Financials dominate primary; BNY, Huntington National price; Apple firms; Verizon, AT&T steady

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 19 – Financial issuers dominated the primary market on Thursday, with Bank of New York Mellon Corp., Huntington National Bank and World Bank pricing deals.

Bank of New York Mellon issued both tranches of its new $2 billion issue at the tight end of price talk, attracting an orderbook that was more than 2.5 times oversubscribed.

Huntington National Bank was also in the market on Thursday. The bank priced $1 billion of bank notes in two parts.

International Bank for Reconstruction and Development (World Bank) upsized its global green bond by $100 million, ultimately pricing a $600 million 10-year offering in line with talk.

In other new issue activity, Kemper Corp. sold $250 million of senior notes at the tight end of price talk.

So far, the high-grade bond market has hosted around $14.1 billion of new issuance this week, falling short of what was predicted to be $20 billion of supply.

Looking forward, a quiet Friday session is expected to close out the Presidents’ Day holiday-shortened week.

“We’re probably shut down until next week,” a market source said, adding that the week ahead could see a “significant” amount of new issuance.

Investment-grade bonds were little changed on the day but mostly better from a week ago, market sources said.

The Markit CDX North American Investment Grade index was flat at a spread of 64 basis points.

Apple Inc.’s 2.5% senior notes due 2025 traded on Thursday 5 bps tighter from the previous week.

Verizon Communications Inc.’s bonds were flat to modestly tighter over the session but about 6 bps stronger from a week ago.

AT&T Inc.’s 4.8% bonds due 2044 traded mostly unchanged in the secondary market.

BNY sells $2 billion

Bank of New York Mellon priced $2 billion of senior notes (A1/A+/AA-) in tranches due 2020 and 2025 on Thursday, a market source said.

There was $1.25 billion of 2.15% notes due 2020 priced at 62 bps over Treasuries.

Pricing was at 99.844 to yield 2.183%.

A second tranche was $750 million of 3% notes due 2025 priced at 99.786 to yield 3.025%, or 92 bps over Treasuries.

Both tranches sold at the tight end of price talk.

BNY Mellon, Citigroup Global Markets Inc., Goldman Sachs & Co. and UBS Securities LLC were the bookrunners.

BNY Mellon is a New York-based financial services company.

Huntington bank notes

Also on Thursday, Huntington National Bank priced $1 billion of senior bank notes (A3/BBB+/) in two parts, a market source said.

There was $500 million of 1.7% notes due 2018 at 70 bps. The notes sold in line with talk that was set in the 70 bps area.

A second tranche was $500 million of 2.4% five-year notes priced at mid-swaps plus 85 bps. Pricing was at the tight end of the 87 bps area talk.

Proceeds will be used for general corporate purposes.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the bookrunners.

The banking affiliate of Huntington Bancshares is based in Columbus, Ohio.

World Bank upsizes

World Bank sold an upsized $600 million 2.125% 10-year global green bond (Aaa/AAA/AAA) at mid-swaps plus 1 bp, according to a market source.

The bond sold in line with price talk.

Deutsche Bank, Morgan Stanley and Skandinaviska Enskilda Banken were the bookrunners.

The issuer is based in Washington, D.C.

Kemper prices tight

Kemper sold $250 million of senior notes (Baa3/BBB-/BBB-) due Feb. 15, 2025 with a spread of Treasuries plus 225 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes sold at the tight end of price talk.

Pricing was at 99.937 to yield 4.359%.

JPMorgan and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay the company’s 6% senior notes due Nov. 30, 2015 and for general corporate purposes.

Kemper is a diversified insurance holding company based in Chicago.

Apple better

Apple’s 2.5% notes due 2025 tightened 5 bps over the week to 71 bps bid on Thursday, a source said.

Apple sold $1.5 billion of the notes (Aa1/AA+/) on Feb. 2 at a spread of Treasuries plus 85 bps.

The computer and mobile communications device company is based in Cupertino, Calif.

Verizon improves

Verizon’s 3.5% notes due 2024 were quoted slightly better in the 129 bps area in secondary trading on Thursday, a market source said.

The issue traded on Friday at 136 bps offered.

Verizon sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22 at a spread of Treasuries plus 135 bps.

The telecommunications company is based in New York City.

AT&T mostly flat

AT&T’s 4.8% bonds due 2044 traded flat at 213 bps offered, according to a market source.

AT&T sold $2 billion of the bonds (Baa1/BBB+/A) on June 3, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in Dallas.

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