NRW Bank taps floaters; FMS Wertmanagement eyes offering; spreads mostly flat

By Aleesia Forni

Virginia Beach, Aug. 26 – The investment-grade primary market showed some signs of life on Tuesday, following a muted Monday session.

NRW Bank came to the primary market with a $200 million tap of its existing floating-rate notes due Oct. 16, 2017.

The session also saw FMS Wertmanagement announce price talk for a planned offering of three-year global notes. The deal is expected to price on Wednesday.

With the summer slowdown in full swing, sources are expecting little primary activity for the remainder of the week.

New issuance should resume in September following the Labor Day holiday weekend.

In the secondary market, spreads were mostly flat overall on the day, sources said, with little market activity to speak of.

The Markit CDX North American Investment Grade series 22 index firmed 1 basis point on Tuesday to a spread of 55 bps.

Meanwhile, bank and financial paper was unchanged to tighter, a source said.

Bank of America Corp.’s 4% notes due 2024 (Baa2/A-/A) were quoted flat compared to Monday’s session.

NRW adds-on

The primary market saw NRW Bank price a $200 million tap of its floating-rate notes (Aa1/AA-/) due Oct. 16, 2017 on Tuesday at 100.511 to yield Libor plus 8 bps, according to a source away from the trade.

The notes have a coupon of Libor plus 24 bps.

Daiwa Securities, Deutsche Bank Securities Inc. and TD Securities were the bookrunners.

The total issue size now sits at $1.1 billion, including $900 million priced in two previous transactions.

The financial development products and services company is based in Dusseldorf, Germany.

FMS sets talk

Also on Tuesday, FMS Wertmanagement announced price talk for a planned benchmark offering of three-year global notes in the mid-swaps flat area, according to a market source and a 424B5 filed with the Securities and Exchange Commission.

The deal is expected to price on Wednesday.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and HSBC Securities are the bookrunners.

Proceeds from the sale will be used to refinance existing liabilities in order to replace short-term with long-term funding, and any remaining proceeds will be used for general corporate purposes.

The notes are guaranteed by the Federal Republic of Germany.

The financial services company is based in Munich.

Bank of America flat

In secondary market happenings, Bank of America’s 4% notes due 2024 (Baa2/A-/A) were unchanged at 129 bps offered, a market source said.

Bank of America sold $2.75 billion of the notes on March 27 at a spread of Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

Bank/brokerage CDS costs flat

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

Bank of America’s CDS costs ended flat at 64 bps bid, 67 bps offered. Citigroup Inc.’s CDS costs were also unchanged at 64 bps bid, 67 bps offered. JPMorgan Chase & Co.’s CDS costs were flat at 51 bps bid, 54 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 41 bps bid, 44 bps offered.

Merrill Lynch’s CDS costs remained at 66 bps bid, 70 bps offered. Morgan Stanley’s CDS costs ended flat at 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.’s CDS costs were also flat at 72 bps bid, 77 bps offered.

Paul Deckelman contributed to this review.

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