Bank of America, Mitsubishi UFJ, Sweden sell notes; Kommunalbanken to price; spreads flat

By Cristal Cody

Tupelo, Miss., July 18 – Deal action stayed strong in the high-grade bond market on Tuesday, particularly in bank and financial issuance.

Bank of America Corp. tapped the primary market with a $7 billion four-tranche offering of notes following the release of the company’s second-quarter earnings.

Also on Tuesday, Mitsubishi UFJ Financial Group, Inc. priced a $4 billion three-part offering of senior notes.

The deals follow other issuance from JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. on Monday.

In other bank issuance on Tuesday, Toronto-Dominion Bank priced C$1.5 billion of medium-term fixed-to-floating rate non-viability contingent capital subordinated notes with a robust book size, a source said.

The session also saw a $2.75 billion offering of two-year bonds from the Kingdom of Sweden.

Looking ahead to Wednesday, Kommunalbanken AS (Aaa/AAA) is expected to offer a $300 million add-on to its floating-rate notes due Sept. 8, 2021 in a Rule 144A and Regulation S deal, according to a market source.

The notes were initially talked to price in the Libor plus 12 basis points area.

BMO Capital Markets Corp., Morgan Stanley & Co. LLC and Nomura are the lead managers.

In other action on Tuesday, Alimentation Couche-Tard Inc. (Baa2/BBB) was expected to wrap a second day of investor calls for a senior note offering in the U.S. market. The company also plans a Canadian private placement deal.

“They’re kicking the tires in the U.S. and Canada,” a source said.

HSBC, MUFG and Wells Fargo Securities, LLC are arranging the calls.

The Markit CDX North American Investment Grade index closed the day mostly flat at a spread of 57 bps.

Bank of America prices

Bank of America priced $7 billion of notes (Baa1/BBB+/A) in four tranches on Tuesday, according to a market source.

Bank of America sold $1 billion of four-year floating-rate notes at Libor plus 66 bps.

The bank priced $2.5 billion of 2.369% four-year notes at a spread of Treasuries plus 85 bps.

The $1.5 billion offering of 2.816% six-year notes was sold at a spread of 100 bps over Treasuries.

Bank of America also placed $2 billion of 3.593% 11-year notes at a spread of Treasuries plus 133 bps.

BofA Merrill Lynch was the bookrunner.

The financial services company is based in Charlotte, N.C.

MUFG brings $4 billion

Mitsubishi UFJ Financial Group priced a $4 billion three-part offering of senior notes (A1/A/A) on Tuesday, according to a market source.

The company sold $1 billion of five-year floating-rate notes at Libor plus 79 bps.

Mitsubishi UFJ Financial Group priced $2 billion of 2.665% five-year fixed-rate notes at a spread of Treasuries plus 85 bps.

The $1 billion tranche of 3.287% 10-year notes priced at a Treasuries plus 103 bps spread.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and MUFG were the lead managers for the five-year fixed- and floating-rate notes. BofA Merrill Lynch, Morgan Stanley and MUFG were bookrunners for the 10-year tranche.

Proceeds will be used for operations of Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mitsubishi UFJ Trust and Banking through loans.

The bank is based in Tokyo.

Sweden prices $2.75 billion

Sweden (Aaa/AAA/AAA) priced $2.75 billion of 1.5% bonds due July 25, 2019 at 99.951 to yield 1.525% in a Rule 144A and Regulation S offering on Tuesday, according to a news release.

The notes priced at a spread of mid-swaps minus 6 bps, or Treasuries plus 17.3 bps.

Goldman Sachs International, HSBC and Nordea Bank AB were the bookrunners.

Proceeds will be used to refinance loans to the Riksbank, the central bank of Sweden.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.