World Bank, Toyota Credit, AerCap price; AT&T firms; State Street, CVS Health mostly flat

By Cristal Cody

Eureka Springs, Ark., May 17 – The launch of Dell Inc.’s upsized $20 billion bond offering dominated the primary market on Tuesday, but a few issuers brought deals during the session.

The International Bank for Reconstruction and Development (World Bank) announced that it priced a $5 billion 1.375% five-year global bond at 99.74 to yield 1.429%.

“What a great trade,” Adrien de Naurois, managing director of SSA syndicate at BofA Merrill Lynch, said in a release. “The first five-year sovereign/supranational/agency in over two months. But more significantly, the tightest print to U.S. Treasuries in any tenor for an SSA this year whilst printing the $5 billion.”

The bulk of the deal’s distribution, 54%, went to central banks and institutions, while 33% of bonds were allocated to bank treasuries, private banks and corporate investors and 13% to asset managers, insurance and pension funds.

Investors in Asia Pacific took 48%, investors in the Americas took 36%, and 16% was distributed to European investors, according to the release.

Also on Tuesday, Toyota Motor Credit Corp. sold $1.25 billion in two tranches of three-year series B medium-term notes (Aa3/AA-/).

In addition, AerCap Ireland Capital Ltd. and AerCap Global Aviation Trust priced $1 billion of five-year notes during the session.

Credit spreads remained soft over the day. The Markit CDX North American Investment Grade index closed more than 1 basis point weaker at a spread of 83 bps.

In the secondary market, AT&T Inc.’s 4.125% notes due 2026 firmed 1 bp on Tuesday.

State Street Corp.’s notes (A1/A/AA-) priced in two parts on Monday traded about 1 bp tighter than issuance earlier in the day.

CVS Health Corp.’s $3.5 billion of notes (Baa1/BBB+) brought to market in two tranches on Monday were seen early Tuesday wrapped around issuance.

World Bank sells $5 billion

The World Bank priced a $5 billion 1.375% five-year global bond at 99.74 to yield 1.429%.

The bond (Aaa/AAA) priced with a spread of 17.3 bps over Treasuries.

The lead managers were BofA Merrill Lynch, Barclays, J.P. Morgan Securities LLC and Nomura Securities International, Inc.

The order book closed in excess of $6.7 billion with more than 105 accounts participating, according to the release.

World Bank said it was able to tighten pricing from the initial guidance based on the high-quality demand.

Washington, D.C.-based World Bank operates as a global development cooperative owned by 189 nations.

Toyota brings two tranches

Toyota Motor Credit sold $1.25 billion in two tranches of three-year series B medium-term notes on Tuesday, according to FWP filings with the Securities and Exchange Commission.

The company priced $250 million of three-year floating-rate notes at par to yield a spread of Libor plus 40 bps.

In the fixed-rate tranche, Toyota Motor Credit sold $1 billion of 1.4% notes due May 20, 2019 at 99.86 to yield 1.448% and a spread of 48 bps over Treasuries.

Barclays, BNP Paribas Securities Corp., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC were the lead managers.

Toyota Motor Credit is a financing arm and subsidiary of Toyota Motor Corp.

AerCap prices $1 billion

AerCap Ireland Capital and AerCap Global Aviation Trust sold $1 billion of 3.95% five-year senior notes (Ba1/BBB-/BB+) at 99.813 to yield 3.988% on Tuesday, according to an FWP filing with the SEC.

The notes priced with a spread of 270 bps over Treasuries.

The bookrunners were Barclays, Mizuho Securities USA Inc., RBC Capital Markets Corp., Wells Fargo Securities LLC, BNP, Citigroup Global Markets Inc., Credit Agricole (USA) Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Securities, Inc., Goldman Sachs & Co., HSBC, JPMorgan, BofA Merrill Lynch, Morgan Stanley and SunTrust Robinson Humphrey, Inc.

The notes are guaranteed by AerCap Holdings NV.

Proceeds will be used for general corporate purposes.

AerCap is an independent aircraft leasing company based in Amsterdam.

AT&T improves

AT&T’s 4.125% notes due 2026 (Baa1//A-) firmed 1 bp on Tuesday to 167 bps bid, a market source said.

AT&T sold $900 million in a tap of the issue on May 3 at a spread of Treasuries plus 150 bps.

The notes originally were priced on Jan. 29 in a $1.5 billion tranche at Treasuries plus 195 bps.

AT&T is a Dallas-based telecommunications company.

State Street modestly firms

State Street’s 2.65% notes due 2026 were seen about 1 bp tighter in early secondary trading on Tuesday at 91 bps offered, according to a market source.

The company sold $750 million of the 10-year notes on Monday at a spread of 92 bps over Treasuries.

The financial holding company is based in Boston.

CVS unchanged

CVS Health’s 2.125% notes due 2021 were unchanged from issuance at 92 bps offered in secondary trading earlier in the day, according to a market source.

The company sold $1.75 billion of the five-year notes at a spread of Treasuries plus 92 bps on Monday.

CVS Health’s $1.75 billion tranche of 2.875% notes due 2026 also were wrapped around issuance in secondary trading. The company sold the 10-year notes on Monday at a spread of 122 bps over Treasuries.

The pharmacy retailer is based in Scarsdale, N.Y.

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