High-grade supply thins; Barclays, Fresenius, Ontario, National Bank price; inflows increase

By Cristal Cody

Tupelo, Miss., June 13 – High-grade primary action slowed on Thursday after a week of strong issuance that beat market forecasts.

Barclays plc priced $1.5 billion of split-rated fixed-to-floating-rate subordinated notes due 2030.

Fresenius Medical US Finance III Inc. came by with $500 million of 10-year senior notes.

The Province of Ontario brought $1.75 billion of seven-year registered global notes to the primary market on top of guidance.

National Bank of Canada sold $1 billion of three-year covered bonds.

Week to date, high-grade corporate deal volume totals more than $28 billion and includes about $6 billion of supply on Wednesday, more than $4 billion of issuance on Tuesday and over $17 billion of volume on Monday.

Sovereign, supranational and agency supply totals nearly $10 billion week to date.

About $20 billion to $25 billion of issuance was expected by syndicate sources for the week.

Deal volume has been led by Fiserv, Inc.’s $9 billion four-part offering of senior notes that priced Monday.

Inflows improved in corporate investment-grade funds to $4.02 billion for the week ended Wednesday from $924 million in the previous week, Lipper US Fund Flows said on Thursday.

The Markit CDX North American Investment Grade 32 index firmed more than 1 basis point to close at a spread of 60 bps.

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

Vodafone Group plc’s $2.25 billion of notes (Baa2/BBB+/BBB+) priced in two tranches on Wednesday to fund cash tender offers were mixed but mostly unchanged from issuance, the source said.

The London-based telecommunications company’s 4.875% notes due June 19, 2049 edged about 0.5 bp tighter in secondary trading. Vodafone sold $1.75 billion of the notes at a spread of 237.5 bps over Treasuries. Price guidance was in the Treasuries plus 240 bps area, compared to initial talk at Treasuries plus 255 bps area.

Vodafone’s $500 million tranche of 5.125% notes due June 19, 2059 softened about 1 bp in the secondary market. The notes priced at a Treasuries plus 260 bps spread. Guidance was at Treasuries plus 260 bps, while the notes were initially talked to print in the Treasuries plus 275 bps area.

Barclays prices $1.5 billion

Barclays priced $1.5 billion of 5.088% fixed-to-floating-rate subordinated notes due June 20, 2030 at par on Thursday to yield a spread of 300 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes (Ba1/BB+/A-) will convert Sept. 20, 2029 to a floating rate of Libor plus 305.4 bps.

Barclays was the bookrunner.

The financial services company is based in London.

Fresenius Medical sells $500 million

Fresenius Medical US Finance III priced $500 million of 3.75% 10-year senior notes (Baa3/BBB/BBB-) on the tight side of guidance Thursday at a spread of 185 bps over Treasuries, according to a market source.

Price guidance was in the Treasuries plus 190 bps area.

BofA Securities, Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the bookrunners.

Fresenius Medical US Finance is a financing arm of Bad Homburg, Germany-based Fresenius Medical Care AG & Co., a kidney dialysis company.

Ontario prices $1.75 billion

Ontario (Aa3/A+/AA-) priced $1.75 billion of 2.3% seven-year global notes on Thursday at mid-swaps plus 40 bps, or a Treasuries plus 35.4 bps spread, according to an FWP filing with the SEC.

The notes due June 15, 2026 priced at 99.84 to yield 2.325%.

Initial price talk was in the mid-swaps plus 40 bps area.

BofA Securities, HSBC Securities (USA) Inc., RBC Capital Markets, LLC and Scotia Capital (USA) Inc. were the bookrunners.

National Bank prices $1 billion

National Bank of Canada priced $1 billion of 2.05% three-year covered bonds (Aaa//AAA/DBRS: AAA) on Thursday at mid-swaps plus 30 bps, or a spread of 32.1 bps over Treasuries, according to a market source.

The notes were initially talked to price in the mid-swaps plus 32 bps area.

Bookrunners included BNP Paribas Securities Corp., National Bank Financial Inc., RBC Capital Markets and UBS Securities LLC.

The financial group is based in Montreal.

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