Stronger tone sees GM Financial, Kimco price; financial paper mixed; credit spreads firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 7 – Electricite de France SA, General Motors Financial Co., Inc., Jackson National Life Global Funding, Kimco Realty Corp. and Banque Federative du Credit Mutuel gave life to this week’s sleepy primary, taking full advantage of a more constructive market tone and a positive shift in sentiment following a slow start to the week.

A $4.75 billion five-tranche issue from Electricite de France led the session, with one source noting that the deal’s order book was more than two times oversubscribed.

In its split-rated new issue, GM Financial offered a two-tranche long three-year issue of notes around 20 basis points tighter than initial price thoughts.

Meantime, new deals priced from Export Development Canada and Inter-American Development Bank.

Despite a more stable environment on Wednesday, sources expect the remainder of the week to see light primary activity, with continued earnings, a volatile market backdrop and fragile conditions keeping issuers away.

Bank and financial paper was mixed over the trading session, while credit spreads tightened 3 bps.

Bank of America Corp.’s 3.875% senior notes due 2025 traded 5 bps better.

Barclays plc’s notes firmed 6 bps in the secondary market.

Citigroup Inc.’s 3.3% senior notes due 2025 traded 2 bps tighter.

JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 firmed about 1 bp.

Morgan Stanley’s 4% senior notes due 2025 traded 1 bp weaker on the day.

HSBC Holdings plc’s 4.25% subordinated notes due 2025 were unchanged.

The Markit CDX North American Investment Grade 25 index closed the day 3 bps tighter at a spread of 84 bps.

EDF sells $4.75 billion

Electricite de France sold $4.75 billion of notes (A1/A+/A) in five tranches during Wednesday’s session, a market source said.

The sale included $1.5 billion of 2.35% five-year notes sold at 115 bps over Treasuries.

A $1.25 billion tranche of 3.625% 10-year green bonds priced with a spread of 165 bps over Treasuries.

Credit Agricole, BofA Merrill Lynch, MUFG, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Mizuho Securities were bookrunners for the five- and 10-year tranches.

Also, $500 million of 4.75% 20-year bonds priced with a 200 bps spread over Treasuries.

The company sold $1.15 billion of 4.95% 30-year bonds at Treasuries plus 205 bps.

Finally, $350 million of 5.25% 40-year bonds sold at Treasuries plus 245 bps.

Bookrunners for the 20-, 30- and 40-year tranches were BofA Merrill Lynch, MUFG, Barclays, Goldman Sachs & Co. and RBC Capital Markets LLC.

The sale was done via Rule 144A and Regulation S.

The main electricity generation and distribution company in France is based in Paris.

GM Financial crossovers

Also on Wednesday, General Motors Financial sold $1.75 billion of senior notes (Ba1/BBB-/BBB-) on Wednesday in fixed- and floating-rate tranches due Jan. 15, 2019, according to a market source.

There was $1.5 billion of 3.1% notes sold at 99.954 to yield 3.116%, or Treasuries plus 220 bps.

Pricing was in line with guidance set at Treasuries plus 220 bps, which was tightened from talk in the Treasuries plus 240 bps area.

A $250 million floating-rate tranche sold at par to yield Libor plus 206 bps.

The notes sold on top of guidance. Initial talk was set at the Libor equivalent to the fixed-rate tranche.

BofA Merrill Lynch, Deutsche Bank Securities Inc., JPMorgan, Lloyds Securities and Societe Generale CIB are the joint bookrunners.

The notes will be guaranteed by the company’s operating subsidiary, AmeriCredit Financial Services, Inc.

General Motors Financial, the Fort Worth-based finance subsidiary of General Motors Co., plans to use the proceeds for general corporate purposes.

BFCM prices tight

Banque Federative du Credit Mutuel sold $1 billion of 2.75% five-year senior notes (Aa3/A/A+) on Wednesday with a spread of 140 bps over Treasuries, a market source said.

Pricing was at 99.93 to yield 2.765%.

