Investment-grade bank, financial issuers price over week; paper mostly improves in secondary

By Cristal Cody

Tupelo, Miss., March 4 – Investment-grade issuers stood down Monday with volatility high as Russia continued its invasion of the Ukraine but found their stride later in the week.

Issuance picked up quickly with $11.75 billion of volume on Tuesday, over $18 billion on Wednesday and $23.75 billion more on Thursday.

With over $53 billion of corporate supply, the pace surpassed market expectations of about $25 billion of deal volume for the week.

The issuance included more than $23 billion of paper from the bank and financial space with notes mostly improving about 1 basis point to 4 bps in the secondary market, sources reported.

On Tuesday, American Express Co. came by with $3.5 billion of three- and five-year notes (A2/BBB+/A) in three tranches with the two fixed-rate issues tightening 25 bps from initial guidance.

American Express’ issues improved about 2 bps to 3 bps with the $1.75 billion tranche of 2.55% notes due March 4, 2027, which priced at a Treasuries plus 100 bps spread, quoted at 97 bps offered.

Capital One Financial Corp.’s $2.5 billion of fixed-to-floating-rate notes (Baa1/BBB/A-) priced on Tuesday in two parts 20 bps better than initial talk and firmed about 1 bp in secondary trading.

Charles Schwab Corp. tapped the market Tuesday with $3 billion of five- and 10-year senior notes (A2/A/A) in three parts that came 15 bps to 25 bps tighter than initial talk and traded about 2 bps to 4 bps better.

Schwab also returned to the primary market Wednesday with a $750 million offering of 5% perpetual preferred stock (Baa2/BBB/BBB-) that printed tighter than talk at the 5.5% area and on the tight side of guidance in the 5% to 5.125% area.

The preferreds rose 1.5 points to the 101.5 range on Thursday but declined Friday to the par area.

Financial derivatives exchange CME Group Inc.’s new 2.65% notes due March 15, 2032 (Aa3/AA-) that priced on Tuesday tightened to 95 bps offered.

CME sold $750 million of the notes at Treasuries plus 98 bps, tighter than initial talk at the 120 bps spread area.

The 3% notes due March 16, 2032 (A3/A-) that Chicago Board Options Exchange owner CBOE Global Markets Inc. priced on Wednesday also tightened about 3 bps in the secondary market.

CBOE sold $300 million of the notes at a Treasuries plus 120 bps spread, 15 bps tighter than talk.

Thursday bank supply

Thursday’s session saw additional bank supply from Bank of America Corp., Bank of Montreal, Commonwealth Bank of Australia, HSBC Holdings plc and Sumitomo Mitsui Trust Bank Ltd. print tighter than guidance.

Bank of America’s $2.5 billion of 3.846% notes due March 8, 2037 (Baa1/BBB+/A) priced 15 bps better than talk at a spread of Treasuries plus 200 bps and traded 3 bps better in the secondary market.

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