuesday, Virginia Electric & Power sold an upsized $750 million of 3.15% 10-year series A senior notes on Tuesday at Treasuries plus 105 bps, according to a market source and an FWP filing with the SEC.

The deal was upsized from $500 million.

Pricing was at 99.991 to yield 3.151%.

The notes (A2/A-/A) sold at the tight side of the Treasuries plus 110 bps area guidance and were initially talked in the range of 120 bps to 125 bps over Treasuries.

Citigroup, Goldman Sachs and Morgan Stanley are the joint bookrunners.

The company plans to use the proceeds for general corporate purposes, including the repayment of short-term debt.

The electric utility is based in Richmond, Va.

Reliance FA-backed notes

Reliance Standard Life Global Funding II priced $300 million of 3.05% funding agreement-backed notes (A2/A) due Jan. 20, 2021 at 155 bps over Treasuries on Tuesday, according to a market source.

The notes sold at the tight end of talk set in the range of Treasuries plus 155 bps to 160 bps.

Pricing was at 99.885 to yield 3.075%.

Credit Suisse, JPMorgan and U.S. Bancorp Investments Inc. were the bookrunners.

The insurance carrier is based in New York.

TTX new issue

Rounding out the day’s new deals, TTX Co. priced $300 million of 2.25% three-year notes (Baa1/A+/A-) on Tuesday with a spread of Treasuries plus 115 bps, a market source said.

Guidance was set in the Treasuries plus 120 bps area after having firmed from initial price talk in the 130 bps area over Treasuries.

Bookrunners for the Rule 144A and Regulation S deal were BofA Merrill Lynch, Wells Fargo, Citigroup, JPMorgan, Fifth Third Securities Inc., KeyCorp, MUFG, PNC Capital Markets LLC and Northeast Bank.

Proceeds will be used for general corporate purposes.

The railroad freight company is based in Chicago.

CPPIB prices

CPPIB Capital Inc. sold C$1.25 billion of 1% three-year notes at par to yield a spread of 60.9 bps over the interpolated Government of Canada bond curve on Tuesday in the first Canadian investment-grade bond offering this year.

“It’s not a true corporate, but somebody had to break the ice,” the source said.

The notes are guaranteed by the Canada Pension Plan Investment Board.

In the secondary market on Tuesday, MetLife Inc.’s 3.6% senior notes due 2025 headed out unchanged. The company announced after the market closed that it plans to spin off a major portion of its U.S. retail segment. MetLife said in a news release that it is considering an initial public offering, a spinoff or a sale.

Pfizer Inc.’s 3.4% senior notes due 2024 remain strong since the company announced plans of a $160 billion merger with Dublin-based Allergen plc in late November and traded about 1 bp tighter on Tuesday.

AstraZeneca plc’s 3.375% senior notes due 2025 firmed 1 bp during the session.

The Markit CDX North American Investment Grade 25 index eased about 1 bp to close at a spread of 99 bps.

MetLife unchanged

MetLife’s 3.6% notes due 2025 traded flat over the day at 123 bps bid, a market source said.

The company sold $500 million of the notes (A3/A-/A-) on Nov. 9 at a spread of Treasuries plus 125 bps.

The insurance and employee benefits company is based in New York City.

Pfizer improves

Pfizer’s 3.4% notes due 2024 firmed about 1 bp to 75 bps bid in the secondary market, a source said.

Pfizer sold $1 billion of the notes (A1/AA) on May 13, 2014 at Treasuries plus 80 bps.

The biopharmaceutical company is based in New York City.

AstraZeneca firms

AstraZeneca’s 3.375% notes due 2025 traded 1 bp tighter at 125 bps bid in the secondary market, a source said.

The company sold $2 billion of the notes (A2/A) on Nov. 10 at a spread of Treasuries plus 115 bps.

The biopharmaceutical company is based in London.

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