Late summer supply thins; Swedish Export Credit prices $1 billion; KfW, Bank of Japan on tap

By Cristal Cody

Tupelo, Miss., Aug. 22 – Primary action in the investment-grade bond market slowed on Tuesday and is expected to stay light until after the Labor Day holiday.

Swedish Export Credit Corp. priced $1 billion of five-year notes.

In new Canadian high-grade supply, H&R Real Estate Investment Trust brought a C$125 million reopening of its 2.923% series L senior debentures due May 6, 2022 on Tuesday.

Also, Honda Canada Finance Inc. and La Caisse Centrale Desjardins du Quebec tapped the Canadian primary market, a source said. Final pricing details were not immediately available.

Looking ahead to Wednesday, KfW intends to price a benchmark sized offering of two-year senior notes that were initially talked to price in the mid-swaps minus 4 basis points area.

Also on Wednesday, the Development Bank of Japan plans to price a two-tranche benchmark sized offering of five- and 10-year senior notes. The five-year notes were initially talked to price in the mid-swaps plus 48 bps area, while the 10-year notes were talked to print in the mid-swaps plus 63 bps area.

Syndicate sources expect about $5 billion to $10 billion of supply for the week.

High-grade credit spreads improved over the session. The Markit CDX North American Investment Grade index tightened about 2 bps to close at a spread of 60 bps.

In the secondary market, bonds were mostly unchanged on the day in light trading, according to a source.

Bank and financial paper was mixed, while energy bonds traded flat to better.

Swedish Export Credit prices

Swedish Export Credit (Aa1/AA+/) priced $1 billion of the 2% five-year global medium-term notes at 99.82 to yield 2.038%, according to an FWP filing with the Securities and Exchange Commission.

Credit Agricole Corporate and Investment Bank, J.P. Morgan Securities plc, Nomura International plc and Scotiabank Europe plc were the lead managers.

Swedish Export Credit is a Stockholm-based financial services company for the Swedish export industry.

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