MetLife, PNC, Swedish Export Credit sell high-grade bonds; strong volume eyed post-holiday

By Cristal Cody

Tupelo, Miss., Aug. 30 – Investment-grade issuance on Thursday included two corporate deals.

Metropolitan Life Global Funding I priced $1 billion of two-year floating-rate notes at the Secured Overnight Financing Rate plus 57 basis points.

The benchmark may be used to replace Libor, which will be phased out by 2021.

The International Bank for Reconstruction and Development, or World Bank, priced $1 billion of two-year global floating-rate notes based on the SOFR benchmark on Aug. 14.

Also on Thursday, PNC Financial Services Group, Inc. brought $500 million of three-year senior notes to the primary market.

In SSA supply, Swedish Export Credit Corp. sold $1 billion of two-year global notes.

Week to date, high-grade volume totals $6.75 billion, including $2.5 billion in corporate issuance.

Market sources had predicted up to about $5 billion of high-grade corporate volume for the week.

New issuance is expected to be strong in the week ahead following the Labor Day holiday with $45 billion to $55 billion of supply predicted, according to a BofA Merrill Lynch research note released on Thursday.

High-grade “corporate bond spreads have been flat over the last two weeks – despite a rally in stocks and high yield credit,” analysts said in the note. “What is holding back high grade is mainly concerns about supply volumes after Labor Day. The trigger of more direction to spreads is whether volumes slow materially after the first week of the month.”

The Markit CDX North American Investment Grade 30 index softened more than 1 bp during the session to a spread of 60 bps.

MetLife prices $1 billion

Metropolitan Life Global Funding I priced $1 billion of the two-year floating-rate notes (Aa3/AA-/) on Thursday at SOFR plus 57 bps, according to a market source.

The notes were initially talked to print in the SOFR plus 60 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and TD Securities (USA) LLC were the bookrunners.

The issuer is a financing arm of New York City-based insurance and employee benefits company MetLife Inc.

PNC raises $500 million

PNC Financial Services Group sold $500 million of 3.25% three-year senior notes at 99.929 to yield 3.275% on Thursday, according to an FWP filing with the Securities and Exchange Commission.

The notes (A3/A-/A+) priced with a spread of 55 bps over Treasuries.

Morgan Stanley & Co. LLC was the bookrunner.

PNC Financial Services is a Pittsburgh-based financial services holding company.

SEK brings $1 billion

In other issuance, Swedish Export Credit (Aa1/AA+/) priced $1 billion of 2.75% two-year global notes at 99.773 to yield 2.862%, or a spread of mid-swaps plus 2 bps, according to a market source and an FWP filing with the SEC.

The notes were initially talked to price in the mid-swaps plus 3 bps area with guidance later revised to the mid-swaps plus 2 bps area.

Citigroup Global Markets Ltd., Nomura International plc, RBC Capital Markets LLC and TD Securities were the bookrunners.

Swedish Export Credit is a Stockholm-based state-owned financial services company for the Swedish export industry.

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