KfW upsizes; Dexia, Anheuser-Busch InBev price; spreads widen on oil decline; Barclays softens

By Aleesia Forni

New York, Jan. 20 – KfW and Dexia Credit Local sold bonds on Wednesday, while high-grade credit spreads were wider as stocks plunged and oil prices fell below $27 per barrel for the first time since 2003.

The Markit CDX North American Investment Grade 25 index was 1 basis point wider on the day at a spread of 111 bps.

Following the continued tumble in oil prices, bonds from Shell International Finance BV were trading wider late Wednesday.

The company’s 4.3% bonds due 2019 and 2.125% bonds due 2020 were each 4 bps softer, respectively.

Meanwhile, Barclays plc’s 5.25% bonds due 2045 were 4 bps wider following news of a round of job cuts at the investment bank in New York, London and across Asia.

And HSBC Holdings plc’s 4.25% subordinated notes due 2025 eased 2 bps, while bank and financial paper was around 2 bps to 3 bps wider on the day overall.

Back in the primary market, KfW doubled the size of its floaters to $2 billion from initial size thoughts of $1 billion, and Dexia sold its three-year notes inside price guidance.

KfW upsizes

A quiet Wednesday session saw KfW sell an upsized $2 billion issue of floating-rate global notes (Aaa/AAA) due Dec. 29, 2017 at par to yield Libor plus 16 bps, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The notes sold inside price guidance set in the Libor plus 17 bps area.

BNP Paribas Securities Corp., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the bookrunners.

The German government-owned development bank is based in Frankfurt.

Dexia new issue

Also on Wednesday, Dexia Credit Local priced $1.75 billion of three-year notes (Aa3/AA/) at mid-swaps plus 83 bps, according to an informed source.

The notes were talked at mid-swaps plus 84 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Societe Generale were the joint bookrunners.

The regional bank, focusing on sustainable development, is based in Brussels.

AB InBev acquisition financing

In other primary happenings, Anheuser-Busch InBev Finance Inc. sold $1.47 billion of 4.915% 30-year senior notes (A2/A-) on Wednesday at par, according to an FWP filing with the SEC.

The notes are guaranteed by Anheuser-Busch InBev SA/NV, Anheuser-Busch InBev Worldwide Inc., Brandbev Sarl, Brandbrew SA, Cobrew NV and Anheuser-Busch Cos. LLC.

Deutsche Bank AG, Taipei branch is the bookrunner and is joined by BofA Merrill Lynch as structuring agents.

Application will be made for the notes to be admitted to listing on the Taipei Exchange.

Proceeds will be used to help fund the acquisition of SABMiller and for general corporate purposes.

The brewery is based in Leuven, Belgium.

Barclays soft

Moving to the secondary market, Barclays’ 5.25% notes due 2045 eased 4 bps on the day to 235 bps bid, a source said.

Barclays sold $1.5 billion of the bonds (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

HSBC paper widens

HSBC’s 4.25% notes due 2025 eased 11 bps over the trading session to 239 bps bid, according to a market source.

HSBC sold $1.5 billion of the notes (A2/A+) on Aug. 10 at a spread of Treasuries plus 212 bps.

The banking and financial services company is based in London.

Shell bonds ease

Shell International Finance’s 2.125% notes due 2020 widened 4 bps to 82 bps bid on Wednesday, according to a market source.

Shell sold $2 billion of the five-year notes (A1/AA/) on May 6 at a spread of Treasuries plus 60 bps.

And its 4.3% notes due 2019 widened 4 bps over the day to 115 bps bid.

Shell sold $2 billion of the notes on Sept. 15, 2009 at Treasuries plus 90 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

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