Deutsche Bank, Oneok, Enbridge price bonds; deal pipeline builds; Deutsche paper mixed

By Cristal Cody

Tupelo, Miss., July 10 – Several investment-grade bond issuers tapped the primary market, while the week’s deal pipeline is building, according to market sources on Monday.

Deutsche Bank AG, New York Branch sold $2.25 billion of three-year notes in fixed- and floating-rate tranches.

The bonds traded flat to about 2 basis points tighter in the secondary market.

Santander Holdings USA, Inc. priced $1.24 billion of new and reopened senior notes.

Oneok Inc. sold $1.2 billion of guaranteed senior notes in two parts.

Enbridge Inc. sold $1 billion of split-rated 60-year fixed-to-floating rate subordinated notes.

ORIX Corp. also offered dollar-denominated senior notes during the session.

Several deals are in the pipeline for the week, a market source said.

About $15 billion to $20 billion of bond volume is expected by market participants for the week.

The Canadian high-grade bond market saw two bank deals in the previous U.S. holiday week, a market source said.

Bank of Montreal and Canadian Imperial Bank of Commerce each priced five-year deposit notes. Additional deal details were not immediately available.

The Canadian market is expected to see a handful of new deals in the primary market this week.

“We think it will pick up,” the source said.

The Markit CDX North American Investment Grade index closed mostly flat to modestly softer at a spread of 62 bps.

Deutsche prices $2.25 billion

Deutsche Bank, New York Branch sold $2.25 billion of three-year notes (Baa2/A-) in two tranches on Monday, according to a market source.

The company priced $750 million of three-year floating-rate notes at par to yield Libor plus 97 bps.

The notes had a $1.3 billion final book size.

Deutsche Bank sold $1.5 billion of 2.7% three-year fixed-rate notes at 99.863 to yield 2.748%, or a spread of 118 bps over Treasuries. The fixed-rate notes had a $2.6 billion book size.

Deutsche Bank Securities Inc. was the bookrunner.

In the secondary market, the floating-rate notes traded flat at 97 bps bid, while the fixed-rate notes tightened to 116 bps bid, 114 bps offered.

The New York-based banking services company is a subsidiary of Deutsche Bank AG.

Santander sells notes

Santander Holdings USA priced $1.24 billion of new and reopened senior notes (Baa3/BBB+) on Monday in a Rule 144A and Regulation S offering, according to a market source and a press release.

The company priced a $440 million tap of its 3.7% senior notes due March 28, 2022 with a spread of Treasuries plus 155 bps, on the tight side of talk in the Treasuries plus 160 bps area, plus or minus 5 bps.

Santander originally sold $1 billion of the notes on March 22 at a Treasuries plus 180 bps spread. The total outstanding now is $1.44 billion.

The $800 million tranche of 4.4% 10-year notes priced with a spread of 205 bps over Treasuries. The notes were talked to price in the Treasuries plus 210 bps area, plus or minus 5 bps.

Barclays, Citigroup Global Markets Inc., Santander Investment Securities Inc. and RBC Capital Markets, LLC were the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

Boston-based Santander Holdings USA is the U.S. holding company for banking group Banco Santander, SA.

Oneok places $1.2 billion

Oneok sold $1.2 billion of guaranteed fixed-rate senior notes (Baa3/BBB) in two tranches on Monday, according to a news release and an FWP filing with the Securities and Exchange Commission.

The company priced $500 million of 4% 10-year notes at 99.845 to yield 4.019% and a spread of Treasuries plus 165 bps.

The $700 million tranche of 4.95% 30-year notes was sold at 98.753 to yield 5.031%, or a Treasuries plus 210 bps spread.

Citigroup Global Markets, Barclays, BofA Merrill Lynch, Mizuho Securities USA Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG, PNC Capital Markets LLC, SMBC Nikko Securities America, Inc., TD Securities (USA) LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC were the bookrunners.

The securities are guaranteed by Oneok Partners LP and Oneok Partners Intermediate LP.

Proceeds will be used for general corporate purposes, including debt repayment and capital expenditures.

Oneok is a natural gas company based in Tulsa, Okla.

Enbridge brings 60-year bonds

Enbridge sold $1 billion of split-rated 5.5% fixed-to-floating rate subordinated notes due July 15, 2077 on Monday at par, according to an FWP filing with the SEC.

The series 2017-A notes (Ba1/BBB-/BBB-) convert to a floating rate on July 15, 2027 and on every interest reset date until July 15, 2047 at Libor plus 341.8 bps and on July 15, 2047 and on every interest reset date until the final maturity at Libor plus 416.8 bps.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets, Credit Suisse Securities (USA) and HSBC Securities (USA) Inc. were the bookrunners.

The notes will be converted automatically into series 2017-A preference shares upon an automatic conversion event, which occurs if the company files for bankruptcy.

Enbridge plans to use the proceeds from the deal for capital projects, to reduce debt and for other general corporate purposes.

The oil and gas distribution and transportation company is based in Calgary, Alta.

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