Financial names storm primary; Exxon Mobil tightens; MUFG firms; credit spreads improve

By Cristal Cody and Aleesia Forni

New York, March 1 – Financial issuers dominated the high-grade primary space to open the new month on Tuesday.

Issuers brought $12.5 billion of new investment-grade paper to market during the session, bringing the week’s total supply to $29.2 billion.

HSBC Holdings plc’s new $7 billion offering saw an order book that was more than 2.5 times oversubscribed, with all tranches coming in around 22.5 basis points to 25 bps from initial price thoughts.

Elsewhere in Tuesday’s primary, Manulife Financial Corp. priced $1.75 billion of notes in two parts, Citigroup Inc. priced $1.5 billion of subordinated notes around 20 bps inside initial talk.

The new deals come on the heels of the $121.01 billion of new issuance seen during the month of February, and sources are expecting another $110 billion to $115 billion of supply for March.

Exxon Mobil Corp.’s notes that priced in a $12 billion eight-tranche offering on Monday improved in secondary trading over the day Tuesday.

The company’s five-year bonds headed out 5 bps tighter than where the notes traded earlier in the day, a trader said.

In the bank and financial sector, Citigroup’s existing subordinated notes were flat.

Mitsubishi UFJ Financial Group, Inc.’s 3.85% senior notes due 2026 came in 5 bps over the session.

Credit spreads were strong at the market close. The Markit CDX North American Investment Grade index tightened 5 bps to a spread of 102 bps on Tuesday.

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