CIBC prices $1.5 billion notes; steady supply forecast; Coach tightens, Citibank firms

By Cristal Cody

Tupelo, Miss., June 9 – Canadian Imperial Bank of Commerce tapped the primary market on Friday with a $1.5 billion dollar offering of five-year senior notes in fixed- and floating-rate tranches.

Deal action in the high-grade market is expected to pick up in the week ahead after issuance slowed midweek with market attention focused on various events that included former FBI director James Comey’s Senate testimony and the United Kingdom’s general election on Thursday, a source said. Syndicate sources forecast about $20 billion to $25 billion of supply in the upcoming week.

In the secondary market, new bonds priced over the week traded mostly better on Friday.

HCA Inc.’s $1.5 billion split-rated offering of 5½% 30-year senior secured notes (Ba1/BBB-/BB+) sold at par on Thursday traded at 102½ bid late Friday morning and moved higher later in the day to 103 bid, a high-yield bond trader said.

Investment-grade accounts and high yield accounts each took about half of the book. There appears to be some conviction the company eventually will have straight investment-grade ratings, the trader said.

Coach, Inc.’s $1 billion of senior notes (Baa2/BBB-/BBB) priced in two tranches on Tuesday to help fund its acquisition of Kate Spade & Co. tightened about 6 basis points to 7 bps in secondary trading.

Citibank, NA’s $2.5 billion of three-year bank notes (A1/A+/) brought to the primary market on Tuesday firmed about 4 bps to 6 bps.

The Markit CDX North American Investment Grade index was about 1 bp tighter on the day at a spread of 60 bps.

CIBC prices $1.5 billion

CIBC priced $1.5 billion of five-year senior notes (A1/A+/AA-) in two tranches on Friday, according to an FWP filing with the Securities and Exchange Commission.

The bank sold $1 billion of 2.55% fixed-rate notes at 99.907 to yield 2.57% and a spread of 80 bps over Treasuries.

The $500 million tranche of five-year floating-rate notes priced at par to yield Libor plus 72 bps.

CIBC World Markets Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., BofA Merrill Lynch and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be added to the bank’s funds and used for general corporate purposes.

The diversified financial institution is based in Toronto.

Coach new, existing bonds firm

Coach’s 3% notes due July 15, 2022 traded on Friday at 134 bps bid, 131 bps offered, a market source said.

The company priced $400 million of 3% five-year notes on Tuesday at a spread of 140 bps over Treasuries.

Coach’s $600 million tranche of 4.125% notes due July 15, 2027, priced on Tuesday at a Treasuries plus 200 bps spread, firmed to 194 bps bid, 191 bps offered in the secondary market.

If the acquisition of Kate Spade has not closed by Feb. 7, 2018, the notes have a special mandatory redemption at 101.

Coach’s existing 4.25% senior notes due 2025 firmed about 1 bp on Friday to 162 bps bid, another market source said.

Coach sold $600 million of the notes on Feb. 23, 2015 at Treasuries plus 225 bps.

Coach is a New York City-based designer of luxury goods.

Citibank new paper tightens

Citibank’s 2.1% notes due June 12, 2020 tightened to 66 bps bid, 64 bps offered, a market source said on Friday.

Citibank priced $2 billion of the notes on Tuesday at a spread of Treasuries plus 70 bps.

The company’s existing 2% notes due March 20, 2019 softened about 4 bps to trade at 54 bps bid.

Citibank sold $1.5 billion of the notes on March 13 at a spread of Treasuries plus 67 bps.

Citibank is a Sioux Falls, S.D.-based commercial and consumer banking products and services company.

Paul A. Harris contributed to this review

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