Quiet primary hosts KfW, Standard Chartered, TD Bank; Boeing mostly flat; telecom bonds soft

By Aleesia Forni and Cristal Cody

Virginia Beach, March 26 – The relative lull in high-grade bond market activity continued on Thursday.

“Very, very quiet,” a market source said of the trading day.

Still, the session hosted $8.75 billion of investment-grade paper, pushing the week’s supply to more than $26.5 billion and March’s new issuance total to more than $160 billion.

Financials dominated the market again during the session, with new deals priced by KfW, Standard Chartered plc and Toronto-Dominion Bank.

Standard Chartered’s new contingent convertible issue was the highlight of Thursday’s session, pricing the perpetual tier 2 offering at the tight end of talk.

More than $20 billion of orders poured into the London-based bank’s new $2 billion deal.

In other primary news, KfW offered $5 billion of five-year global notes, while TD Bank sold a $1.75 billion covered bond, and both sold their respective new issues at the tight end of guidance.

Bonds were mixed in late afternoon secondary trading, sources said.

Boeing Co.’s senior notes (A2/A/A) were mostly unchanged.

Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) were mixed in secondary trading.

AT&T Inc.’s 3.9% notes due 2024 traded about 1 basis point weaker.

Microsoft Corp.’s 2.7% notes due 2025 eased 2 bps over the day.

Investment-grade credit spreads were flat to modestly softer going out.

The Markit CDX North American Investment Grade series 23 index was unchanged at a spread of 64 bps.

KfW sells $5 billion

In the largest new issue of the day, KfW sold $5 billion of 1.5% five-year global notes (Aaa/AAA/) at mid-swaps minus 1 bp, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes were guided in the mid-swaps flat area.

Pricing was at 99.613 with a spread of 14.15 bps over Treasuries.

The bookrunners were BofA Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

The German government-owned development bank is based in Frankfurt.

Standard Chartered perpetuals

Standard Chartered sold $2 billion of perpetual subordinated contingent convertible tier 1 securities (Ba1/BB/BBB) at par to yield 6.5%, according to an informed source.

The notes were guided in the 6.75% area.

Standard Chartered, BofA Merrill Lynch, Barclays, Goldman Sachs, J.P. Morgan Securities LLC and UBS Securities LLC were the bookrunners.

The bank and financial services company is based in London.

TD Bank covered bond

Toronto-Dominion Bank sold a $1.75 billion 1.95% covered bond (Aaa/AAA/) on Thursday with a spread of mid-swaps plus 37 bps, an informed source said.

The notes sold at the tight end of price guidance set at mid-swaps plus 37 bps to 38 bps, tightened from initial guidance in the mid-swaps plus 40 bps area.

Pricing was at 99.829 to yield 1.986%.

BNP Paribas Securities Corp., JPMorgan, RBC Capital Markets LLC and TD Securities (USA) LLC were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be added to the company’s general funds and used for general corporate purposes.

The financial services and banking company is based in Toronto.

Boeing mostly unchanged

Boeing’s 2.5% notes due 2025 were unchanged at 62 bps bid, a market source said.

The company sold $250 million of the notes on Feb. 18 at a spread of Treasuries plus 65 bps.

Boeing’s 3.5% notes due 2045 eased 1 bp to 105 bps bid, the source said.

The bonds priced in a $250 million tranche at 100 bps over Treasuries in the February sale.

The aerospace company is based in Chicago.

Verizon mixed

Verizon’s 3.5% notes due 2024 firmed 4 bps to 132 bps bid, according to a market source.

The issue priced in a $2.5 billion offering on Oct. 22 at Treasuries plus 135 bps.

Verizon’s tranche of 4.15% notes due 2024 eased 1 bp to 138 bps bid, the source said.

Verizon sold $1.25 billion of the notes on March 10, 2014 at Treasuries plus 140 bps.

The telecommunications company is based in New York City.

AT&T soft

AT&T’s 3.9% notes due 2024 (Baa1/BBB+/A-) traded about 1 bp weaker at 137 bps bid, a market source said.

AT&T sold $1 billion of the notes on March 5, 2014 at Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Microsoft eases

Microsoft’s 2.7% notes due 2025 were quoted 2 bps wider at 78 bps bid on Thursday, according to a market source.

Microsoft sold $2.25 billion of the notes (Aaa/AAA/) on Feb. 9 at Treasuries plus 75 bps.

The computer software company is based in Redmond, Wash.

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