JPMorgan prices $10 billion; LyondellBasell, RBC, World Bank tap primary; EIB in pipeline

By Cristal Cody

Tupelo, Miss., April 15 – The high-grade primary market saw fewer deals on Wednesday, but volume remained strong with more than $21 billion of bonds priced during the session.

JPMorgan Chase & Co. sold $10 billion of fixed-to-floating-rate notes in four tranches in the largest bank deal on record, a source said.

LyondellBasell Industries NV subsidiary LYB International Finance III BV brought $2 billion of guaranteed notes in three tranches to the primary market.

Also in the finance space, Royal Bank of Canada priced $1.25 billion of three-year senior global medium-term notes.

In sovereign, supranational and agency supply on Wednesday, the International Bank for Reconstruction and Development, or World Bank, sold $8 billion of five-year sustainable development bonds.

Also, the Federal Home Loan Bank System planned to price a new Global bond due April 14, 2025.

Coming up on Thursday, the European Investment Bank is expected to price $3 billion of five-year global notes.

More than $43 billion of high-grade corporate bonds have priced week to date, in line with the $25 billion to about $50 billion of issuance expected this week.

Financial supply was anticipated following the release this week of first quarter earnings releases, market sources said.

JPMorgan Chase released its earnings report on Tuesday.

Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc. and U.S. Bancorp. released earnings reports on Wednesday.

Market tone was mostly softer on the day on continued coronavirus-related economic concerns with stocks down.

The Bank of Canada announced that it will begin to purchase Canadian dollar-denominated corporate bonds in a program similar to what the Federal Reserve has created for dollar bonds to help stem the economic damage.

The Bank of Canada will purchase up to $10 billion of BBB-rated or higher senior secured and unsecured corporate bonds with maturities of five years or less in the secondary market.

The program will last 12 months and excludes debt issued by deposit-taking institutions, “given their access to other support facilities by the Bank of Canada,” according to the news release.

High-grade credit spreads softened about 4 basis points on Wednesday.

The Markit CDX North American Investment Grade 33 index finished the day at a spread of 86.76 bps.

The iShares iBoxx Investment Grade Corporate Bond ETF closed 0.67% better at 130.78.

The PIMCO Investment Grade Corporate Bond Index ETF ended up 0.41% at 110.33.

Before JPMorgan’s offering on Wednesday, deal volume this week was led by a $9.5 billion five-part offering from Exxon Mobil Corp. on Monday.

Exxon Mobil’s notes (Aa1/AA) have tightened about 4 bps to 10 bps in the secondary market, a source said.

The company’s 2.992% notes due March 19, 2025 that were reopened on Monday are trading about 10 bps tighter.

Exxon Mobil priced a $1.25 billion add-on to the five-year notes at a spread of 140 bps over Treasuries.

The company first sold $1.5 billion of the notes on March 17 at par to yield a spread of 225 bps over Treasuries.

High-grade bonds were mixed on Wednesday with financial paper and bonds in the telecommunications sector leaking wider, a source said.

JPMorgan brings four tranches

JPMorgan Chase (A2/A-/AA-) priced $10 billion of fixed-to-floating-rate notes in four tranches in the offering, according to a market source.

A $3.5 billion tranche of 2.083% six-year fixed-to-floating-rate notes priced at a spread of Treasuries plus 175 bps, tighter than talk in the Treasuries plus 185 bps area.

The rate on the notes will reset to a floating rate of SOFR plus 185 bps after the fixed-rate period.

A $2.75 billion tranche of 2.522% 11-year notes priced at a spread of Treasuries plus 190 bps, versus talk in the 200 bps area.

The rate on the notes will reset to SOFR plus 204 bps after the fixed-rate period.

JPMorgan Chase sold $1.5 billion of 3.109% 21-year notes at a Treasuries plus 185 bps spread.

The notes were guided to print in the 195 bps spread area.

The rate on the 21-year notes will reset to a floating rate of SOFR plus 246 bps after the fixed-rate period.

Finally, $2.25 billion of notes due April 22, 2051 priced at a spread of 185 bps over Treasuries.

The 31-year notes were talked at the 200 bps over Treasuries area.

The rate on the notes will reset to SOFR plus 246 bps after the fixed-rate period.

J.P. Morgan Securities LLC was the bookrunner.

The financial services company is based in New York City.

LyondellBasell prices $2 billion

LYB International Finance III priced $2 billion of guaranteed notes (Baa1/BBB) in three tranches in its offering on Wednesday, according a market source and an FWP filing with the Securities and Exchange Commission.

The company sold $500 million of 2.875% five-year notes notes at 99.911 to yield 2.894%, or a spread of 255 basis points over Treasuries.

Initial guidance was in the Treasuries plus 265 bps area.

A $500 million tranche of 3.375% 10-year notes was sold at 99.813 to yield 3.397%. The notes priced with a spread of Treasuries plus 275 bps, compared to initial price talk in the 280 bps over Treasuries area.

Also, $1 billion of 4.2% 30-year notes priced at 99.373 to yield 4.237%, or a Treasuries plus 295 bps spread.

The tranche was talked to print in the 300 bps over Treasuries area.

BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan, Morgan Stanley & Co. LLC, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Mizuho Securities USA LLC and Wells Fargo Securities, LLC were the bookrunners.

The notes are guaranteed by parent LyondellBasell Industries, a Houston-based chemical company with executive offices in London and incorporated in the Netherlands.

Royal Bank of Canada prints

Royal Bank of Canada priced $1.25 billion of 1.6% three-year senior global medium-term notes (A2/A/AA) at 99.936 to yield 1.622% and a spread of Treasuries plus 138 bps on Wednesday, according to a market source and an FWP filing.

The notes were talked to price at the Treasuries plus 155 bps area.

RBC Capital Markets, LLC, Citigroup and Goldman Sachs & Co. LLC were the bookrunners.

The notes are bail-inable and subject to conversion into common shares of the bank or its affiliates.

Royal Bank of Canada is a Toronto-based financial services company.

World Bank raises $8 billion

World Bank priced $8 billion of 0.625% sustainable development bonds due April 22, 2025 (Aaa/AAA/AAA) on Wednesday at mid-swaps plus 24 bps, or Treasuries plus 36.5 bps, according to a market source.

The notes were launched at mid-swaps plus 24 bps, tighter than initial talk in the mid-swaps plus 28 bps area and guidance at the mid-swaps plus 25 bps area.

Barclays, BMO Capital Markets Corp., Citigroup and TD Securities (USA) LLC were the bookrunners.

The global development financing cooperative is based in Washington, D.C.

EIB eyes primary

The European Investment Bank (Aaa/AAA/AAA) plans to price $3 billion of global notes due July 25, 2025 on Thursday, according to a market source.

Initial price talk is in the mid-swaps plus 27 bps area.

BofA Securities and Citigroup are the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

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