Barclays, Lloyds, Texas Eastern Transmission sell bonds; Sweden prices tighter than talk

By Cristal Cody

Tupelo, Miss., Jan. 4 – A few corporate and SSA high-grade issuers priced bonds on Thursday in the midst of a winter storm that caused many New York syndicate desks to close early.

Barclays Bank plc sold $3 billion of notes in two tranches.

Lloyds Banking Group plc placed $1.5 billion of 30-year subordinated tier 2 notes.

Also, Texas Eastern Transmission, LP priced $800 million of senior notes in two tranches following the company’s fixed-income investor calls on Tuesday and Wednesday.

In SSA supply, Sweden priced $3 billion of five-year bonds on the tight side of talk on Thursday.

“It is a great start of the year for the kingdom,” Anna Sjulander, head of funding at the Swedish National Debt Office, said in a release. “Both volume and geographical distribution illustrated strong investor demand.”

In 2018, the debt office said it plans to issue bonds in foreign currency equivalent to SEK 102 billion. After Thursday’s transaction, approximately SEK 78 billion remains.

Also on Thursday, Kommunalbanken AS priced $1.5 billion of five-year notes.

Several issuers are preparing to tap the primary market in the near future, a source said.

Athene Global Funding is holding fixed-income investor calls Thursday through Friday for an offering of dollar-denominated senior notes (//BBB), according to a market source.

Credit spreads have tightened over the week. On Thursday, the Markit CDX North American Investment Grade 29 index firmed about 1 basis point to a spread of 46 bps.

“One positive development for high grade spreads to start the New Year is that FX hedging costs have now retraced their seasonal spike from 4Q,” according to a BofA Merrill Lynch research note released on Thursday. “That makes it significantly cheaper for foreign investors to buy USD high grade bonds and to hedge the FX risk, as most do.”

Barclays sells $3 billion

Barclays Bank (A1/A/A) priced $3 billion of notes in two tranches in Thursday’s session, according to a market source.

The bank sold $1 billion of floating-rate notes due Jan. 11, 2021 at Libor plus 46 bps and $2 billion of 2.65% three-year fixed-rate notes with a Treasuries plus 65 bps spread.

Barclays was the bookrunner.

Barclays Bank is a banking and financial services company based in London.

Lloyds raises $1.5 billion

Lloyds Banking Group priced $1.5 billion of 4.344% 30-year subordinated tier 2 notes (A3/BBB+/A+) at par to yield a spread of 155 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company sold the notes on the tight side of initial guidance in the Treasuries plus 160 bps area.

BNP Paribas Securities Corp., Goldman Sachs & Co., Lloyds Securities Inc., BofA Merrill Lynch and UBS Securities LLC were the bookrunners.

The London bank and financial services group plans to use the proceeds for general corporate purposes.

Texas Eastern’s notes

Texas Eastern Transmission (Baa1/BBB+/BBB+) priced $800 million of senior notes in a Rule 144A and Regulation S two-tranche offering on Thursday, according to a market source.

The company sold $400 million of 3.5% 10-year notes with a spread of 110 bps over Treasuries.

Texas Eastern Transmission priced $400 million of 4.15% 30-year notes at a Treasuries plus 140 bps spread.

Both tranches priced tighter than initial price talk.

Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Texas Eastern Transmission is a Houston-based natural gas storage and transporter provider and subsidiary of Spectra Energy.

Sweden prices $3 billion

Sweden (Aaa/AAA/AAA) sold $3 billion of 2.375% bonds due Feb. 15, 2023 on Thursday at 99.632 to yield 2.452% in a Rule 144A and Regulation S offering, according to a market source and a news release from the Swedish National Debt Office.

The notes priced at a spread of mid-swaps plus 12 bps, or Treasuries plus 16.2 bps.

The notes were initially talked to price in the mid-swaps plus 14 bps area.

BMO Capital Markets Corp., Goldman Sachs International, HSBC Bank plc and Nordea Bank AB were the bookrunners.

The deal had a total bid volume of $7.5 billion, and more than 80 investors took part, according to the release.

Proceeds will be used to refinance loans to the Riksbank, the central bank of Sweden.

Kommunalbanken prints

Kommunalbanken (Aaa/AAA/) priced $1.5 billion of 2.5% five-year notes at a spread of Treasuries plus 24.1 bps, according to a market source.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Nomura Securities International, Inc. and RBC Capital Markets, LLC were the lead managers of the Rule 144A and Regulation S offering.

The government-funded lender to municipalities is based in Oslo.

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