Macquarie, ANZ, Owl Rock, VEON, Canada price; JBIC on tap; Portland Electric eyes primary

By Cristal Cody

Tupelo, Miss., Jan. 14 – Deal volume remained strong on Tuesday with investment-grade corporate and sovereign, supranational and agency issuance.

Macquarie Bank Ltd. priced $1.25 billion of five-year senior notes.

Australia and New Zealand Banking Group, Ltd. sold $1.25 billion of long 10-year fixed-to-floating-rate subordinated notes.

New York Life Global Funding brought $650 million of five-year senior secured notes.

Owl Rock Capital Corp. sold $500 million of five-year senior notes.

VEON Holdings BV priced a $300 million tap of its split-rated 4% senior notes due April 9, 2025.

Guardian Life Insurance Co. of America sold $300 million of 50-year surplus notes.

In SSA supply, KfW priced $5 billion of three-year guaranteed global notes.

Canada sold $3 billion of five-year global bonds.

In other action during the session, EQT Corp. wrapped a two-day round of fixed income investor calls for a two-part registered offering of fixed-rate senior notes.

Japan Bank for International Cooperation marketed a registered offering of three-year guaranteed bonds that are expected to price on Wednesday.

Meanwhile, Portland General Electric Co. (A1/A) is keeping an eye on the bond market in 2020 after pricing its lowest coupon on a 30-year issue in late 2019, Katie Trosen, principal treasury analyst at Portland General Electric, told Prospect News.

The company sold $270 million of 30-year first mortgage bonds in two tranches in a private placement offering via BofA Securities, Inc. and Barclays.

The deals included $110 million of 3.34% notes due Oct. 15, 2049 issued on Oct. 25, 2019 at par to yield a spread of Treasuries plus 130 bps and $160 million of 3.34% notes due Jan. 15, 2050 that were issued on Nov. 15, 2019 at par to yield a Treasuries plus 130 bps spread.

“It was our lowest 30-year coupon we’ve done in the history of Portland General,” Trosen said.

The utility plans to return to the high-grade primary market in 2020.

“It’s on our radar,” Trosen said. “We see people pricing early and maintaining low rates.”

Volume to date

Investment-grade volume has been heavy already with more than $60 billion of bonds priced last week, about half of the supply expected for all of January.

Week to date, corporate issuers have priced more than $8 billion of notes. Corporate and SSA volume totals more than $16 billion.

About $30 billion to $35 billion of bond supply is expected this week, according to syndicate sources.

Market focus continues to center on fourth quarter results and potential bond issuance that could follow. On Tuesday, Citigroup Inc. and JPMorgan Chase & Co. reported better-than-expected profit results, while Wells Fargo & Co. reported weaker earnings.

On Wednesday, Bank of America Corp., BB&T Corp., U.S. Bancorp and Goldman Sachs Group Inc. will report earnings results, followed by SunTrust Banks Inc., Bank of New York Mellon Corp. and Morgan Stanley on Thursday.

Only 26 U.S. investment-grade issuers are scheduled to release earnings results over the week, “but they account for 11.5% of the index in terms of bond market value,” BofA Securities, Inc. credit strategist Yuri Seliger said in a research note released Tuesday.

“This is because all six large U.S. banks and brokers are reporting earnings this week,” Seliger said. “The pace then accelerates to 55 issuers for the week of January 20 and the peak 130 issues during the week of January 27. The reporting will shift from mostly financials this week to 55% BBB industrials and 33% HQ industrials by the week of January 27.”

The Markit CDX North American Investment Grade 33 index ended the session slightly softer at a spread of 44.72 bps.

Macquarie sells $1.25 billion

Macquarie Bank priced $1.25 billion of 2.3% senior notes due Jan. 22, 2025 (A2/A/A) on Tuesday at a spread of 70 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 85 bps area.

BofA Securities, Citigroup Global Markets Inc., J.P. Morgan Securities, LLC, Macquarie Capital Markets and Wells Fargo Securities LLC were the bookrunners.

Macquarie Bank is part of Sydney, Australia-based financial services company Macquarie Group Ltd.

