Japan International Agency prices $500 million; Kaiser Permanent offers bonds; AT&T softens

By Cristal Cody

Tupelo, Miss., April 20 – Japan International Cooperation Agency tapped the primary market on Thursday with a $500 million offering of 10-year guaranteed senior bonds as the sole high-grade issuer for the day.

Deal action is expected to remain quiet on Friday before supply picks back up in the upcoming week with few issuers wanting to carry risk over the weekend during the first round of the French presidential election, according to market sources.

Looking ahead to the upcoming week, Kaiser Permanente is in the deal pipeline with a three-part offering of bonds.

The Markit CDX North American Investment Grade index tightened more than 1 basis point on Thursday to close at a spread of 68 bps.

In the secondary market, AT&T Inc.’s 4.25% notes due March 1, 2027 lost ground on Thursday and eased about 4 bps.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 firmed about 1 bp.

Japan agency sells bonds

The Japan International Cooperation Agency (/A+/) sold $500 million of 2.75% 10-year guaranteed senior bonds on Thursday at 99.48 to yield 2.81%, according to an FWP filing with the Securities and Exchange Commission.

The bonds priced with a spread of 57.1 bps over Treasuries. The notes were talked to price in the mid-swaps plus 65 bps area.

BofA Merrill Lynch, BNP Paribas Securities Corp. and Mizuho International plc were the bookrunners.

The notes are guaranteed by Japan.

Proceeds from the offering will be allocated to the agency’s finance and investment account for investments in one or more eligible projects selected under the Japanese government’s development cooperation charter endorsed in 2015.

The charter is in line with the 2030 Agenda for Sustainable Development adopted at the UN Sustainable Development Summit in 2015 and is broadly consistent with Japan International Cooperation Agency’s mission to reduce poverty, build peace and address global issues. Projects are eligible for funding through the agency’s ODA Loans and Private Sector Investment Finance operations.

Japan International Cooperation Agency is a Japanese government-owned agency that promotes international cooperation and development of Japanese and global economies.

Kaiser Permanente markets bonds

Kaiser Permanente (/AA-/A+) plans to price three tranches of 3(a)4 tax-exempt series 2017 bonds, according to a market source on Thursday.

The deal includes notes due May 1, 2022, May 1, 2027 and May 1, 2047.

One of the tranches is expected to be a green bond.

Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC are active leads. Passives are Barclays, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC.

Pricing is expected the week of April 24.

Kaiser Permanente is a managed care consortium based in Oakland, Calif.

AT&T eases

AT&T’s 4.25% notes due March 1, 2027 eased about 4 bps in secondary trading to 174 bps bid on Thursday, according to a market source.

The notes traded about 4 bps better on Wednesday.

The company priced $2 billion of the notes (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon firms

Verizon Communications’ 4.125% notes due March 16, 2027 traded about 1 bp tighter on the day at 154 bps bid, a source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

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