GM Financial, Toyota Motor Credit, KfW price bonds; IFC on deck; AIG, CBS firm in secondary

By Aleesia Forni

Virginia Beach, July 8 – Two auto financials braved volatile market conditions to bring new deals to the investment-grade primary market on Wednesday.

General Motors Financial Co. Inc. sold a $2.3 billion offering of notes in two parts at the tight end of talk after scrapping plans for a five-year floating-rate tranche.

Meantime, Toyota Motor Credit Corp. sold $2.25 billion of notes in three tranches due 2018 and 2022, attracting an order book that was more than 2.5 times oversubscribed.

The session also hosted Germany’s KfW, which sold $6 billion of global notes due 2018.

International Finance Corp. joined the forward calendar on Wednesday, announcing talk for a planned benchmark five-year bond.

Spreads in the secondary market were again wider overall on the day.

The Markit CDX North American Investment Grade series 23 index eased 2 basis points to 73 bps during the session.

Recently priced deals from American International Group Inc. and CBS Corp. were trading 1 bp to 4 bps tighter in the secondary market.

KfW prices tight

KfW priced $6 billion of notes (Aaa/AAA/) due Aug. 6, 2018 at mid-swaps plus 1 bps on Wednesday, at the tight end of talk set in the area of mid-swaps plus 2 bps, a market source said.

BofA Merrill Lynch, HSBC Securities and Morgan Stanley & Co. LLC were the bookrunners.

The German government-owned development bank is based in Frankfurt.

GM brings $2.3 billion

General Motors Financial priced $2.3 billion of senior notes (Ba1/BBB-/BBB-) on Wednesday in tranches due 2020 and 2025, according to a market source.

The company priced $1.5 billion of 3.2% five-year notes with a spread of Treasuries plus 170 bps.

Pricing was at 99.972 to yield 3.206%.

Also priced was $800 million of 4.3% 10-year notes at 99.863 to yield 4.317%, or Treasuries plus 210 bps.

Both tranches sold at the tight end of guidance.

The bookrunners are Barclays, BNP Paribas Securities Corp., Commerzbank, Mizuho Securities and Morgan Stanley.

The Fort Worth-based finance subsidiary of General Motors Co. plans to use the proceeds for general corporate purposes.

TMCC offering

Toyota Motor Credit priced a $2.25 billion offering of senior notes (Aa3/AA-) in three parts on Wednesday, according to an informed source and filings with the Securities and Exchange Commission.

A $1.25 billion tranche of 1.55% three-year notes priced at 99.915 to yield 1.579%, or Treasuries plus 70 bps.

Pricing was at the tight end of guidance set in the range of Treasuries plus 70 bps to 75 bps, which had tightened from the Treasuries plus 80 bps area.

A $500 million floating-rate note due 2018 sold at par to yield Libor plus 46 bps.

The notes were talked at the Libor equivalent to the three-year fixed-rate notes.

There was also $500 million of 2.8% seven-year notes that priced at 99.754 to yield 2.839%, or Treasuries plus 93 bps.

The notes sold at the tight end of the Treasuries plus 95 bps area guidance. Initial talk was set in the Treasuries plus low-100 bps area.

BofA Merrill Lynch, BNP Paribas Securities, HSBC Securities and J.P. Morgan Securities LLC are the bookrunners.

The Torrance, Calif.-based funding arm of auto manufacturer Toyota plans to use the proceeds for general corporate purposes.

IFC sets talk

International Finance set price talk on Wednesday for a benchmark five-year bond offering (Aaa/AAA/) in the area of mid-swaps plus 4 bps, a market source said.

The deal is slated to price on Thursday.

Citigroup Global Markets Inc., Credit Suisse Securities, Goldman Sachs & Co and TD Securities are the banks on the deal.

The World Bank member and lender to the private sector in developing countries is based in Washington, D.C.

AIG notes firm

Tranches of AIG’s new $2.5 billion offering of senior notes (Baa1/A-/BBB+), which sold in three parts on Tuesday, were quoted tighter compared to their new issue spreads.

The New York City-based insurance company’s $1.25 billion of 3.75% 10-year notes was 1 bp tighter at 154 bps bid, 153 bps offered, according to a market source.

The notes priced at Treasuries plus 155 bps.

Its $500 million of 4.7% 20-year bonds, which sold with a spread of Treasuries plus 170 bps, was 3 bps better at 167 bps bid, 164 bps offered.

The $750 million of 4.8% 30-year notes firmed 1 bp to 179 bps bid, 176 bps offered. The notes sold at Treasuries plus 180 bps.

CBS tighter

In other trading on Wednesday, CBS Corp.’s $800 million of 4% 10-year notes traded 4 bps better at 196 bps bid, 192 bps offered, a market source said.

The New York City-based broadcasting company sold the offering with a spread of 200 bps over Treasuries.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices were higher on Wednesday, according to a market source.

Bank of America Corp.’s CDS costs rose 2 bp to 73 bps bid, 77 bps offered. Citigroup Inc.’s CDS costs were 1 bp higher 84 bps bid, 88 bps offered. JPMorgan Chase & Co.’s CDS costs were also flat at 70 bps bid, 74 bps offered. Wells Fargo & Co.’s CDS costs increased 1 bp to 53 bps bid, 57 bps offered.

Merrill Lynch’s CDS costs were 2 bps higher at 77 bps bid, 80 bps offered. Morgan Stanley’s CDS costs ended flat at 83 bps bid, 87 bps offered. Goldman Sachs Group, Inc.’s CDS costs were up 1 bp at 92 bps bid, 95 bps offered.

Paul Deckelman contributed to this review.

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