Guidance was set in the area of Treasuries plus 145 bps following initial talk in the 145 bps to 150 bps range over Treasuries.

Proceeds will be used for general corporate purposes.

Bookrunners for the Rule 144A and Regulation S deal were Citigroup, Goldman Sachs & Co. and Wells Fargo Securities LLC.

The bank is based in Strasbourg, France.

IADB new issue

Inter-American Development Bank priced $1 billion of 1.25% four-year notes (Aaa/AAA) at mid-swaps plus 12 bps on Wednesday, according to a market source.

The notes sold in line with talk.

BNP Paribas Securities Corp., JPMorgan and Nomura are the joint bookrunners.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

Jackson National upsizes

In other primary news on Wednesday, Jackson National Life Global Funding priced an upsized $750 million offering (A1/AA/AA) of funding agreement-backed notes in two tranches, a market source said.

There was $250 million of two-year floating-rate notes sold at par to yield Libor plus 58 bps and $500 million of 1.875% three-year notes priced with a 98 bps spread over Treasuries.

The fixed-rate tranche sold at a price of 99.948 to yield 1.893%.

The deal was initially intended to be a single $350 million offering of three-year notes. The two-year floaters were added prior to the deal’s launch.

The subsidiary of U.K. insurance company Prudential plc is based in Lansing, Mich.

Kimco upsizes

The session also saw Kimco Realty sell an upsized $500 million issue of 3.4% senior notes (Baa1/BBB+) due 2022 on Wednesday at 175 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.319 to yield 3.51%.

Guidance was set in the 180 bps area over Treasuries following talk set in the Treasuries plus 195 bps to 200 bps range.

The deal was upsized from $350 million.

Bookrunners are Citigroup, RBC Capital Markets LLC and Wells Fargo.

Proceeds will be used for general corporate purposes, including the pre-funding of near-term maturities and to partially reduce borrowings under the company’s revolving credit facility.

The real estate investment trust for neighborhood and community shopping centers is based in New Hyde Park, N.Y.

EDC floaters

Export Development Canada priced $500 million of floating-rate notes due 2017 on Wednesday at par to yield Libor plus 5 bps, a market source said.

Bookrunners were Barclays, Goldman Sachs & Co. and TD Securities.

The government-backed agency for exporters is based in Ottawa.

FHLB sets talk

Federal Home Loan Banks set price talk for a planned $3 billion issue of two-year global bonds in the 10 bps area over Treasuries, according to a market source and a company news release.

The bonds are slated to price on Thursday and will mature on Oct. 26, 2017.

Lead managers for the issue will be Barclays, HSBC Securities (USA) Inc. and Wells Fargo.

Morgan Stanley is the senior co-manager.

FHLBanks are 12 government-sponsored funding providers.

Bank of America firms

Bank of America’s 3.875% senior notes due 2025 firmed 5 bps to 159 bps bid, a market source said.

Bank of America sold $2.5 billion of the notes (Baa1/A-/A) on July 27 at 167 bps over Treasuries.

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

Barclays tightens

Barclays’ 5.25% notes due 2045 tightened 6 bps in secondary trading on Wednesday to 223 bps bid, a source said.

Barclays sold $1.5 billion of the bonds (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

Citigroup improves

Citigroup’s 3.3% senior notes due 2025 traded 2 bps better at 153 bps bid, a market source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

JPMorgan steady

JPMorgan Chase’s 3.9% notes due 2025 traded about 1 bp tighter at 155 bps bid, a market source said.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at 155 bps over Treasuries.

The financial services company is based in New York City.

Morgan Stanley eases

Morgan Stanley’s 4% notes due 2025 edged 1 bp wider to 163 bps bid in secondary trading on Wednesday, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

HSBC unchanged

HSBC’s 4.25% notes due 2025 headed out flat on the day at 225 bps bid, according to a market source.

HSBC sold $1.5 billion of the notes (A2/A+) on Aug. 10 at a spread of Treasuries plus 212 bps.

The banking and financial services company is based in London.

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