Scotiabank prices tight, joins EBRD, NWB in primary; Scotiabank edges tighter; Essex active

By Cristal Cody and Aleesia Forni

Virginia Beach, April 8 - The pace of issuance in the high-grade market remained steady on Tuesday, as issuers including Bank of Nova Scotia, the European Bank for Reconstruction and Development and Nederlandse Waterschapsbank NV brought new deals to the session's primary.

The Bank of Nova Scotia sold $1.75 billion of senior notes in three-year fixed- and floating-rate tranches on Tuesday.

The bank priced $750 million of floating-rate notes to yield Libor plus 31 basis points and $1 billion of 1.25% notes priced at the tight end of talk with a spread of Treasuries plus 43 bps.

The European Bank for Reconstruction and Development came to market with a $1 billion issue of 1.75% five-year notes priced at 99.54 to yield mid-swaps plus 1 bp.

The notes sold on top of talk.

Also on Tuesday, Nederlandse Waterschapsbank sold an upsized $750 million of 1.5% four-year notes in line with guidance at mid-swaps plus 20 bps.

The deal's size was increased from original plans of $500 million.

The session also saw Essex Portfolio LP sell $400 million of 3.875% senior notes due May 1, 2024 at 99.234 to yield 3.968% in a Rule 144A and Regulation S deal, according to a company press release.

Activity in the primary has slowed in recent sessions, as companies enter into earnings blackout periods.

Despite the slowdown, "investor appetite remains strong," a market source said during the session, evidenced by the solid orderbooks recent deals have received.

The source noted that the new deal from Scotiabank was nearly two times oversubscribed.

With earnings season kicking off this week, the lull in new issuance is expected to continue as the week moves on.

"It should be fairly similar to today," the source predicted of Wednesday's session.

The week has seen roughly $8.6 billion of paper price in the high-grade primary market so far, and the source noted that supply could reach earlier predications of $15 billion for the week.

Investment-grade bond spreads traded flat to modestly better in light activity over the afternoon, according to market sources.

The Markit CDX North American Investment Grade series 22 index was flat at a spread of 68 bps.

"Quite dead," one source said. "It feels like a holiday, though I don't know why."

Bank of Nova Scotia's two tranches of notes priced late afternoon and initially were not seen in aftermarket trading, according to a trader.

The tranche of fixed-rate notes due 2017 traded later in the day 1 bp tighter on the bid side, another trader said.

Essex Portfolio's 3.875% notes due 2024 were active in the secondary market, according to traders.

Scotiabank two-parter

The Bank of Nova Scotia priced $1.75 billion of senior notes in two tranches due 2017 on Tuesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The $750 million tranche of floating-rate notes sold at par to yield Libor plus 31 bps.

The $1 billion of 1.25% notes priced with a spread of Treasuries plus 43 bps.

Pricing was at 99.921 to yield 1.277%.

The notes sold at the tight end of talk.

Bank of Nova Scotia's fixed-rate notes due 2017 firmed to 42 bps bid in aftermarket trading, a trader said.

BofA Merrill Lynch, Citigroup Global Markets Inc., Barclays, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc. J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Goldman, Sachs & Co., Standard Chartered Bank and Wells Fargo Securities, LLC were the underwriters.

Proceeds will be added to the bank's funds and used for general business purposes.

The financial services company is based in Toronto.

EBRD sells $1 billion

The European Bank for Reconstruction and Development priced $1 billion of 1.75% five-year notes (Aaa/AAA/AAA) at 99.54 to yield mid-swaps plus 1 bp, according to a market source.

The bookrunners were Citigroup Global Markets, Deutsche Bank Securities, HSBC Securities and Morgan Stanley.

The lender to banks, businesses and industries is based in London.

Nederlandse Waterschapsbank upsizes

Nederlandse Waterschapsbank priced an upsized $750 million of 1.5% four-year notes (Aaa/AA+/) at mid-swaps plus 20 bps on Tuesday, an informed source said.

The deal was upsized from $500 million.

Pricing was at 99.587 to yield 1.607%.

Nederlandse Waterschapsbank priced the issue in line with guidance, which was set in the mid-swaps plus 20 bps area.

Bookrunners were BNP Paribas Securities Corp., Citigroup Global Markets and TD Securities.

The financial services company for the public sector is based in the Hague, the Netherlands.

Essex new issue

Essex Portfolio priced $400 million of 3.875% senior notes due May 1, 2024 at 99.234 to yield 3.968%, according to a company release.

The notes were sold in a Rule 144A and Regulation S transaction.

Essex Portfolio's 3.875% notes due 2024 traded at 127 bps bid, 123 bps offered, a trader said. The notes were quoted going out slightly wider at 128 bps bid, 126 bps offered in the secondary market, a trader at another desk said.

The company expects to use proceeds to refinance existing senior unsecured debt and for general corporate purposes.

Based in Palo Alto, Calif., Essex Portfolio is subsidiary of real estate investment trust Essex Property Trust Inc.

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