Wells Fargo brings $2.5 billion bank notes following FOMC meeting; Citigroup, Goldman firm

By Aleesia Forni and Cristal Cody

New York, March 16 – Wells Fargo Bank NA sold a $2.5 billion issue of bank notes in new and reopened tranches on Wednesday as the Federal Open Market Committee wrapped up its two-day policy meeting.

In a move that was widely anticipated, the Federal Reserve kept its benchmark interest rate unchanged at 0.25% to 0.5%.

The Federal Reserve noted that economic activity has expanded at “a moderate pace” despite global economic developments in recent months.

Following the quiet sessions the market has seen this week, a pickup in activity is expected on Thursday, with one market source calling for “at least a few” new deals to price.

Roughly $15.2 billion of new investment-grade issuance has entered the primary so far this week.

Investment-grade bonds were mixed in secondary trading on Wednesday.

Citigroup Inc.’s 3.7% subordinated notes due 2026 traded 3 bps better over the day.

Goldman Sachs Group Inc.’s 3.75% senior notes due 2026 tightened 5 bps in the secondary market.

Morgan Stanley’s 3.875% senior notes due 2026 eased 1 bp during the session.

Mitsubishi UFJ Financial Group, Inc.’s new 3.85% senior notes due 2026 were unchanged on the day.

The Markit CDX North American Investment Grade index improved following the Federal Reserve meeting to close 3 basis points tighter at a spread of 86 bps.

Wells Fargo bank notes

The primary market on Wednesday saw Wells Fargo Bank sell $2.5 billion of senior bank notes (Aa2/AA) in new and reopened tranches, both inside initial price thoughts, a market source said.

A $2 billion tranche of 18-month floating-rate notes sold on top of talk at par to yield Libor plus 55 bps.

The notes sold inside initial talk set in the 60 bps to 65 bps range over Libor.

A $500 million add-on to the bank’s existing 1.65% two-year notes priced at 100.034 to yield 1.631%, or Treasuries plus 65 bps.

The tranche sold on top of guidance and at the tight end of initial price thoughts in the 70 bps area over Treasuries.

Proceeds will be used for general corporate purposes.

Wells Fargo Securities LLC was the bookrunner.

The bank is based in San Francisco.

Citigroup stronger

Citigroup’s 3.7% notes due 2026 firmed 3 bps on Wednesday to 168 bps bid, a market source said.

Citigroup sold $2 billion of the notes (Baa1/BBB+/A) on Jan. 5 at a spread of Treasuries plus 148 bps.

The financial services company is based in New York.

Goldman tightens

Goldman Sachs Group’s 3.75% notes due 2026 traded 5 bps tighter to head out at 172 bps bid, according to a market source.

Goldman sold $1.75 billion of the notes (A3/BBB+/A) on Feb. 22 at a spread of Treasuries plus 203 bps.

The financial services company is based in New York City.

Morgan Stanley eases

Morgan Stanley’s 3.875% notes due 2026 eased 1 bp to 163 bps bid on Wednesday, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/BBB+/A) on Jan. 22 at 185 bps plus Treasuries.

The financial services company is based in New York City.

MUFG flat

Mitsubishi UFJ Financial Group’s 3.85% notes due 2026 were unchanged on the day at 163 bps bid, according to a market source.

The company sold $2.5 billion of the notes (A1/A) on Feb. 23 at a spread of Treasuries plus 215 bps.

The financial services company is based in Tokyo.

© 2015 Prospect News.
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