BP Capital Markets, Bank of Nova Scotia price notes; supply light; credit spreads ease

By Cristal Cody

Tupelo, Miss., Feb. 6 – BP Capital Markets America Inc. and Bank of Nova Scotia priced more than $3 billion of notes in the high-grade primary market on Wednesday.

BP Capital Markets America sold $2 billion of senior notes in two tranches, including a tap of its 10-year notes that were first brought to the market in November.

Bank of Nova Scotia priced $1.25 billion of five-year senior notes.

In other supply, Hydro-Quebec priced a C$500 million reopening of its 4% debentures due Feb. 15, 2055 (Aa2/AA-/DBRS: A) in the Canadian primary market on Wednesday.

Deal volume has thinned this week with more than $10 billion of investment-grade bonds priced over the first three sessions.

Market sources on average expected about $15 billion to $20 billion of high-grade supply for the week.

Most of the Asian markets are closed this week due to the Lunar New Year celebrations.

After steading tightening over the past few sessions following the Federal Reserve’s decision to leave rates unchanged, credit spreads eased on Wednesday. The Markit CDX North American Investment Grade 31 index softened about 1 basis point to head out at a spread of 65 bps.

In the secondary market, new issues priced this week have traded mostly flat to tighter than issuance, a source said.

Verizon Communications Inc.’s 3.875% notes due Feb. 8, 2029 firmed about 4 bps to the 116 bps area.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Tuesday at a spread of Treasuries plus 120 bps.

BP Capital sells $2 billion

BP Capital Markets America (A1/A-/) priced $2 billion of guaranteed senior notes on Wednesday on the tight side of guidance, according to a market source.

The company sold $1 billion of 3.41% notes due Feb. 11, 2026 at a spread of Treasuries plus 82 bps, compared to guidance in the Treasuries plus 85 bps area.

BP priced a $1 billion add-on to its 4.234% notes due Nov. 6, 2028 at a Treasuries plus 92 bps spread. Price guidance was in the Treasuries plus 95 bps area, plus or minus 3 bps.

BP Capital originally sold $1 billion of the 10-year notes on Nov. 1 at par to yield a Treasuries plus 110 bps spread. The total outstanding is now $2 billion.

BofA Merrill Lynch, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Lloyds Securities Inc. and Morgan Stanley & Co. LLC were the bookrunners.

BP Capital Markets America is a Chicago-based aviation and marine fuels provider and subsidiary of London-based oil and gas company BP plc.

Scotiabank sells $1.25 billion

Bank of Nova Scotia priced $1.25 billion of 3.4% five-year senior notes (A2/A-/AA-) at a spread of 92 bps over Treasuries, tighter than initial talk in the 105 bps spread area, according to a market source and an FWP filing with the Securities and Exchange Commission on Wednesday.

The notes priced at 99.909 To yield 3.42%.

The bookrunners were Scotia Capital (USA) Inc., Goldman Sachs & Co. LLC, BofA Merrill Lynch, Morgan Stanley, UBS Securities LLC, Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

The bank is based in Toronto.

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