Bank of Montreal, Valero Energy, Societe Generale, BNG Bank price; high-grade inflows rise

By Cristal Cody

Tupelo, Miss., March 21 – Bank of Montreal brought $2.25 billion of three-year senior medium-term notes in two tranches to the high-grade primary market on Thursday.

In addition, Societe Generale SA priced $1.5 billion of five-year notes on top of guidance.

Also, Valero Energy Corp. sold $1 billion of 10-year senior notes.

In other supply, BNG Bank NV priced an upsized $300 million reopening of its senior floating-rate notes due March 11, 2022.

Investment-grade issuers have priced more than $18 billion of bonds week to date.

About $20 billion to $25 billion of supply was expected by syndicate sources for the week.

For the week ended March 20, Lipper US Fund Flows reported corporate investment-grade fund inflows rose to $5.14 billion from $3.3 billion in the prior week.

Elsewhere, the Markit CDX North American Investment Grade 32 index was mostly unchanged on Thursday at a spread of 64 basis points.

The Federal Reserve’s decision on Wednesday to keep rates flat for the remainder of the year was a dovish surprise, according to market sources.

In the secondary market, bank and financial paper was mixed following the Fed rate decision on Wednesday and on Thursday.

Bank of America Corp.’s $3 billion of 3.974% fixed-to-floating notes due Feb. 7, 2030 were unchanged going out on Thursday.

BP Capital Markets America Inc.’s 4.234% notes due Nov. 6, 2028 reopened in February traded 2 bps softer during the session.

Royal Bank of Scotland Group plc’s $2 billion of 4.269% fixed-to-floating senior notes due March 22, 2025 (Baa2/BBB-/A) earlier were quoted softer in the 183 bps area, a market source said.

The notes were priced on Tuesday at par to yield a spread of 185 bps over Treasuries and had tightened 5 bps after issuance. The issue has a fixed rate until June 22, 2024 and then will reset to a floating rate of Libor plus 176.2 bps to but excluding the maturity.

Webster Financial Corp.’s $300 million of 4.1% senior notes due March 25, 2029 (Baa1/BBB/) traded about 2 bps wider than where the notes priced on Wednesday at a spread of 160 bps over Treasuries, according to a market source.

BMO sells two tranches

Bank of Montreal (A1/A+/AA-) priced $2.25 billion of three-year senior medium-term notes in two tranches on Thursday, according to an FWP filing with the Securities and Exchange Commission.

A $500 million tranche of three-year floating-rate notes priced at par to yield Libor plus 57 bps.

The bank sold $1.75 billion of 2.9% three-year fixed-rate notes at 99.746 to yield 2.989%, or a spread of 65 bps over Treasuries.

BMO Capital Markets Corp., BNP Paribas Securities Corp., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

The notes will be bail-inable notes and subject to conversion into common shares of Bank of Montreal or affiliates.

Bank of Montreal is a Montreal-based banking and financial services provider.

Societe Generale prices

Societe Generale priced $1.5 billion of 3.875% five-year notes (Baa2/A/A) on Thursday on top of guidance at a spread of 155 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 170 bps to 175 bps area.

SG Americas Securities LLC, Citigroup Global Markets Inc., JPMorgan, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC were the bookrunners.

Societe Generale is a Paris-based banking and financial services company.

Valero raises $1 billion

Valero Energy priced $1 billion of 4% 10-year senior notes on Thursday at a spread of 155 bps over Treasuries, according to an FWP filing with the SEC.

The notes (Baa2/BBB/BBB) priced at 99.233 to yield 4.094%.

Citigroup, JPMorgan, Mizuho Securities USA Inc., MUFG, Barclays, BofA Merrill Lynch, Scotia Capital (USA) Inc. and Wells Fargo were the bookrunners.

San Antonio-based Valero is an oil refinery owner and operator.

BNG Bank upsizes

BNG Bank (Aaa/AAA/AA+) priced an upsized $300 million reopening of its senior floating-rate notes due March 11, 2022 on Thursday to yield Libor plus 5 bps, according to a market source.

Initial price talk was in the Libor plus 5 bps area.

The offering was upsized from $250 million.

The notes have a coupon of Libor plus 7 bps.

BNG Bank most recently priced a $300 million add-on to the notes on Feb. 12 to yield Libor plus 5 bps.

The issue was originally priced in a $500 million offering on April 5, 2018 at Libor plus 7 bps. The total outstanding is now $1.56 billion.

Citigroup and Scotia Capital were the bookrunners of the Rule 144A- and Regulation S-eligible transaction.

The banking services company, formerly known as Bank Nederlandse Gemeenten NV, is based in the Hague, the Netherlands.

Bank of America flat

Bank of America’s 3.974% fixed-to-floating notes due Feb. 7, 2030 were steady in secondary trading at 128 bps bid, a source said.

The Charlotte, N.C.-based financial services company (A3/A-/A+) priced $3 billion of the notes on Feb. 4 at a spread of Treasuries plus 125 bps. The rate will reset to Libor plus 121 bps after an initial fixed-rate period.

BP Capital eases

BP Capital Markets America’s 4.234% notes due Nov. 6, 2028 eased 2 bps in secondary trading on Thursday to 95 bps bid, according to a market source.

The company (A1/A-/) priced a $1 billion add-on to the notes on Feb. 6 at a Treasuries plus 92 bps spread.

BP Capital Markets America originally sold $1 billion of the 10-year notes on Nov. 1 at par to yield a Treasuries plus 110 bps spread. The total outstanding is $2 billion.

The notes are guaranteed by BP plc.

BP Capital Markets America is a Chicago-based subsidiary of London-based oil and gas company BP.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.