Suncorp prices; Sumitomo joins forward calendar; Suncorp firms in aftermarket; Verizon better

By Cristal Cody and Aleesia Forni

Virginia Beach, March 25 - Suncorp-Metway Ltd. priced the day's sole deal on Tuesday during another quiet session for the investment-grade bond market.

The company brought to market $850 million of three-year notes in fixed- and floating-rate tranches on Tuesday, according to an informed source.

The sale included $350 million of floating-rate notes sold at par to yield Libor plus 70 basis points and $500 million of 1.7% notes sold at 99.994 to yield 1.702%, or Treasuries plus 80 bps.

Pricing for the Rule 144A and Regulation S deal was tight of guidance.

In other market news on Tuesday, Sumitomo Mitsui Financial Group Inc. mandated lead managers and began a series of investor meetings.

The bank is planning to sell a benchmark offering of tier 2 subordinated notes due 2024 in a Rule 144A and Regulation S transaction.

Roughly $2.7 billion has sold in the primary so far this week, continuing the slowdown the market has seen since last week's Federal Open Market Committee meeting and Wednesday's Federal Reserve statement.

Secondary trading was mostly quiet on Tuesday, according to market sources.

"It's relatively quiet," a trader said. "Spreads are unchanged to a little tighter."

The Markit CDX North American Investment Grade series 22 index headed out less than 0.5 bp tighter at a spread of 72 bps.

Investment-grade corporate bond volume was $12.3 billion, a source said.

Suncorp-Metway's two tranches of fixed- and floating-rate notes due 2017 traded 2 bps better on the bid side, a trader said.

Verizon Communications Inc.'s 4.15% notes due 2024 (Baa1/BBB+/A-) priced earlier in the month tightened over the day, according to market sources.

Suncorp new issue

Suncorp-Metway sold $850 million of three-year notes in fixed- and floating-rate tranches on Tuesday, an informed source said.

A $350 million tranche of floating-rate notes sold at par to yield Libor plus 70 bps.

There was also $500 million of 1.7% three-year notes sold at 99.994 to yield 1.702%, or Treasuries plus 80 bps.

The notes sold tight of guidance.

In aftermarket trading, Suncorp-Metway's new floating-rate notes due 2017 firmed to 68 bps bid, 63 bps offered, a trader said.

The 1.7% fixed-rate notes due 2017 tightened to 78 bps, the trader said.

The joint bookrunners for the Rule 144A and Regulation S deal were Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets LLC.

Suncorp-Metway is a finance, insurance and banking group based in Brisbane, Australia.

Sumitomo eyes offering

Sumitomo Mitsui Financial Group began a series of investor meetings on Tuesday ahead of a planned benchmark issue of tier 2 subordinated notes (/BBB+/BBB) due 2024, according to an informed source.

Barclays, Citigroup Global Markets, Goldman Sachs & Co. and SMBC Nikko are managing the Rule 144A and Regulation S deal.

The banking and financial company is based in Tokyo.

Verizon firms

Verizon's 4.15% notes due 2024 traded going out the door in the 130 bps to 131 bps bid area from 134 bps bid, 129 bps offered earlier in the day, a trader said.

Verizon sold $1.25 billion of the notes at 140 bps plus Treasuries on March 10.

The telecommunications company is based in New York City.

Bank/brokerage CDS mostly lower

Investment-grade bank and brokerage CDS prices firmed, according to a market source.

Bank of America Corp.'s CDS costs declined 2 bps to 62 bps bid, 65 bps offered. Citigroup Inc.'s CDS costs firmed 2 bps to 74 bps bid, 77 bps offered. JPMorgan Chase & Co.'s CDS costs fell 2 bps to 55 bps bid, 58 bps offered. Wells Fargo & Co.'s CDS costs firmed 2 bps to 37 bps bid, 40 bps offered.

Merrill Lynch's CDS costs tightened 2 bps to 67 bps bid, 71 bps offered. Morgan Stanley's CDS costs firmed 2 bps to 87 bps bid, 90 bps offered. Goldman Sachs Group, Inc.'s CDS costs declined 2 bps to 95 bps bid, 98 bps offered.

Paul Deckelman contributed to this review.

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