Huntington National, PSE&G, McCormick price as pace slows; Bank of America, Citigroup firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Nov. 3 – Four investment-grade borrowers entered Tuesday’s primary during an unexpectedly quiet session for the bond market.

One source called the lack of activity “surprising,” though he noted there was “nothing exact” to pinpoint during the subdued trading day, which followed a busy open to the month on Monday.

Huntington National Bank offered the largest bond during the session, selling $850 million of three-year fixed-rate notes after scrapping plans for an additional floating-rate tranche.

Smaller-sized deals from Public Service Electric & Gas Co., Arizona Public Service Co. and McCormick & Co., Inc. also priced.

All new deals entering the primary sold inside initial price thoughts, with McCormick seeing the spread on its new 10-year offering firm more than 27 basis points compared to talk.

Tuesday’s new issue activity pushes the week’s total supply to $7.4 billion.

Sources continue to expect around $30 billion of high-grade paper to price to kick off November, with one large merger and acquisition financing deal set to price sometime later during the week, a market source said.

Bank and financial paper traded mostly flat to tighter over the session.

Bank of America Corp.’s 3.875% senior notes due 2025 tightened 6 bps in the secondary market.

Citigroup Inc.’s paper traded 4 bps to 6 bps better.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 firmed 4 bps.

Goldman Sachs Group Inc.’s new paper headed out flat to tighter.

The Markit CDX North American Investment Grade 25 index firmed 2 bps on Tuesday to close at a spread of 75 bps.

Huntington National prices

Huntington National Bank priced $850 million of 2.2% three-year senior notes (A3) at Treasuries plus 115 bps on Tuesday, a market source said.

The notes sold at 99.882 to yield 2.241%.

Pricing came at the tight end of guidance set in the 120 bps area over Treasuries. Initially, the notes were talked in the Treasuries plus 135 bps area.

Bookrunners were BofA Merrill Lynch, Goldman Sachs & Co and Huntington.

Plans for a three-year floating-rate tranche were dropped prior to the deal’s launch.

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

McCormick prices tight

McCormick sold $250 million of 3.25% 10-year senior notes (A2/A-) on Tuesday at Treasuries plus 112.5 bps, according to an informed source and an FWP filing with the Securities and Exchange Commission.

The notes sold at the tight end of guidance set in the Treasuries plus 115 bps area and were talked in the area of Treasuries plus 140 bps.

Pricing was at 99.263 to yield 3.337%.

BofA Merrill Lynch, SunTrust Robison Humphrey Inc., Wells Fargo Securities LLC and BNP Paribas Securities Corp. and U.S. Bancorp Investments Inc. are the joint bookrunners.

The company plans to use the proceeds from the offering to repay the $200 million outstanding of its 5.2% notes due December 2015 and for general corporate purposes.

McCormick is a spice company based in Sparks, Md.

PSE&G new issue

Public Service Electric & Gas sold $250 million of 4.15% secured medium-term notes, series K, due Nov. 1, 2045 on Tuesday at 115 bps over Treasuries, according to a market source and an FWP filed with the SEC.

Pricing was at 99.898 to yield 4.156%.

The notes sold in line with guidance set in the 115 bps area over Treasuries and tighter than talk set in the Treasuries plus 125 bps to 130 bps range.

The bookrunners are Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC and Wells Fargo.

Proceeds will be used for general corporate purposes.

PSE&G is a Newark, N.J.-based utility.

Arizona Public prices

Arizona Public Service priced $250 million of 4.35% 30-year senior notes (A2/A-/A) at Treasuries plus 135 bps on Tuesday, according to a market source and an FWP filed with the SEC.

Pricing was at 99.866 to yield 4.358%.

The notes sold inside initial guidance set in the range of Treasuries plus 145 bps to 150 bps.

The bookrunners were BNP Paribas Securities Corp., BofA Merrill Lynch, Mizuho Securities USA Inc. and Scotia Capital (USA) Inc.

Proceeds will be used to refinance debt, to replenish cash and to refinance commercial paper borrowings temporarily used to fund capital expenditures.

Arizona Public Service is an electric utility based in Phoenix and a subsidiary of Pinnacle West Capital Corp.

Bank of America improves

Bank of America’s 3.875% senior notes due 2025 traded 6 bps tighter at 145 bps bid late afternoon on Tuesday, a market source said.

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

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

Citigroup firms

Citigroup’s 2.65% notes due 2020 tightened 4 bps to 115 bps bid in the secondary market, a source said.

Citigroup sold $2.7 billion of the notes (Baa1/A-/A) on Oct. 19 at 133 bps over Treasuries.

The company’s 4.4% subordinated notes due 2027 firmed 3 bps to 228 bps bid on Tuesday.

Citigroup sold $1.5 billion of the notes (Baa3/ BBB+/A-) in a reopening on Oct. 23 at 233 bps over Treasuries. The company originally sold $2 billion of the notes on Sept. 23 at Treasuries plus 235 bps.

The financial services company is based in New York.

JPMorgan paper better

JPMorgan Chase’s 4.25% subordinated bonds due 2027 tightened 4 bps in secondary trading to 204 bps bid, according to a market source.

JPMorgan Chase sold $2 billion of the bonds (Baa1/A-/A) on Sept. 23 at Treasuries plus 215 bps.

The financial services company is based in New York City.

Goldman flat to tighter

Goldman’s 4.25% subordinated notes due 2025 firmed 3 bps to 205 bps bid, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The company’s 4.75% bonds due 2045 (A3/A-/A) were flat on the day at 175 bps bid.

The bonds priced in a $1.75 billion tranche in the Oct. 16 offering at 192 bps over Treasuries.

The financial services company is based in New York City.

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