Credit Suisse brings $3 billion fixed, floating notes; Wells prices $2 billion; AT&T busy

By Sheri Kasprzak and Stephanie N. Rotondo

New York, April 24 – New-issue action was more subdued Friday, but a couple of good-sized deals hit the market.

Credit Suisse AG priced $3 billion of fixed- and floating-rate notes, the company said in a term sheet.

The sole bookrunner was Credit Suisse Securities (USA) LLC.

The offering included $2.75 billion of fixed-rate notes and $250 million of floating-rate notes, both of which are due April 27, 2018.

The fixed-rate notes bear interest at 1.7% priced at 99.89.

The floating-rate notes bear interest at three-month Libor plus 68 basis points.

Proceeds will be used for general corporate purposes.

Elsewhere, Wells Fargo & Co. priced $2 billion of fixed-rate notes, according to a pricing supplement filed with the Securities and Exchange Commission.

The 3.9% notes are due May 1, 2045 and are priced at 98.791 with a spread of Treasuries plus 130 bps. The benchmark yield is 2.691% with a reoffer yield of 3.919%.

At the close, a trader placed the issue at 133 bps bid, 130 bps offered.

The sole bookrunner was Wells Fargo Securities LLC.

Aside from the new issues – including AT&T Inc.’s monster deal from Thursday – a trader said the market was “pretty quiet,” adding that a “Treasury rally is not helping.”

Treasuries were up after data on durable goods orders in March indicated that there was continued weakness in business investment spending.

The Markit CDX North American Investment Grade series 23 index was steady at a spread of 61 bps.

AT&T in focus

Additional details emerged Friday morning on AT&T’s massive $17.5 billion global notes offering – the third-largest investment-grade offering of all time.

The notes (Baa1/BBB+/A-) included $3 billion of five-year notes at Treasuries plus 110 bps, $750 million of five-year floating-rate notes, $2.75 billion of seven-year notes at Treasuries plus 130 bps, $5 billion of 10-year notes at Treasuries plus 150 bps, $2.5 billion of 20-year notes at Treasuries plus 190 bps and $3.5 billion of 31-year notes at Treasuries plus 215 bps.

The 2020 fixed-rate notes are callable on May 30, 2020 at Treasuries plus 17.5 bps. The 2022 notes are callable on April 30, 2020 at Treasuries plus 20 bps, and the 2025 bonds are callable on Feb. 15, 2025 at Treasuries plus 25 bps. The 2035 bonds are callable on Nov. 15, 2034 at Treasuries plus 30 bps, and the 2046 bonds are callable on Nov. 15, 2045 at Treasuries plus 35 bps.

A trader said the new notes were in focus in early Friday trading, with the five-year paper making up most of the action.

As for the other issues, the trader quoted the 10-year notes at 142 bps bid, 139 bps offered. The 20-year paper was pegged at 185 bps bid, 182 bps offered, while the 30-years were at 205 bps bid, 202 bps offered.

After the bell, the 2.45% five-year notes were seen at 97 bps bid, 92 bps offered. The 3% notes of 2020 ended at 122 bps bid, 117 bps offered.

The 3.4% notes due 2025 meantime finished at 139 bps bid, 137 bps offered, as the 4.5% notes due 2035 closed at 180 bps bid, 179 bps offered.

The 4.75% notes due 2046 wound up at 205 bps bid, 200 bps offered.

The joint bookrunners for the deal were BofA Merrill Lynch, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, including cash considerations for previously announced acquisitions.

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