Wells Fargo, European Stability Mechanism, TD Bank price; Nuveen eyes deal; Walmart firms

By Cristal Cody

Tupelo, Miss., Oct. 16 – High-grade supply slowed on Tuesday as stocks rallied and focus turned to third quarter earnings results from issuers including Goldman Sachs Group Inc. and Morgan Stanley.

Wells Fargo Bank NA tapped the primary market with a $3.25 billion two-part offering of notes.

In other issuance, the European Stability Mechanism sold $3 billion of two-year notes tighter than guidance.

Also in SSA supply, Toronto-Dominion Bank priced $2 billion of three-year notes on Tuesday.

More than $8 billion of investment-grade bonds were sold on Monday, with the bulk from Conagra Brands, Inc.’s $7.03 billion seven-part offering of senior notes.

Bank supply is expected this week on the heels of earnings releases, according to market sources.

Syndicate sources predict about $25 billion to $35 billion of deal volume, with about half projected as new bank paper, this week.

Elsewhere on Tuesday, Nuveen, LLC (Aa2/BBB+/AA+) held fixed-income investor calls for a Rule 144A and Regulation S offering of guaranteed senior notes, according to market sources.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

The deal size is targeted at $1 billion, according to news releases from Moody’s Investor Service and Fitch Ratings.

Parent company Teachers Insurance and Annuity Association of America will guarantee the notes.

In other activity on Tuesday, Walmart Inc. lowered its earnings guidance for 2019 as the company digests a $16 billion acquisition of Flipkart Private Ltd.

The retailer’s senior notes (Aa2/AA/AA) priced as part of a $16 billion nine-part deal in June to fund the merger headed out about 4 basis points tighter from Monday’s levels and remain better than issuance.

Walmart will release its third quarter earnings results on Nov. 15.

Bank and financial paper was mixed in the secondary market, a source said.

The Markit CDX North American Investment Grade 31 index firmed more than 1 bp over the day to a spread of 64 bps.

Wells sells $3.25 billion

Wells Fargo Bank sold $3.25 billion of senior bank notes (Aa2/AA-/AA-) in two tranches on Tuesday, according to a market source.

The bank priced $1 billion of three-year floating-rate notes at Libor plus 51 bps.

A $2.25 billion tranche of 3.625% three-year notes priced at a Treasuries plus 68 bps spread.

Wells Fargo Securities was the bookrunner.

The bank is a subsidiary of San Francisco-based Wells Fargo & Co.

European Stability prices

The European Stability Mechanism (Aa1//AAA) priced $3 billion of 3% two-year senior notes at mid-swaps flat, or a Treasuries plus 20.1 bps spread, according to a market source.

The notes due Oct. 23, 2020 were initially talked to price with a spread in the mid-swaps plus 1 bp area.

BofA Merrill Lynch, Barclays and Citigroup Global Markets Ltd. were the bookrunners for the Rule 144A and Regulation S transaction.

The European Stability Mechanism is a Luxembourg-based intergovernmental organization that provides financial assistance to member states.

TD Bank prints $2 billion

Toronto-Dominion Bank (Aa1/AA-/AA-) placed $2 billion of 3.35% three-year notes at a spread of mid-swaps plus 25 bps, or Treasuries plus 42.55 bps, according to a market source.

The notes were initially talked to price in the mid-swaps plus 27 bps area.

TD Securities LLC, J.P. Morgan Securities, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities were the bookrunners.

The bank and financial services company is based in Toronto.

Walmart improves

In the secondary market, Walmart’s 3.4% notes due June 26, 2023 firmed about 4 bps to 35 bps bid on Monday, according to a market source.

The $2.75 billion of notes have tightened considerably since the tranche priced on June 20 at a Treasuries plus 60 bps spread.

Walmart’s $2.75 billion of 3.7% notes due June 26, 2028 improved about 4 bps during the session to 65 bps bid.

The notes were priced in the June offering with a Treasuries plus 80 bps spread.

The discount retailer is based in Bentonville, Ark.

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