Toyota, National Bank, VEON, UDR, European Bank price; ‘rocky day,’ credit spreads ease

By Cristal Cody

Tupelo, Miss., Oct. 2 – Several investment-grade issuers priced bonds over Wednesday’s session, while a risk-off tone caused by weaker manufacturing and jobs data sent credit spreads wider and stocks tumbling.

Toyota Motor Credit Corp. sold $1.75 billion of notes in three tranches.

National Bank of Canada priced an inaugural $750 million of three-year bail-in sustainability bonds.

VEON Holdings BV brought a downsized $700 million of split-rated senior notes due April 9, 2025 to the primary market on Wednesday.

UDR, Inc. sold $400 million of guaranteed medium-term notes in two tranches that included a reopening and a new green issue.

The sovereign, supranational and agency market also saw a deal from European Investment Bank, which priced $1 billion of 10-year global notes.

In Canadian dollar supply, Allied Properties Real Estate Investment Trust “was the only business brave enough to tackle the markets,” a source said.

The company priced C$300 million of 3.113% senior debentures due April 8, 2027 (Baa3/DBRS: BBB) at par to yield a spread of 180 basis points over the interpolated Government of Canada bond curve.

“It was a rocky day, [but] not so much in the credit markets – credit markets are a little slower to respond to some of the risk-off tone we’re seeing in the equity markets,” a source said.

Allied REIT’s deal follows Enbridge Inc.’s C$1 billion of 2.99% medium-term notes due Oct, 3, 2029 (Baa2/BBB+/DBRS: BBB) that priced at 99.931 to yield 2.998% on Tuesday.

The Markit CDX North American Investment Grade 33 index eased about 3 bps on Wednesday to close at a spread of 63 bps.

High-grade dollar volume week to date totals about $10 billion, in line with the $10 billion to $15 billion of issuance syndicate sources forecast for the week.

Toyota prices $1.75 billion

Toyota Motor Credit priced $1.75 billion of notes (Aa3/AA-/) in three tranches on Wednesday, according to FWP filings with the Securities and Exchange Commission.

The company sold $850 million of two-year floaters at par to yield Libor plus 29 bps.

A $400 million tranche of 1.8% two-year fixed-rate notes priced at 99.838 to yield 1.806%, or a spread of Treasuries plus 33 bps.

Toyota sold $500 million of 2% five-year notes with a spread of 60 bps over Treasuries. The notes were sold at 99.91 to yield 2.019%.

BofA Securities, Inc., Commerz Markets LLC, HSBC Securities (USA) Inc., SG Americas Securities LLC and SMBC Nikko Securities America, Inc. were the bookrunners.

Toyota Motor Credit is a Torrance, Calif.-based financing arm and subsidiary of Toyota Motor Corp.

National Bank prices $750 million

National Bank of Canada (A3/A/A+) priced an inaugural $750 million of 2.15% three-year bail-in sustainability bonds on Wednesday at a spread of 72 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 85 bps area.

Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, HSBC, TD Securities (USA) LLC and National Bank Financial Inc. were the bookrunners.

The deal is Rule 144A- and Regulation S-eligible.

The financial group is based in Montreal.

VEON sells spit-rated notes

VEON Holdings priced $700 million of 4% senior notes due April 9, 2025 notes (Ba2/BB+/BBB-/) on Wednesday at a spread of 257.6 bps over Treasuries, according to a market source and a news release.

Initial price talk was in the 3.875% to 4% area.

The deal was downsized from an announced $1 billion expected offering.

Citigroup, HSBC, J.P. Morgan Securities LLC and Societe Generale were the bookrunners.

The company, a subsidiary of VEON Ltd., held a roadshow that started on Thursday in the U.S. and U.K. markets.

Amsterdam-based VEON Ltd. provides mobile and fixed-line telecommunications services through its subsidiaries in emerging markets.

UDR sells two tranches

UDR sold $400 million of guaranteed medium-term notes (Baa1/BBB+/) in two tranches on Wednesday, according to an FWP filing.

The company priced a $100 million add-on to its 3.2% medium-term notes due Jan. 15, 2030 at 103.319 to yield 2.817% and a spread of Treasuries plus 123 bps.

UDR originally sold $300 million of the notes on June 25 at 99.662 to yield 3.238%, or a spread of Treasuries plus 125 bps. The total outstanding is now $400 million.

UDR also placed $300 million of 3.1% green notes due Nov. 1, 2034 at 99.557 to yield 3.137%. The notes priced with a spread of 155 bps over Treasuries.

Wells Fargo Securities LLC, BofA Securities, Jefferies LLC and U.S. Bancorp Investments Inc. were the bookrunners.

The notes are fully and unconditionally guaranteed by United Dominion Realty, LP.

UDR is a real estate investment trust that owns and operates apartment communities.

European Bank prices $1 billion

The European Investment Bank (Aaa/AAA/AAA) priced $1 billion of 1.625% 10-year global notes on Wednesday at mid-swaps plus 19 bps, or a spread of 9.16 bps over Treasuries, according to a market source.

Initial price talk was in the mid-swaps plus 21 bps area.

Barclays, Citigroup, J.P. Morgan and Skandinaviska Enskilda Banken were the lead managers.

The lender for the European Union is based in Kirchberg, Luxembourg.

© 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.