Gray Oak, Scotia, IBRD price; front-loaded supply eyed ahead of FOMC meeting; issues firm

By Cristal Cody

Tupelo, Miss., Sept. 11 – The high-grade primary market slowed on Friday but remained active, pushing week-to-date corporate and sovereign, supranational and agency deal volume to more than $76 billion.

Investment-grade corporate issuers sold more than $65 billion of bonds over the week, while SSA supply totaled $11 billion.

About $50 billion to $60 billion of deal volume was expected following Monday’s Labor Day holiday.

Three reported issuers were in the primary market over the day.

Bank of Nova Scotia sold $1.5 billion of registered senior bail-inable notes in two tranches (A2/A-/AA-) on Friday.

Gray Oak Pipeline, LLC priced $1.4 billion of senior notes in three tranches (Baa3/BBB/) in a Rule 144 and Regulation S offering.

In addition, World Bank, or International Bank for Reconstruction and Development (Aaa/AAA), sold $1.5 billion of five-year global sustainable development floating-rate notes.

World Bank reported the deal is the largest SOFR index-linked bond issued by a sovereign, supranational or agency.

The issue attracted book orders of more than $1.7 billion from over 30 investors and priced tighter than talk.

Otherwise, market activity thinned as focus turned to the 9/11 anniversary and next week’s Federal Reserve monetary policy meeting.

Front-loaded deal volume is expected before the two-day meeting ends on Wednesday, according to market sources.

About $35 billion to $40 billion of new investment-grade issuance is anticipated to price in the upcoming week.

Nestle tightens

New issues are trading mostly better than issuance in the secondary market, sources said.

Nutrition & Biosciences, Inc.’s $6.25 billion of guaranteed senior notes (Baa3/BBB/BBB) that priced in six tranches in a Rule 144A and Regulation S deal on Wednesday tightened about 9 basis points to 15 bps.

The $1.5 billion tranche of 2.3% notes due Nov. 1, 2030 firmed to 145 bps bid.

The notes priced at a spread of Treasuries plus 160 bps, compared to talk in the 180 bps spread area.

The $4 billion of senior notes that Nestle Holdings Inc. (Aa3/AA-) priced in four tranches on Tuesday firmed about 1 bp to 4 bps.

Corporate deal volume over the week was led by Nissan Motor Co., Ltd.’s $8 billion four-part offering of senior notes (Baa3/BBB-) that priced on Thursday. The notes were seen trading about 3 bps to 10 bps tighter.

Nissan’s 4.81% notes due Sept. 17, 2030 firmed to 410 bps bid.

The company sold $2.5 billion of the 10-year notes at a Treasuries plus 412.5 bps spread.

Initial talk was at the 437.5 bps to 450 bps area.

The Markit CDX North American Investment Grade 33 index eased more than 1 bp to close Friday at a spread of 69.78 bps.

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