ANZ prices $1.25 billion

Australia and New Zealand Banking Group priced $1.25 billion of 2.95% fixed-to-floating-rate subordinated notes due July 22, 2030 (Baa1/BBB+/A+) on Tuesday at a Treasuries plus 133 bps spread, according to a market source.

Guidance was in the Treasuries plus 135 bps area, tighter than initial revised price talk in the 150 bps spread area and initial talk in the 160 bps area.

The notes will reset to a floating rate of Libor plus 128.8 bps after the initial fixed-rate period.

ANZ Securities Inc., Citigroup, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were the bookrunners.

New York Life prints

New York Life Global Funding sold $650 million of 2% senior secured notes due Jan. 22, 2025 (Aaa/AA+/AAA) on Tuesday at a spread of 45 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 60 bps area.

BofA Securities, Citigroup and J.P. Morgan were the bookrunners.

New York Life Global is a unit of New York-based mutual insurance company New York Life Insurance Co.

Owl Rock sells notes

Owl Rock Capital priced $500 million of 3.75% senior notes due July 22, 2025 (Baa3/BBB-/BBB-) on Tuesday at a spread of Treasuries plus 220 bps, according to a market source and a 497AD filing with the Securities and Exchange Commission.

Initial price talk was in the Treasuries plus 225 bps spread area.

The notes priced at 99.626 to yield 3.826%.

BofA Securities, Deutsche Bank Securities Inc., Goldman Sachs, ING Financial Markets LLC, MUFG, RBC Capital Markets, LLC, SG Americas Securities, LLC, SMBC Nikko Securities America, Inc. and SunTrust Robinson Humphrey, Inc. were the bookrunners.

The middle-market debt and equity asset management company is based in New York.

VEON prices add-on

VEON Holdings priced a $300 million add-on to its 4% senior notes due April 9, 2025 (Ba2/BB+/BBB-/) on Tuesday at 103.75 to yield a spread of 155.17 bps over Treasuries, according to a market source and a news release.

Initial price talk was at 102.50 to 103 with guidance tightened to 103.50 to 103.75.

The VEON Ltd. subsidiary first sold $700 million of the notes in a Rule 144A and Regulation S transaction on Oct. 2 at par to yield a spread of 257.6 bps over Treasuries. The total outstanding is now $1 billion.

Citigroup, HSBC Securities (USA) Inc., J.P. Morgan and Societe Generale were the bookrunners.

In the secondary market, the notes were last seen trading on Thursday at 104.625.

Amsterdam-based VEON Ltd. provides mobile and fixed-line telecommunications services through its subsidiaries in emerging markets.

Guardian Life in primary

Guardian Life Insurance sold $300 million of 3.7% 50-year surplus notes (A1/AA-/) at a spread of 147 bps over Treasuries on Tuesday, according to a market source.

Initial price guidance was in the Treasuries plus 165 bps to 170 bps area.

Credit Suisse Securities (USA) LLC and J.P. Morgan were the bookrunners.

Proceeds will be used for general corporate purposes.

Guardian Life Global Funding is a mutual life insurance company based in New York City.

KfW prices $5 billion

KfW (Aaa/AAA/AAA) priced a $5 billion offering of 1.625% guaranteed global notes due Feb. 15, 2023 on Tuesday at 99.943 and a spread of mid-swaps plus 5 bps, or Treasuries plus 6.4 bps, according to a market source and an FWP filing.

The notes were initially talked to price in the mid-swaps plus 7 bps area with guidance tightened to the mid-swaps plus 6 bps area.

BMO Capital Markets Corp., Citigroup and Morgan Stanley were the lead managers.

KfW is a government-backed bank based in Frankfurt.

Canada raises $3 billion

Canada (Aaa/AAA/) priced $3 billion of 1.625% five-year global bonds on Tuesday at a Treasuries plus 6 bps spread, according to an informed source and an FWP filing.

The notes due Jan. 22, 2025 were initially talked to price with a spread in the Treasuries plus 8 bps area with guidance tightened by 2 bps.

The notes priced at 99.69 to yield 1.69%.

BNP Paribas Securities Corp., CIBC World Markets Corp., HSBC Securities, RBC Capital Markets and TD Securities (USA) LLC were the lead managers.

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