Citigroup prices $2 billon floaters; thin volume forecast; credit spreads ease; KeyBank firms

By Cristal Cody

Eureka Springs, Ark., Aug. 19 – Two issuers tapped the investment-grade corporate bond market over Friday’s session.

Citigroup, Inc. priced $2 billion of seven-year floating-rate notes.

United Parcel Service, Inc. priced a $34.55 million reopening of its floating-rate senior notes due March 15, 2066 at par with a coupon of Libor minus 30 basis points.

Also on Friday, Questar Gas Co. detailed a $100 million two-tranche private placement of notes.

Primary action is expected to slow for the remainder of the month.

About $5 billion of volume is forecast for the week ahead with issuance to ramp up following the Labor Day holiday, according to market sources.

The Markit CDX North American Investment Grade index closed the session 1 bp softer at a spread of 71 bps.

In the secondary market, KeyBank NA’s 1.6% senior notes due 2019 traded about 2 bps tighter earlier in the day.

Citi prices $2 billion

Citigroup priced $2 billion of seven-year floating-rate notes at 99.684 with a coupon of Libor plus 148 bps on Friday, according to a market source.

The notes (Baa1/BBB+/A) are non-callable for six years.

Citigroup Global Markets Inc. was the bookrunner.

Citigroup is a financial services company based in New York.

Questar Gas sells notes

Questar Gas (A2/A/) sold $100 million of notes in two tranches in a private placement offering, according to a company spokesman and an 8-K filing with the Securities and Exchange Commission on Friday.

The company priced $50 million of 3.63% 30-year notes and $50 million of 3.67% 35-year notes.

J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and MUFG were the bookrunners.

Questar Gas said it entered into a commitment to borrow $100 million of long-term debt in the private placement market to be funded on Dec. 15.

Proceeds from the offering will be used to repay existing debt and for general corporate purposes.

Questar Gas is a natural gas distributor based in Salt Lake City, Utah.

KeyBank firms

KeyBank’s 1.6% senior notes due 2019 traded better at 68 bps offered early Friday, according to a market source.

The notes were seen on Thursday at 72 bps bid, 70 bps offered.

KeyBank priced $500 million of the notes (A3/A-/A-) on Wednesday at a spread of Treasuries plus 75 bps.

The regional bank is based in Cleveland, Ohio.

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