Scotiabank, BPCE, AutoZone, Goldman, National Rural bring deals; new deals trade mostly wider

By Aleesia Forni and Andrea Heisinger

New York, April 18 - A mix of financial and corporate names sold high-grade bonds during Thursday's session, including Bank of Nova Scotia, AutoZone, Inc. and France's Groupe BPCE.

Scotiabank sold $1.25 billion of five-year notes. The trade was upsized from $1 billion.

AutoZone priced $500 million of senior notes due 2023 in a deal that had a do-not-grow provision on it.

Paris-based financial services company BPCE priced $750 million of three-year notes in two tranches. There was $500 million of floating-rate notes and $250 million of fixed-rate notes.

A market source said there was about $1.5 billion on the books for the sale.

The preferred stock market saw new sales from Goldman Sachs Group Inc. and National Rural Utilities Cooperative Finance Corp.

Goldman Sachs sold $1 billion of perpetual fixed-to-floating-rate preferred stock, and National Rural priced $400 million of 30-year fixed-to-floating-rate subordinated notes.

The size of National Rural's sale was increased from $250 million.

As for the high-grade bond market, one source said that "it's the busiest we've been all week."

"[Equities] were kind of soft, but you have people wanting to price anyway," the source added.

The Markit CDX North American Investment Grade index was 2 basis point wider at a spread of 85 bps on Thursday.

In secondary trading, the new issues from AutoZone and National Rural were trading wider near the end of the session.

Scotiabank upsizes

Bank of Nova Scotia tapped the market for $1.25 billion of 1.45% five-year senior notes (Aa2/A+/AA-) at Treasuries plus 80 bps, a source close to the offering said.

Initial price talk was in the Treasuries plus low-to-mid 80 bps area. The size was increased from $1 billion.

The active bookrunners were Citigroup Global Markets Inc. and Scotia Capital (USA) Inc. The passives were Barclays, BofA Merrill Lynch and J.P. Morgan Securities LLC.

Proceeds are being added to the bank's funds and used for general corporate purposes.

The financial services company is based in Toronto.

BPCE's double demand

BPCE priced $750 million of three-year notes (A2/A/A+) in two tranches, a market source said.

The sale was two times oversubscribed with roughly $1.5 billion on the books.

A $500 million tranche of floating-rate notes priced at par to yield Libor plus 125 bps.

There was also $250 million of 1.7% notes sold at a spread of Treasuries plus 140 bps.

The bookrunners were Citigroup, BofA Merrill Lynch, Barclays and Natixis Securities America LLC.

The financial services company is based in Paris.

AutoZone does 10-year notes

AutoZone sold $500 million of 3.125% senior notes due 2023 (Baa2/BBB/BBB) during the day's session to yield Treasuries plus 150 bps, an informed source said.

There was a do-not-grow provision on the trade, the source said.

The notes were quoted 2 bps wider at 152 bps bid, 148 bps offered in the gray market.

The trader had seen the notes at 155 bps bid, 147 bps offered in the gray market earlier during the session.

BofA Merrill Lynch, Barclays and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds are being used for general corporate purposes.

The Memphis-based automotive parts retailer was last in the U.S. bond market with a $300 million sale of 2.875% 10-year notes priced at 120 bps over Treasuries on Nov. 1.

Goldman brings preferreds

Goldman Sachs sold $1 billion of 5.5% series J fixed-to-floating-rate noncumulative perpetual preferred stock, according to a market source.

Price talk was initially in the 5.125% to 5.75% area and later revised to the 5.5% to 5.6% range, the source said.

Goldman Sachs & Co. led the deal.

The dividend will begin floating on May 11, 2023 at Libor plus a spread.

The New York-based investment bank intends to list the new preferreds on the New York Stock Exchange under the ticker symbol "GSPJ."

Proceeds will provide additional operational funds and will also be used for general corporate purposes.

National Rural's sub notes

National Rural Utilities Cooperative Finance priced an upsized $400 million of 4.75% 30-year fixed-to-floating-rate subordinated deferrable-interest notes (A3/BBB+/) at par, a market source said.

Talk on the $1,000-par notes at midday was in the high 4% to low 5% area, the source said. The size was increased from $250 million.

The notes were quoted at 100.25 bid near Thursday's close.

The notes will have a fixed rate until April 30, 2023 and then a floating rate at Libor plus 291 bps.

The interest payment period may be extended but not for more than five years or beyond the maturity date.

JPMorgan, RBC Capital Markets LLC and RBS Securities Inc. were the bookrunners.

Proceeds are being used for general corporate purposes, possibly including the redemption of some or all of the company's 6.1% subordinated notes due 2044, to redeem some or all of its 5.95% subordinated notes due 2045 and to repay short-term debt.

The market lender for electric cooperatives is based in Herndon, Va.

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