NWB Bank prices add-on amid weaker tone; Citigroup, Goldman unchanged; eBay stable

By Aleesia Forni and Cristal Cody

Virginia Beach, Dec. 9 – The investment-grade bond market was quiet on Tuesday, with a single deal from Nederlandse Waterschapsbank NV pricing during the session.

The Netherlands-based financial services company sold a $500 million add-on to its existing 0.5% notes due March 4, 2016 amid a weaker tone to the market that kept most issuers on the sidelines.

The notes (Aaa/AA+/) sold in line with guidance via bookrunners BofA Merrill Lynch, Credit Suisse Securities and J.P. Morgan Securities LLC.

In total, $3.75 billion of new issuance has priced this week, a sharp decline from last week’s frenzied $49 billion of supply.

Sources had expected around $15 billion of new issuance to price this week as the market begins to wind down for the year.

Investment-grade credit spreads continued to leak wider over the day after easing 2 basis points in the previous session, sources said.

The Markit CDX North American Investment Grade series 23 index was unchanged to moderately weaker at a spread of 65 bps.

Market participants are focused on the Federal Reserve’s upcoming two-day policy-setting meeting in the week ahead and any potential interest rate changes, sources said.

Bank and financial paper traded mostly unchanged in the secondary market, a source said.

Citigroup Inc.’s 3.75% notes due 2024 were flat after the paper firmed 3 bps in the previous session.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 traded unchanged on the day after easing 1 bp on Monday, a market source said.

eBay Inc.’s 3.45% senior notes due 2024 headed out flat, though the bonds have widened nearly 50 bps since July, according to a market source.

Citigroup flat

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) were unchanged on Tuesday at 125 bps bid, a market source said.

The bank sold $1.25 billion of the 10-year notes on June 9 at Treasuries plus 115 bps.

Citigroup is based in New York City.

Goldman unchanged

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded flat in the secondary market at 138 bps bid, a source said.

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.

eBay steady

eBay’s 3.45% notes due 2024 (A2/A/A) were quoted unchanged over the session at 149 bps bid, according to a market source.

The company sold $750 million of the notes at Treasuries plus 100 bps on July 23.

The global online commerce and payments platform company is based in San Jose, Calif.

Bank/brokerage CDS costs

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

Bank of America Corp.’s CDS costs rose 3 bps to 67 bps bid, 70 bps offered. Citigroup’s CDS costs were also 3 bps higher at 69 bps bid, 72 bps offered. JPMorgan Chase & Co.’s CDS costs were 2 bps higher at 58 bps bid, 61 bps offered. Wells Fargo & Co.’s CDS costs increased 2 bps to 46 bps bid, 49 bps offered.

Merrill Lynch’s CDS costs were 3 bps higher at 70 bps bid, 74 bps offered. Morgan Stanley’s CDS costs ended 4 bps higher at 81 bps bid, 84 bps offered. Goldman Sachs Group’s CDS costs increased 3 bps to 84 bps bid, 87 bps offered.

Paul Deckelman contributed to this review.

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