U.S. Bancorp, Scotiabank, Constellation, Boston Gas, EDC tap primary; volume meets forecasts

By Cristal Cody

Tupelo, Miss., July 24 – Bank issuance remained in focus on Wednesday with deals from U.S. Bancorp, Bank of Nova Scotia and JPMorgan Chase & Co.

U.S. Bancorp priced $2.25 billion of fixed-rate notes in two tranches.

Bank of Nova Scotia sold $1.25 billion of seven-year senior notes.

JPMorgan offered a preferred stock deal during the session.

In other issuance on Wednesday, Constellation Brands, Inc. priced $800 million of 10-year senior notes.

Boston Gas Co. sold $500 million of 10-year senior notes following fixed income investor calls at the start of the week.

In addition, Export Development Canada priced C$500 million of five-year registered green bonds during the session.

Also on Wednesday, Las Vegas Sands Corp. offered three tranches of registered senior notes (Baa3/BBB-/BBB-) in an expected $3.5 billion deal.

Investment-grade supply week to date totals more than $20 billion with volume led in deal size by UnitedHealth Group Inc.’s $5.5 billion five-part offering of senior notes priced on Tuesday.

About $15 billion to $20 billion of deal volume was forecast by market sources for the week.

Bank and financial issuance has been steady since last week on the heels of earnings releases. On Tuesday, volume included Bank of America Corp.’s $1.5 billion of two-year floating-rate senior notes, BB&T Corp.’s $1 billion of five-year senior medium-term notes and Bank of Montreal’s $500 million of fixed-rate resetting non-cumulative perpetual subordinated additional Tier 1 capital notes.

In the secondary market, new issues are trading mostly tighter than issuance, a source said.

Synchrony Financial’s $750 million of 2.85% senior notes due July 25, 2022 priced Monday have firmed nearly 10 basis points. The notes were quoted trading in the 101 bps area.

Synchrony Financial priced the notes at a Treasuries plus 110 bps spread.

The Markit CDX North American Investment Grade 32 index firmed another 1 bp on Wednesday to end the day at a spread of 50 bps. The index has firmed more than 4 bps week to date.

U.S. Bancorp prices $2.25 billion

U.S. Bancorp (A1/A+/AA-) priced $2.25 billion of fixed-rate notes in two tranches on Wednesday, according to a market source.

The company sold $1.25 billion of 2.4% five-year notes on top of guidance at a spread of 60 bps over Treasuries.

A $1 billion tranche of 3% 10-year notes priced at a spread of Treasuries over 95 bps, on the tight side of guidance in the 100 bps spread area.

Goldman, Sachs & Co. LLC, Morgan Stanley & Co. LLC and U.S. Bancorp Investments, Inc. were the bookrunners.

Minneapolis-based U.S. Bancorp is a holding company and parent of U.S. Bank NA.

Scotiabank brings $1.25 billion

Bank of Nova Scotia sold $1.25 billion of 2.7% senior notes due Aug. 3, 2026 at a spread of 82 bps over Treasuries on Wednesday, according to an FWP filing with the Securities and Exchange Commission.

The bail-inable notes (A2/A-/AA-) priced at 99.74 to yield 2.741%.

Scotia Capital Inc., BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs and Morgan Stanley were the bookrunners.

The bank is based in Toronto.

Constellation Brands prices

Constellation Brands priced $800 million of 3.15% 10-year senior notes (Baa3/BBB/) on Wednesday at a spread of Treasuries plus 110 bps, according to an FWP filing with the SEC.

The notes priced at 99.957 to yield 3.155%.

BofA Securities, Goldman Sachs, J.P. Morgan Securities LLC and BBVA Securities Inc. were the bookrunners.

Constellation Brands is a Victor, N.Y.-based producer, importer and distributor of beer, wine and liquor.

Boston Gas in primary

Boston Gas sold $500 million of 3.001% 10-year senior notes (A3/A-/) on Wednesday at a spread of 95 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 115 bps to 120 bps area.

Citigroup Global Markets, HSBC Securities (USA) Inc., Morgan Stanley and RBC Capital Markets, LLC were the bookrunners of the Rule 144A and Regulation S offering.

The company held fixed income investor calls for the offering on Monday.

Boston Gas is a gas distribution company based in Waltham, Mass.

Export Development sells green bonds

Export Development Canada (Aaa/AAA) priced C$500 million of 1.65% five-year registered green bonds on Wednesday at a spread of 31.5 bps over the Government of Canada benchmark, according to an FWP filing with the SEC.

The bonds priced at 99.885 to yield 1.674%.

CIBC World Markets Inc., RBC Dominion Securities Inc. and TD Securities Inc. were the bookrunners.

Ottawa-based Export Development Canada is a Canadian government-owned export credit agency.

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