Morning Commentary: Sumitomo Mitsui prices $2.5 billion notes; FHLBank sells $3 billion

By Devika Patel

Knoxville, Tenn., Oct. 11 – The high-grade bond primary market was relatively quiet Wednesday morning, with details emerging of two deals that priced.

Tokyo-based banking and financial company Sumitomo Mitsui Financial Group Inc. priced $2.5 billion of senior notes in three tranches, including the addition of a second fixed-rate tranche.

Washington, D.C.-based funding provider Federal Home Loan Bank System priced $3 billion of three-year 3% Global notes.

Sumitomo Mitsui priced $2.5 billion of senior notes (A1/A-) in three tranches on Wednesday evening.

The company sold $850 million of five-year floating-rate notes with a coupon equal to Libor plus 80 basis points.

The issuer priced $1 billion of 3.936% five-year fixed-rate notes with a spread of Treasuries plus 92 bps.

The company also brought $650 million of 4.306% 10-year notes with a spread of 112 bps over Treasuries.

All of the notes were sold at par.

The final offering included the addition of a second fixed-rate tranche.

SMBC Nikko Securities America Inc., Goldman Sachs & Co. LLC, Barclays and Citigroup Global Markets Inc. are the bookrunners.

Proceeds will be used to extend senior unsecured loans to subsidiary SMBC Nikko, which will use the proceeds of the loans for general corporate purposes.

The Federal Home Loan Bank System sold $3 billion of 3% three-year Global notes at 99.935 to yield 3.023% on Thursday.

The notes priced with a spread of 8 bps over Treasuries.

Barclays, Citigroup and Nomura were the lead managers.

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