L-Bank brings add-on to floaters due 2015; spreads mostly unchanged; Morgan Stanley widens

By Aleesia Forni

Virginia Beach, April 25 - Landeskreditbank Baden-Wurttemberg-Forderbank (L-Bank) was the sole issuer bringing a new deal to Friday's session, closing a solid week for the high-grade market.

The bank sold a $500 million tap of its existing floating-rate notes due Sept. 14, 2015 at 100.147 to yield Libor plus 2 basis points, according to an informed source.

The issue was upsized from original thoughts of $250 million, and pricing came in line with the Libor plus 2 bps area talk.

Citigroup Inc. also released details during the session of its $750 million of three-year floaters at par to yield Libor plus 52 bps.

More than $21 billion of investment-grade paper priced this week, topping estimates of $15 billion to $20 billion of supply.

In the secondary market, recent deals from SunTrust Banks Inc. and PNC Financial Services Group Inc. traded flat to tighter in the secondary market, a trader said.

Meanwhile, Morgan Stanley & Co. Inc.'s $3 billion of 3.875% 10-year notes, which priced on Wednesday, traded 1 bp wider.

In other news on Friday, Standard & Poor's noted that its investment-grade composite spread tightened by 1 bp to 144 bps in April.

SunTrust firms

SunTrust's $650 million of 2.5% notes (Baa1/BBB/BBB+) due 2019, which sold at Treasuries plus 80 bps on Thursday, traded 1 bp tighter Friday.

A trader quoted the issue at 79 bps bid, 77 bps offered.

The notes were quoted at 80 bps bid, 77 bpd offered late Thursday.

Barclays, Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. were the bookrunners.

SunTrust is an Atlanta-based financial services company.

PNC flat

PNC Financial's recent $750 million sale of subordinated notes (Baa1/BBB+/A) due 2024 traded flat at 122 bps bid, 121 bps offered, a trader said.

The notes priced with a spread of Treasuries plus 125 bps on Wednesday.

Goldman Sachs & Co., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and PNC Capital Markets LLC were the joint bookrunners.

PNC is a Pittsburgh-based bank and holding company.

Morgan Stanley widens

Morgan Stanley's $3 billion of 3.875% 10-year notes, which priced on Wednesday with a spread of Treasuries plus 130 bps, traded at 132 bps bid, 130 bps offered.

The notes were quoted at 131 bps bid, 130 bps offered shortly after issuance.

Morgan Stanley & Co. LLC was the bookrunner for the New York City-based financial services company's deal.

Citi details sale

Citigroup priced $750 million of floating-rate senior notes (Baa2/A-/A) due May 1, 2017 at par to yield Libor plus 52 bps, according to a FWP filing with the Securities and Exchange Commission.

Citigroup Global Markets Inc. was the bookrunner.

The bank is based in New York.

S&P reports on April

In a report released on Friday, Standard & Poor's said that its investment-grade composite spread contracted by 1 bp to 144 bps on Friday. By rating, the 'AA' spread remained flat at 98 bps, the 'A' spread was unchanged at 120 bps and the 'BBB' spread was flat at 175 bps.

Banks were flat at 192 bps. Financial institutions also remained flat at 168 bps. Utilities were unchanged at 146 bps.

Industrials and telecommunications tightened by 1 bp each to 193 bps and 250 bps, respectively.

The S&P report also says that the investment-grade composite spread is below its one-year moving average of 173 bps and its five-year moving average of 200 bps.

Bank/brokerage CDS higher

Investment-grade bank and brokerage CDS prices were higher on Thursday, according to a market source.

Bank of America Corp.'s CDS costs widened 3 bps to 64 bps bid, 67 bps offered. Citigroup Inc.'s CDS costs increased 1 bp to 69 bps bid, 73 bps offered. JPMorgan Chase & Co.'s CDS costs widened 2 bps to 56 bps bid, 60 bps offered. Wells Fargo & Co.'s CDS costs were also 2 bps wider at 34 bps bid, 38 bps offered.

Merrill Lynch's CDS costs increased 3 bps to 69 bps bid, 73 bps offered. Morgan Stanley's CDS costs increased 1 bp to 73 bps bid, 77 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 1 bp to 84 bps bid, 87 bps offered.

Stephanie Rotondo contributed to this review

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