KfW, Sumitomo Mitsui Trust tap primary market; credit spreads unchanged; Deutsche Bank firms

By Cristal Cody

Eureka Springs, Ark., Oct. 12 – High-grade primary action slowed on Wednesday with two issuers pricing bonds.

KfW brought $5 billion of three-year dollar-denominated notes.

Also, Sumitomo Mitsui Trust Bank Ltd. priced $1 billion of three-year notes in fixed- and floating-rate tranches.

The Markit CDX North American Investment Grade index closed the day mostly unchanged at a spread of 76 basis points.

In the secondary market, Deutsche Bank AG’s 4.25% notes due 2021 priced on Friday and reopened on Tuesday traded more than 15 bps better earlier on Wednesday.

KfW sells $5 billion

KfW (Aaa/AAA/AAA) sold $5 billion of 1.25% three-year global dollar-denominated notes on Wednesday at 99.859 and a spread of mid-swaps plus 13 bps, or Treasuries plus 26.35 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes were talked to price in the mid-swaps plus 15 bps area.

Barclays, BofA Merrill Lynch and Citigroup Global Markets Inc. were the bookrunners.

The notes are guaranteed by the Federal Republic of Germany.

KfW is a government-backed bank based in Frankfurt.

Sumitomo Mitsui prices

Sumitomo Mitsui Trust Bank priced $1 billion of three-year notes in two tranches on Wednesday, according to a market source.

The company sold $500 million of floating-rate notes due Oct. 18, 2019 at Libor plus 91 bps and $500 million of 2.05% three-year fixed-rate notes at a spread of 105 bps over Treasuries.

Citigroup, Daiwa Capital Markets Europe Ltd., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the bookrunners.

The banking and financial company is based in Tokyo.

Deutsche Bank tightens

Deutsche Bank’s 4.25% notes due 2021 traded at 273 bps offered earlier in the secondary market, a source said.

Deutsche Bank priced $3 billion of the five-year notes on Friday at a spread of Treasuries plus 300 bps and reopened the issue on Tuesday to sell a $1.5 billion add-on at Treasuries plus 290 bps.

Deutsche Bank is a banking and financial services company based in Frankfurt.

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