Credit Suisse sells $2 billion; pace to continue in week ahead; Bank of America improves

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 24 – Credit Suisse AG brought a new offering of senior notes to market on Friday, closing a strong week for investment-grade bonds.

The bank, acting through its New York branch, sold the $2 billion offering of seven-year notes around 8 basis points tighter than price guidance.

The rare Friday trade pushes the week’s total supply to roughly $28.13 billion, topping expectations of $15 billion to $20 billion.

This figure is around four times what the primary saw last week, with only $7 billion of new issuance pricing.

Meanwhile, cash continued to flow into investment-grade bond funds, with Lipper reporting net inflows of $390 million for the week ended Oct. 22.

This figure is down from last week’s $2.58 billion of inflows, bringing the year-to-date total inflows to more than $68 billion.

Looking forward, sources are expecting the market’s momentum to carry on into the week ahead as companies continue to exit their earnings season blackouts.

Around $20 billion to $25 billion of new issuance is expected to price during the last full week of October.

Investment-grade credit spreads ended better with the Markit CDX North American Investment Grade series 23 index 1 bp tighter at a spread of 65 bps.

Bank and financial paper was mixed in secondary trading, a source said.

Bank of America Corp.’s 4% notes due 2024 ended 3 bps tighter on the week, while Goldman Sachs Group Inc.’s 3.85% notes due 2024 were unchanged.

Verizon Communications Inc.’s existing bonds traded mostly tighter following the company’s $6.5 billion three-part offering on Wednesday, according to a market source.

Credit Suisse prices tight

In a rare Friday new issue, Credit Suisse, acting through its New York branch, priced $2 billion of 3% senior notes (A1/A/A) due 2021 at Treasuries plus 117 bps, according to a market source.

The notes sold tighter than guidance.

Pricing was at 99.4 to yield 3.096%.

Credit Suisse Securities (USA) LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in Zurich.

Bank of America tightens

Bank of America’s 4% notes due 2024 (Baa2/A-/A) ended the week about 3 bps tighter at 132 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.

Goldman unchanged

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded flat on the week at 146 bps offered, according to a market source.

Goldman Sachs sold $2.25 billion of the notes on June 30 at Treasuries plus 135 bps.

The financial services company is based in New York City.

Verizon better

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) traded about 4 bps better on the week at 130 bps offered, a source said.

Verizon sold $1.25 billion of the 10-year notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

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