Santander, Santander Group price; issues firm in secondary market; strong supply eyed

By Cristal Cody

Tupelo, Miss., Oct. 27 – Deal action in the high-grade bond market continued on Friday with transactions from Santander UK plc and Santander UK Group Holdings plc.

Santander UK brought $1.5 billion of three-year senior notes in two tranches to the primary market.

Santander UK Group Holdings sold $1 billion of 11-year fixed-to-floating rate notes.

Primary action is expected to be strong in the upcoming week with market sources forecasting about $25 billion to $30 billion of supply.

In the secondary market on Friday, the Santander issues traded about 1 basis point to 4 bps tighter.

The Markit CDX North American Investment Grade 29 index firmed more than 1 bp to end at a spread of 53 bps.

Santander sells two tranches

Santander UK priced $1.5 billion of three-year senior notes (Aa3/A/A) in two tranches on Friday, according to a market source.

The $300 million tranche of three-year floating-rate notes priced at Libor plus 30 bps.

Santander UK sold $1.2 billion of 2.125% notes due Nov. 3, 2020 at a spread of Treasuries plus 52 bps.

BofA Merrill Lynch, Goldman Sachs & Co., Nomura, Santander Investment Securities Inc. and UBS Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

In aftermarket trading, the floating-rate notes were seen tighter at Libor plus 29 bps bid, a source said.

The fixed-rate notes tightened to 48 bps bid.

The financial services company is based in London.

Santander Group prices

Santander UK Group Holdings sold $1 billion of 3.823% 11-year fixed-to-floating rate notes (Baa1/BBB/A) at a spread of Treasuries plus 140 bps on Friday, according to a market source.

The notes tightened from initial price talk in the Treasuries plus 155 bps area.

Interest will accrue at a fixed rate for the first 10 years and at a rate based on Libor after November 2027.

BofA Merrill Lynch, Goldman Sachs, Nomura, Santander Investment Securities and UBS Securities were the bookrunners.

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

Santander’s 3.823% notes due 2028 tightened to 137 bps bid in the secondary market, a source said.

The provider of banking and financial products and services is based in London.

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