Wells Fargo, Ford Motor Credit, Boeing issue bonds; Ford Motor paper firms; GATX flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 28 – Wells Fargo & Co., Ford Motor Credit Co. LLC, Boeing Co. and GATX Corp. were among the issuers accessing the investment-grade bond market on Tuesday.

As was expected, the market saw a busy primary session ahead of the two-day Federal Open Market Committee meeting, which will begin on Wednesday.

Wells Fargo priced the day’s largest offering, bringing a $2 billion issue of subordinated bonds to market at the tight end of price talk.

A source noted that the deal’s order book was more than two times oversubscribed.

Also on Tuesday, Ford Motor Credit sold a $1.65 billion two-part offering of five-year notes in fixed- and floating-rate tranches.

The session also saw Boeing issue $850 million of senior notes in three-, seven- and 10-year tranches, all coming at the tight end of talk.

GATX was also in the market on Tuesday, pricing a $250 million offering of long five-year notes in line with guidance.

In other primary action on Tuesday, Liberty Mutual Group Inc. priced a $300 million add-on to its existing 4.85% senior bonds due July 24, 2044, though details of the sale were unavailable at press time.

Liberty Mutual’s 4.85% notes due 2044 traded at 175 basis points bid, 170 bps offered in the secondary market late afternoon, a trader said.

In total, the high-grade bond market saw more than $5 billion of new issuance on Tuesday, bringing the week’s supply to more than $11 billion.

Investment-grade credit spreads headed out mostly unchanged to slightly tighter ahead of the Federal Reserve’s monetary policy report on Wednesday, market sources said.

The Markit CDX North American Investment Grade series 23 index was flat at a spread of 65 bps.

In aftermarket trading, Ford Motor’s 2.597% notes due 2019 tightened 2 bps, according to a trader.

GATX’s 2.6% senior notes due 2020 traded wrapped around the issuance price.

New issues from Boeing, Liberty Mutual and Hutchison Whampoa also were active in aftermarket trading late afternoon.

Wells Fargo raises $2 billion

The investment-grade primary market saw Wells Fargo price $2 billion of 4.65% subordinated bonds (A3/A/A+) due 2044 with a spread of Treasuries plus 165 bps on Tuesday, an informed source said.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 170 bps.

Pricing was at 99.312.

Wells Fargo Securities LLC was the bookrunner.

Wells Fargo is a San Francisco-based bank.

Ford Motor two-parter

Ford Motor Credit also came to market on Tuesday, pricing $1.65 billion of five-year notes (Baa3/BBB-/) in fixed- and floating-rate tranches, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The offering included $400 million of floating-rate notes priced at par to yield Libor plus 93 bps.

There was also $1.25 billion of 2.597% notes priced at par with a spread of Treasuries plus 110 bps. The tranche was priced tighter than the Treasuries plus 120 bps area price talk.

BNP Paribas Securities Corp., Banco Bradesco BBI SA, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and RBS Securities Inc. were the bookrunners.

Proceeds will be added to the general funds of Ford Credit and will be available for the purchase of receivables, for loans and for use in connection with the retirement of debt.

Ford Motor’s 2.597% notes due 2019 tightened to 108 bps bid, 107 bps offered in the secondary market, a trader said.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Boeing prices tight

Boeing sold $850 million of senior notes (A2/A/A) in three tranches, according to a source away from the trade.

The company sold $250 million of three-year floaters priced at par to yield Libor plus 12.5 bps.

There was also $300 million of 2.3% seven-year notes priced with a spread of Treasuries plus 60 bps. The notes sold at 98.407 to yield 2.55%.

A third tranche was $300 million of 2.85% 10-year notes priced at 98.474 to yield 3.028%, or Treasuries plus 75 bps.

The bookrunners for the three-year floaters are Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., BBVA Securities Inc., Credit Agricole CIB and SMBC Nikko.

The bookrunners for the notes due 2021 are Citigroup, BofA Merrill Lynch, Morgan Stanley & Co. LLC, Barclays, MUFG and Wells Fargo.

The bookrunners for the notes due 2024 are Citigroup, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Mizuho Securities USA Inc. and RBS Securities Inc.

Proceeds will be used for general corporate purposes.

Boeing’s notes due 2017 were not seen in aftermarket trading, while the tranche of notes due 2021 traded at 57 bps offered, a trader said.

The company’s notes due 2024 headed out at 71 bps bid, 69 bps offered.

Boeing is a Chicago-based aerospace company.

GATX prices in line with talk

GATX priced $250 million of 2.6% senior notes (Baa2/BBB/) due March 30, 2020 at Treasuries plus 120 bps on Tuesday, according to an informed source and an FWP filed with the SEC.

Pricing was in line with guidance.

The notes sold at 99.5 to yield 2.7%.

BofA Merrill Lynch, Citigroup and Morgan Stanley were the bookrunners.

Proceeds will be used to repay commercial paper, to repay the approximately $88 million under the company’s secured floating-rate term loan due Dec. 19, 2020 and for general corporate purposes, including working capital and capital expenditures.

GATX’s 2.6% senior notes due 2020 traded mostly flat at 120 bps bid, 115 bps offered, according to a trader.

The transportation leasing service company is based in Chicago.

Bank/brokerage CDS costs

Investment-grade bank and brokerage CDS prices were lower on Tuesday, according to a market source.

Bank of America Corp.’s CDS costs decreased 1 bp to 69 bps bid, 72 bps offered. Citigroup Inc.’s CDS costs were 2 bps lower at 67 bps bid, 70 bps offered. JPMorgan Chase & Co.’s CDS costs were 2 bps lower at 59 bps bid, 62 bps offered. Wells Fargo & Co.’s CDS costs were flat at 46 bps bid, 49 bps offered.

Merrill Lynch’s CDS costs were 2 bps lower at 73 bps bid, 76 bps offered. Morgan Stanley’s CDS costs ended 2 bps lower 77 bps bid, 80 bps offered. Goldman Sachs Group, Inc.’s CDS costs were also 2 bps lower at 80 bps bid, 83 bps offered.

Paul Deckelman contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.