European Stability brings debut dollar-denominated bond; CPPIB prices; Boral prints

By Cristal Cody

Tupelo, Miss., Oct. 24 – The European Stability Mechanism priced a debut $3 billion offering of five-year notes on Tuesday.

“I am very happy with the successful launch of the ESM’s first-ever dollar-denominated bond after more than a year of preparations,” Kalin Anev Janse, ESM secretary general and member of the management board responsible for funding, asset liability management and lending, said in a news release.

“Issuing bonds in dollars will allow us to broaden our investor base and spread our funding liquidity risk across the euro and dollar markets,” Janse said. “We have added a sizable number of new investors to our books, for example from the Americas, which improved the geographical diversification of our investor base.”

The European Stability Mechanism intends to have a regular presence in the dollar market, with a minimum of one to two benchmark deals each year.

The ESM said it plans to build up a limited dollar yield curve with standard two-, three- and five-year maturities.

In other SSA issuance, CPPIB Capital Inc. priced $1 billion of 10-year medium-term notes in a Rule 144A and Regulation S offering.

In corporate supply, Boral Ltd. placed a $950 million Rule 144A and Regulation S offering of notes in two tranches.

Also, the Federation des caisses Desjardins du Quebec and Goldman Sachs Group, Inc. were expected in the primary market on Tuesday.

Citigroup Inc. was in the primary market on Monday with a $4.4 billion three-part offering of notes.

The Markit CDX North American Investment Grade 29 index closed mostly unchanged at a spread of 53 basis points.

European Stability debuts

European Stability Mechanism (Aa1/AAA) priced a debut $3 billion of 2.125% five-year notes at mid-swaps plus 10 bps and a yield of 2.201% on Tuesday, according to a market source and agency press release.

The notes were initially talked to price in the mid-swaps plus 12 bps area.

The order book was in excess of $7.25 billion.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were the bookrunners for the Rule 144A and Regulation S offering.

The ESM said it will run no currency risk from the deal because it plans to swap the proceeds back into euros.

European Stability Mechanism is an intergovernmental organization based in Luxembourg.

CPPIB prices $1 billion

CPPIB Capital (Aaa/AAA/AAA) priced $1 billion of 2.75% 10-year medium-term notes in a Rule 144A and Regulation S offering on Tuesday at a spread of mid-swaps plus 40 bps, or Treasuries plus 37.95 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus low 40 bps area.

The order book was in excess of $2.65 billion.

BofA Merrill Lynch, BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and TD Bank Securities (USA) LLC were the bookrunners.

CPPIB Capital is a Toronto-based investment management company for the Canada Pension Plan Investment Board.

Boral brings two tranches

Boral (Baa2/BBB) priced a $950 million Rule 144A and Regulation S offering of notes in two tranches on Tuesday, according to a market source.

The company sold $450 million of 3% five-year notes with a spread of Treasuries plus 105 bps.

Boral priced $500 million of 3.75% long 10-year notes at a Treasuries plus 140 bps spread.

Both tranches priced on the tight side of guidance.

Citigroup and JPMorgan were the lead managers.

The company held a roadshow in the previous week.

Boral is a building and construction materials company based in Sydney.

Citi prices $4.4 billion

Citigroup (Baa1/BBB+/A) priced $4.4 billion of senior notes in three tranches on Monday, according to a market source and FWP filings with the Securities and Exchange Commission.

Citigroup priced $400 million of five-year floating-rate notes at par to yield Libor plus 69 bps.

Citigroup sold $1.75 billion of 2.7% five-year fixed-rate notes at 99.666 to yield 2.772%, or a spread of Treasuries plus 77 bps.

The $2.25 billion tranche of 3.52% fixed-to-floating rate notes due Oct. 27, 2028 priced at par to yield Treasuries plus 115 bps. The notes will convert to a floating rate of Libor plus 115.1 bps on Oct. 27, 2027.

The floaters had an $800 million final book size, while the five-year fixed-rate notes saw a final book size of $2.8 billion and the fixed/floaters had a final book size of $3.6 billion.

Citigroup was the bookrunner.

Citigroup is a financial services company based in New York.

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