Duke Realty sells senior notes; Bank of Ozarks prices; Wells Fargo mostly flat; CDX firms

By Cristal Cody

Eureka Springs, Ark., June 16 – Two investment-grade issuers tapped the market on Thursday, continuing a light trend of primary action expected until after the Brexit vote.

Duke Realty LP brought $375 million of 10-year senior notes to market during the session.

Bank of the Ozarks, Inc. priced $225 million of 10-year fixed-to-floating rate subordinated notes in an offering announced earlier in the week.

The Markit CDX North American Investment Grade index opened the day 2 basis points wider but improved 2 bps over the session to end at a spread of 83 bps.

In the secondary market, Wells Fargo & Co.’s 4.4% subordinated notes due 2046 traded flat to 1 bp weaker earlier in the day.

Duke Realty prices $375 million

Duke Realty (Baa2/BBB/) sold $375 million of 3.25% 10-year senior notes at a spread of 180 bps over Treasuries on Thursday, according to a FWP filing with the Securities and Exchange Commission.

The notes due June 30, 2026 priced at 99.07 to yield 3.36%.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities LLC and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds will be used to repurchase the company’s $275 million outstanding of 5.95% senior notes due 2017 through a tender offer, to redeem any notes not tendered or all of the notes if the tender offer is not completed, to repay borrowings under its revolving credit facility and for general corporate purposes.

Indianapolis-based Duke Realty owns and operates industrial and healthcare properties.

Ozarks Bank sells fixed-to-floaters

Bank of the Ozarks priced $225 million of 5.5% 10-year fixed-to-floating rate subordinated notes at par on Thursday, according to an FWP filing with the Securities and Exchange Commission.

The notes due July 1, 2026 (Kroll: BBB/Egan-Jones: A-) were sold with a spread of 393.5 bps over Treasuries.

Proceeds will be contributed to the company’s subsidiary bank to fund further growth, including growth in non-purchased loans and leases, and for general corporate purposes.

Sandler O’Neill + Partners, LP was the bookrunner.

Bank of the Ozarks is a Little Rock, Ark.-based bank holding company.

Wells Fargo flat to softer

Wells Fargo’s 4.4% notes due 2046 were quoted flat to 1 bp wider at 205 bps offered in early secondary trading on Thursday, according to a market source.

Wells Fargo sold $2 billion of the notes on June 7 at a spread of 188 bps over Treasuries.

The financial services company is based in San Francisco.

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