Abbey National, TD Bank, Brooklyn Union tap market; Morgan Stanley, Goldman Sachs, MUFG firm

By Aleesia Forni and Cristal Cody

New York, March 7 – Issuers took advantage of the investment-grade bond market’s momentum on Monday, bringing $7.7 billion of paper to market to open the week.

This follows the more than $52 billion of supply priced during the previous week.

Financial names including Abbey National Treasury Services plc, Toronto-Dominion Bank and Danske Bank AS entered the day’s primary, while Perrigo Finance Unlimited Co. sold its two tranches of notes tight of final guidance, a rarity in the high-grade sector.

And energy companies Brooklyn Union Gas Co. and Eversource Energy were met with solid demand for their respective new issues, both pricing at the tight end of price talk.

Investment-grade bank and financial paper traded mostly better on Monday.

Morgan Stanley’s 3.875% senior notes due 2026 firmed 6 basis points over the day.

Goldman Sachs Group Inc.’s 3.75% senior notes due 2026 headed out 7 bps tighter.

Mitsubishi UFJ Financial Group, Inc.’s 3.85% senior notes due 2026 tightened 5 bps in the secondary market.

Citigroup Inc.’s 3.7% subordinated notes due 2026 were 3 bps better in secondary trading.

Deutsche Bank AG’s 4.1% notes due 2026 eased 2 bps.

The Markit CDX North American Investment Grade index firmed about 1 bp to close on Monday at a spread of 94 bps.

Abbey National two-parter

Abbey National was in Monday’s market with a $2 billion offering of three-year notes (A1/A/A) in fixed- and floating-rate tranches, according to a market source.

There was a $1.65 billion 2.5% tranche sold at Treasuries plus 150 bps. Pricing was at 99.825 to yield 2.56%.

Pricing came on top of guidance and tighter than initial talk in the 165 bps area over Treasuries.

A $350 million floating-rate tranche of notes sold at par to yield Libor plus 148 bps.

Guidance was at the Libor equivalent to the fixed-rate tranche.

Citigroup Global Markets Inc., HSBC Securities, Morgan Stanley & Co. LLC, Santander and Wells Fargo Securities LLC are the bookrunners.

The notes are guaranteed by Santander UK plc.

Proceeds from the sale will be used for general corporate purposes.

The financial services companies are based in London.

TD Bank covered bond

Also on Monday, Toronto-Dominion Bank priced a $1.75 billion 2.25% five-year covered bond (Aaa/AAA) at mid-swaps plus 95 bps, a market source said.

The notes sold at 99.845 to yield 2.283%, or Treasuries plus 86.78 bps.

Initial guidance was in the high-90 bps area over mid-swaps.

Bookrunners were Citigroup, HSBC Securities, RBC Capital Markets LLC and TD Securities.

The financial services and banking company is based in Toronto.

Danske Bank does $1 billion

In another financial new issue, Danske Bank priced $1 billion of 2.8% five-year senior notes (A2/A/A) on Monday with a spread of 140 bps over Treasuries, a market source said.

The Rule 144A and Regulation S notes priced at 99.977 to yield 2.805%.

Pricing came at the tight side of the Treasuries plus 145 bps area guidance.

Bookrunners were Danske Bank and Wells Fargo.

Based in Copenhagen, Danske Bank is Denmark’s largest bank.

Perrigo new issue

Perrigo Finance Unlimited, the funding arm of Perrigo Co. plc, priced a $1.2 billion offering of senior notes (Baa3/BBB) in five- and 10-year tranches, both inside final guidance, according to a market source.

The offering included $500 million 3.5% five-year notes priced at Treasuries plus 210 bps.

The notes were guided in the 220 bps area over Treasuries and initially talked in the 250 bps area over Treasuries.

And a $700 million 4.375% tranche of 10-year bonds sold at 250 bps over Treasuries.

Pricing came tighter than guidance set in the 260 bps area over Treasuries and initial talk in the 285 bps area over Treasuries.

The bookrunners are BofA Merrill Lynch, HSBC Securities (USA) Inc. and Morgan Stanley.

Proceeds will be used to repay borrowings under a 364-day revolving credit facility and a five-year revolver and for general corporate purposes.

The notes will be fully and unconditionally guaranteed by Perrigo Co. plc.

The health-care company and maker of generic and over-the-counter pharmaceuticals is based in Allegan, Mich.

Brooklyn Union new issue

Brooklyn Union Gas sold $1 billion of senior notes (A2/A-/A-) on Monday in two parts, a market source said.

