ING, NWB, Toyota Motor, Alabama Power price; bank, financial paper mostly better

By Aleesia Forni and Cristal Cody

Virginia Beach, April 9 – The steady stream of issuers entering the primary continued on Thursday, with ING Group, Nederlandse Waterschapsbank NV, Toyota Motor Credit Corp. and Alabama Power Co. pricing bonds.

ING came to market with a $2.25 billion two-part issue of perpetual tier 1 contingent convertible securities.

Toyota Motor Credit was also in the market with a two-tranche offering, selling $1.9 billion of floaters due 2016.

NWB Bank sold its $1.25 billion seven-year note at the tight end of price guidance.

Both tranches of Alabama Power’s new senior note sale priced between 10 basis points to 15 bps tight of initial guidance.

Despite the primary’s slowdown following March’s onslaught of new issuance, sources note that underlying market conditions remain constructive.

“The tone is solid,” a market source said. “We’re expecting things to heat up in the coming weeks.”

The pace of issuance is predicted to resume once corporates have exited their earnings blackout periods.

Investment-grade bonds were mixed in trading over the day, market sources said.

The Markit CDX North American Investment Grade series 23 index edged wider to a spread of 61 bps.

New bank and financial paper traded mostly better earlier in the day, according to market sources.

Bank of Montreal’s 1.4% medium-term notes due 2018 priced on Tuesday were 3 bps tighter than issuance.

Deutsche Bank AG’s 4.5% subordinated tier 2 notes due 2025 firmed about 1 bp.

General Motors Financial Co., Inc.’s 2.4% senior notes due 2018 brought on Tuesday traded about 1 bp better.

ING CoCos

ING Group sold a $2.25 billion issue of perpetual tier 1 contingent convertible securities in two tranches, according to a company news release.

There was a $1 billion 6% tranche, which will be non-callable for five-years, and a $1.25 billion 6.5% tranche, which will be non-callable for 10 years.

The securities will be converted into ordinary shares if the company’s phased-in CET 1 ratio falls below 7%.

The global financial institution is based in Amsterdam.

Toyota Motor floaters

Toyota Motor Credit sold $1.9 billion of floating-rate medium-term notes (Aa3/AA-/), series B, on Thursday in two parts, according to two separate FWP filings with the Securities and Exchange Commission.

The sale included $1.4 billion of floaters due April 15, 2016 at par to yield Libor plus 1 bp.

There was also $500 million of floaters due Oct. 14, 2016 priced at par to yield Libor plus 10 bps.

BofA Merrill Lynch, RBC Capital Markets, Loop Capital Markets LLC and Toyota Financial Services Securities USA Corp. were the agents.

The funding arm of auto manufacturer Toyota is based in Torrance, Calif.

NWB prices tight

Nederlandse Waterschapsbank priced $1.25 billion of 1.875% seven-year notes (Aaa/AA+/) on Thursday at mid-swaps plus 16 bps, an informed source said.

The notes were guided in the mid-swaps plus high-teens bps area.

Pricing was at 99.596 to yield 1.937%.

BofA Merrill Lynch, BNP Paribas Securities, Nomura and TD Securities were the joint bookrunners.

The notes were sold via Rule 144A and Regulation S.

The financial services company for the public sector is based in the Hague, the Netherlands.

Alabama Power two-parter

Alabama Power sold a combined $425 million of senior notes (A1/A/A+) in two tranches on Thursday, according to a market source and two FWP filings with the SEC.

A $250 million tranche of 2.8% series 2015B senior notes due 2025 sold at 99.888 to yield 2.813%, or Treasuries plus 85 bps.

The notes sold at the tight end of guidance set in the 90 bps area over Treasuries. Initial talk was set in the range of 95 bps to 100 bps over Treasuries.

The sale also included a $175 million reopening of the company’s existing 3.75% series 2015A senior notes due March 1, 2045 priced at Treasuries plus 110 bps.

The add-on sold at the tight end of the 115 bps over Treasuries area guidance, which tightened from initial talk set in the Treasuries plus 120 bps area.

Pricing was at 101.051 to yield 3.691%.

The original $550 million of 3.75% senior notes due 2045 sold with a spread of 107 bps over Treasuries on March 5.

Proceeds will be used for redemption of the company’s 6.48 million shares of 5.2% class A preferred stock, 4 million shares of its 5.3% class A preferred stock and 6 million shares of its 5.625% preference stock. Any remaining proceeds will be used for general corporate purposes.

The bookrunners were Citigroup Global Markets Inc. J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC.

The electric subsidiary of Southern Co. is based in Birmingham, Ala.

BMO firms

Bank of Montreal’s 1.4% notes due 2018 were quoted early in the day at 57 bps offered, a source said.

Bank of Montreal priced $1 billion of the notes (Aa3/A+/AA-) on Tuesday at 60 bps over Treasuries.

The financial services company is based in Toronto and Montreal.

Deutsche better

Deutsche Bank’s 4.5% subordinated tier 2 notes due 2025 were seen trading earlier on Thursday about 1 bp tighter at 255 bps offered, a market source said.

Deutsche Bank sold $1.5 billion of the notes (Ba1/BBB-/A-) on March 27 at 260 bps plus Treasuries.

The bank is based in Frankfurt.

GM Financial improves

General Motors Financial’s 2.4% notes due 2018 traded about 1 bp better at 149 bps bid, a market source said earlier in the day.

General Motors Financial sold $850 million of the notes (Ba1/BBB-/BB+) on Tuesday at a spread of Treasuries plus 160 bps.

The finance subsidiary of General Motors Co. is based in Fort Worth.

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