Three financials price bonds; up to $30 billion expected for coming week; HSBC, banks firm

By Andrea Heisinger and Cristal Cody

New York, March 2 - Bank of America Corp., HSBC USA Inc. and Fifth Third Bancorp each sold bonds on an unusually active Friday in the high-grade bond market.

Bank of America did a quick sale of $600 million of five-year floating-rate notes.

There was a reopening of three-year notes from HSBC to add an upsized $750 million.

Cincinnati-based Fifth Third sold $500 million of 10-year paper.

Issuers sold more than $23 billion of bonds in the high-grade market during the week. The coming week is looking similar, sources said.

"We're seeing about $20 [billion]," one syndicate source said.

The last two days showed a strong start to the month of March, which many are hoping hits a certain dollar amount.

"We're hoping for a big March reaching the barrier of $100 [billion]," a market source said.

The same month in 2011 saw roughly $98 billion of deals, the source added.

"Things aren't calming down anytime soon," the market source said, adding that there are several calls with potential issuers lined up for the coming week.

"Things are stable lately."

While the $100 billion mark for March doesn't seem out of the realm of possibility, another syndicate desk deemed it "bullish" and said they were looking at between $80 billion and $85 billion for the month's issuance, excluding emerging markets deals.

"We weren't bullish for February, but I think everyone kind of revised up after the month we had," a source from that desk said.

The source was also predicting a larger pot of new deals for the coming week - between $25 billion and $30 billion, but closer to the latter number.

Bonds traded mostly unchanged in the secondary market on Friday, sources said. The Markit CDX Series 17 North American Investment Grade index eased 1 basis point to a spread of 94 bps.

"There was a little bit of activity this morning, but it's totally dead this afternoon," a trader said. "There's really not a lot going on."

HSBC's notes firmed 5 bps in trading, and the new issue from Fifth Third traded 2 bps tighter.

Wells Fargo & Co.'s paper that priced Thursday firmed 3 bps on Friday, and Credit Suisse Group AG's covered bonds that sold Thursday stayed active in Friday's session.

In other trading, Canadian bank paper was mostly flat. National Bank of Canada's 2.2% covered bonds due 2016 ended unchanged, while Toronto-Dominion Bank's 2.375% medium-term notes due 2016 firmed 1 bp.

Treasuries closed higher on Friday with yields down across the curve. The 10-year note yield fell 6 bps to 1.97%. The 30-year bond yield dropped 5 bps to 3.1%.

HSBC reopens three-years

HSBC USA reopened its issue of 2.375% senior notes due 2015 to add an upsized $750 million, an informed source said.

The size of the reopening was increased from $500 million.

The notes (A1/A+/AA) were priced at Treasuries plus 155 bps. This was at a tighter level than talk in the 160 bps area.

Total issuance is $2.25 billion including $1.5 billion priced at 210 bps over Treasuries on Feb. 8.

HSBC Securities (USA) Inc. was the bookrunner.

In the secondary market, the notes tightened to 150 bps bid, a trader said.

The U.S. subsidiary of England's HSBC Holdings plc is based in New York.

BofA's floaters

Bank of America sold $600 million of five-year floating-rate notes (Baa1/A/) at par to yield Libor plus 285 bps, a source away from the trade said.

Bank of America Merrill Lynch was the bookrunner.

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

Fifth Third's $500 million

Fifth Third Bancorp priced $500 million of 3.5% 10-year senior notes (Baa1/BBB/A-) to yield Treasuries plus 160 bps, an informed source said.

Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds are being used for general corporate purposes.

Fifth Third was last in the high-grade market on Jan. 20, 2011. It priced $1 billion of 3.625% five-year notes at 160 bps over Treasuries to help pay back money borrowed under the Troubled Asset Relief Program.

In the secondary market, the new notes due 2022 traded tighter at 158 bps bid, 155 bps offered, according to a source.

The financial services company is based in Cincinnati.

Wells Fargo firmer

Wells Fargo's 3.5% senior holding company notes due 2022 traded tighter at 147 bps bid, 145 bps offered on Friday, a trader said.

Wells Fargo sold $2.5 billion of the 10-year notes (A2/A+/AA-) at 150 bps over Treasuries.

The financial services company is based in San Francisco.

Credit Suisse trades

Credit Suisse Group's 1.625% three-year covered bonds traded at 124 bps bid, 120 bps offered over Treasuries on Friday, a trader said.

Credit Suisse Group sold $2 billion of the bonds (Aaa/AAA/) on Thursday at a spread of mid-swaps plus 105 bps.

The financial services company is based in Zurich.

National Bank of Canada flat

National Bank of Canada's 2.2% notes due 2016 (Aaa/AAA/) were seen flat on the day at 51 bps over Treasuries, a source said on Friday.

The notes are trading tighter since National Bank of Canada reopened the issue in a $600 million offering on Feb. 6 at a spread of 67 bps over Treasuries.

The financial services company is based in Montreal.

Toronto-Dominion Bank tighter

Toronto-Dominion Bank's 2.375% senior notes due 2016 (Aaa/AA-/) firmed 1 bp to 80 bps on Friday, a source said.

TD reopened the issue on Nov. 3 and sold $600 million of the notes at 117 bps plus Treasuries.

The bank and financial services company is based in Toronto.

© 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.