BMO sells $1.75 billion notes; Harley-Davidson taps primary; high-grade credit spreads firm

By Cristal Cody

Tupelo, Miss., Jan. 31 – Bank of Montreal and Harley-Davidson Financial Services, Inc. tapped the investment-grade primary market on Thursday.

Bank of Montreal priced $1.75 billion of five-year senior medium-term notes.

Harley-Davidson Financial Services sold $550 million of three-year senior medium-term notes.

Also during the session, the Province of Ontario priced a C$950 million add-on to its 2.65% green bonds due Feb. 5, 2025 that were first priced in January 2018. The total outstanding now for the issue registered with the Securities and Exchange Commission is C$1.95 billion.

The Markit CDX North American Investment Grade 31 index firmed another 3 basis points on Thursday to a spread of 67 bps. The index tightened about 3 bps on Wednesday after the Federal Reserve left rates unchanged following its two-day monetary policy meeting.

For the week ended Wednesday, Lipper US Fund Flows reported inflows of $34 million for corporate investment-grade funds.

High-grade deal volume slowed mid-week but is ending with more than $17 billion of corporate bond issuance week to date.

About $15 billion to $20 billion of supply was expected for the week by syndicate sources.

In the secondary market, high-grade bonds were stable during the session, according to market sources.

Fox Corp.’s 4.709% notes due 2029 priced as part of a $6.8 billion five-part offering earlier in the month were unchanged but quoted nearly 40 bps better than issuance.

Morgan Stanley’s new 4.431% global medium-term fixed-to-floating-rate senior notes due 2030 headed out flat in secondary trading. The issue is trading nearly 30 bps better than where it priced mid-month.

New bonds priced this week also have traded mostly tighter, a source said.

Crown Castle International Corp.’s $1 billion of senior notes (Baa3/BBB-/BBB) priced in two tranches on Tuesday were mixed with the 4.3% notes due 2029 last seen in trading on Wednesday in the 158 bps area.

Crown Castle sold $600 million of the 10-year notes at a spread of 165 bps over Treasuries.

A $400 million tranche of 5.2% notes due 2049 was last seen on Wednesday flat to about 1 bp wider. The notes priced with a Treasuries plus 215 bps spread.

BMO prices $1.75 billion

Bank of Montreal priced $1.75 billion of 3.3% five-year senior medium-term notes (Aa2/A-/AA-) on Thursday at 99.794 to yield 3.345%, or a spread of 92 bps over Treasuries, according to an FWP filing with the SEC.

BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., BofA Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.

The bank is based in Montreal.

Harley-Davidson prints

Harley-Davidson Financial Services sold $550 million of 4.05% senior medium-term notes due Feb. 5, 2022 (A3/BBB+/A) at a spread of 165 bps over Treasuries, according to a market source.

The notes priced on top of guidance.

J.P. Morgan Securities LLC, MUFG, U.S. Bancorp Investments, Inc. and Wells Fargo Securities LLC were the bookrunners.

The Chicago-based company is the financing arm of Harley-Davidson Inc.

Morgan Stanley flat

Morgan Stanley’s 4.431% global medium-term fixed-to-floating-rate senior notes due 2030 were steady on the day at 142 bps bid in the secondary market, a source said.

Morgan Stanley (A3/BBB+/A) sold $3 billion of the notes on Jan. 17 at par to yield a spread of Treasuries plus 170 bps.

The coupon will reset to a floating rate of Libor plus 162.8 bps from Jan. 23, 2029 to but excluding the maturity date.

Morgan Stanley is a New York-based financial products and services company.

Fox holds tight

Fox’s 4.709% notes due 2029 were flat on the day at 161 bps bid, according to a market source.

Fox (Baa2/BBB/) sold $2 billion of the 10-year notes on Jan. 15 at a Treasuries plus 200 bps spread.

The mass media company is based in New York City.

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