Bank of America, Nike price; Wells Fargo delays deal; bank, financial paper mixed; spreads firm

By Cristal Cody

Eureka Springs, Ark., Oct. 18 – Pricing action remained strong over Tuesday’s session in the investment-grade market.

Bank of America Corp. priced $5 billion of senior notes in three tranches.

Nike, Inc. sold $1.5 billion of fixed-rate notes in two tranches during the session.

Jackson National Life Insurance Co. priced $350 million of five-year notes.

In addition, Freddie Mac auctioned a $750 million add-on to its 0.875% Reference Notes due Oct. 12, 2018.

Wells Fargo & Co. postponed a planned offering of 10-year senior notes (A2/A/AA-) until Wednesday’s session following S&P’s outlook change on the company, according to a market source.

S&P announced on Tuesday that it revised its outlook on Wells Fargo to negative from stable based on increased business risks, including reputational issues from the Sept. 8 news accounts of the company’s retail accounts sales misconduct.

Wells Fargo’s existing paper was mostly unchanged on the day in the secondary market, a source said.

Bank of America’s existing notes were flat to tighter on average in secondary trading. The bank’s 4.45% subordinated notes due March 3, 2026 firmed about 3 basis points.

Kroger Co.’s new 3.875% senior notes due 2046 traded flat to 1 bp tighter.

The Markit CDX North American Investment Grade index closed about 1 bp tighter at a spread of 75 bps on Tuesday.

BofA prices $5 billion

Bank of America priced $5 billion of senior notes (Baa1/BBB+/A) in three tranches on Tuesday, according to a market source.

The bank sold $500 million of floating-rate notes due Oct. 21, 2022 at Libor plus 118 bps.

Bank of America priced $2 billion of 2.503% notes due Oct. 21, 2022 at a spread of Treasuries plus 127 bps.

The final $2.5 billion tranche of 3.248% notes due Oct. 21, 2027 priced at 150 bps over Treasuries.

The notes priced on the tight side of guidance.

BofA Merrill Lynch was the bookrunner.

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

Nike prices $1.5 billion

Nike sold $1.5 billion of fixed-rate notes (A1/AA-/) in two tranches on Tuesday, according to a market source.

The 2.375% notes due Nov. 1, 2026 priced in a $1 billion tranche at a spread of Treasuries plus 65 bps.

Nike sold $500 million of 3.375% notes due Nov. 1, 2046 at 93 bps over Treasuries.

Both tranches priced on the tight side of talk.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the bookrunners.

The notes feature a make-whole call and then a par call, according to a 424B5 filed with the Securities and Exchange Commission.

The Beaverton, Ore.-based sports footwear and apparel company plans to use the proceeds for general corporate purposes.

Jackson National Life prices

Jackson National Life Insurance priced $350 million of 2.1% five-year notes with a spread of 88 bps over Treasuries on Tuesday, according to a market source.

The notes due Oct. 25, 2021 priced on the tight side of guidance of Treasuries plus 90 bps area, plus or minus 2 bps.

BofA Merrill Lynch and Goldman Sachs & Co. were the lead managers.

The Lansing, Mich.-based investment company provides annuities and fixed-income products.

Freddie Mac sells $750 million

Freddie Mac announced in a release on Tuesday that it auctioned a $750 million add-on to its 0.875% Reference Notes due Oct. 12, 2018 at 99.9605 and a stop yield of 0.895%.

The bid-to-cover ratio for the internet-based Dutch auction was 3.59 to 1.

The firm awarded $625 million of competitive bids and $125 million of non-competitive bids.

Freddie Mac originally priced the notes on Sept. 15 in a $2.25 billion offering at 99.957 to yield 0.896%.

The total outstanding is $3 billion for the issue.

The government-backed mortgage company is based in McLean, Va.

BofA existing notes firm

Bank of America’s existing 4.45% notes due March 3, 2026 headed out about 3 bps tighter at 187 bps bid on Tuesday, according to a market source.

Bank of America sold $2 billion of the notes on Feb. 29 at a spread of 270 bps over Treasuries.

Kroger mostly flat

Kroger’s 3.875% notes due 2046 were quoted flat to 1 bp tighter early Tuesday at 149 bps offered, according to a market source.

Kroger sold $500 million of the bonds on Sept. 26 at a spread of Treasuries plus 155 bps.

The grocery retailer is based in Cincinnati.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.