There were $500 million of 3.407% 10-year notes sold at par, or Treasuries plus 150 bps.

And a $500 million tranche of 30-year notes sold at par to yield 4.504% with a spread of Treasuries plus 180 bps.

Both tranches sold at the tight side of price guidance.

Proceeds will be used for general corporate purposes.

Bookrunners were BofA Merrill Lynch, Barclays, Mizuho Securities, RBC and RBS Securities Inc.

The natural gas distribution company is based in New York.

Eversource prices tight

Eversource Energy sold a $500 million issue of senior notes (Baa1/A-/BBB+) in two parts, according to two separate FWP filings with the Securities and Exchange Commission.

Included in the sale was $250 million of 2.5% five-year series I notes sold at 99.789 to yield 2.545%, or Treasuries plus 112 bps.

Also, $250 million of 3.35% 10-year series J notes sold at 147 bps over Treasuries. Pricing was at 99.696 to yield 3.386%.

Both tranches sold at the tight side of guidance.

The joint bookrunners are Barclays, BofA Merrill Lynch, TD Securities (USA) LLC, RBC, U.S. Bancorp Investments Inc. and Wells Fargo.

Proceeds will be used to repay short-term debt.

The Boston-based company is engaged in the energy delivery business through utility subsidiaries.

Entergy Louisiana adds on

Elsewhere on Monday, Entergy Louisiana LLC sold a $200 million add-on to its existing 4.95% first mortgage bonds (A2/A-) due Jan. 15, 2045 at Treasuries plus 244 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 97.006 to yield 5.15%.

The notes were sold at the tight side of guidance set in the 5.2% area, having firmed from talk in the 5.25% area.

The original $250 million issue of notes (A2/A-) sold Nov. 18, 2014 at Treasuries plus 192 bps.

Citigroup, J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and Wells Fargo were the joint bookrunners.

Proceeds will be used to pay $60 million to purchase interests of Unit No. 3 (nuclear) of the Waterford Steam Electric Station, to repay borrowings from the Entergy system money pool, to repay borrowings under a $350 million credit facility and for general corporate purposes.

Entergy Louisiana is a Jefferson, La.-based energy provider.

Idaho Power mortgage bonds

Idaho Power Co. priced $120 million of 4.05% 30-year secured medium-term first mortgage bonds (A1/A-), series J, at Treasuries plus 135 bps on Monday, according to a market source and an FWP filed with the SEC.

Pricing was at 99.742.

The notes sold at the tight side of guidance set in the 140 bps area over Treasuries. Initial talk was in the Treasuries plus 150 bps to 155 bps range.

Wells Fargo, JPMorgan, KeyBanc Capital Markets Inc., MUFG, BofA Merrill Lynch and BNY Mellon Capital Markets, LLC were the bookrunners.

Proceeds will be used to pay $100 million of the company’s 6.15% mortgage bonds due April 2019 and to fund a portion of its capital requirements.

The electric utility is based in Boise, Idaho.

Morgan Stanley tightens

Morgan Stanley’s 3.875% notes due 2026 traded 6 bps better over the session at 178 bps bid, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/BBB+/A) on Jan. 22 at a spread of 185 bps plus Treasuries.

The financial services company is based in New York City.

Goldman firms

Goldman Sachs’ 3.75% notes due 2026 firmed 7 bps to 187 bps bid on Monday, according to a market source.

Goldman Sachs sold $1.75 billion of the notes (A3/BBB+/A) on Feb. 22 at 203 bps over Treasuries.

The financial services company is based in New York City.

MUFG better

Mitsubishi UFJ Financial Group’s 3.85% notes due 2026 improved 5 bps over the day to 183 bps bid, a market source said.

MUFG sold $2.5 billion of the notes (A1/A) on Feb. 23 at a spread of Treasuries plus 215 bps.

The financial services company is based in Tokyo.

Citigroup improves

Citigroup’s 3.7% notes due 2026 tightened 3 bps during the session to 175 bps bid, a market source said.

Citigroup sold $2 billion of the notes (Baa1/BBB+/A) on Jan. 5 at a spread of Treasuries plus 148 bps.

The financial services company is based in New York.

Deutsche Bank eases

Deutsche Bank’s 4.1% notes due 2026 were 2 bps softer on the day at 260 bps bid, according to a market source.

The Frankfurt-based bank sold $750 million of the notes (A3/BBB+/A) on Jan. 8 at a spread of 200 bps plus Treasuries.

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