MUFG prices $4.6 billion; Bank of America sells preferreds; World Bank in deal pipeline

By Cristal Cody

Tupelo, Miss., July 17 – High-grade bank and financial issuance continued on Tuesday with new deals from Mitsubishi UFJ Financial Group, Inc. and Bank of America Corp.

Mitsubishi UFJ Financial Group tapped the primary market with a $4.6 billion six-part offering of senior notes.

Bank of America priced $854 million of 5.875% $25-par perpetual preferred shares on Tuesday in an offering that was upsized from $250 million, a source said.

Coming up on Wednesday, the International Bank for Reconstruction and Development, or World Bank, plans to price notes in its first benchmark-sized dollar-denominated offering of the year, a source said.

Financial supply is expected to dominate primary action over the week following the release of earnings reports.

On Monday, JPMorgan Chase & Co., Wells Fargo Bank NA, Citigroup Inc., Citibank, NA and Banque Federative du Credit Mutuel priced more than $15 billion of notes.

About $25 billion of supply is expected this week, according to syndicate sources.

In other activity on Tuesday, Freddie Mac announced that it will forgo an offering of reference notes in July.

The Markit CDX North American Investment Grade 30 index ended about 0.5 basis point tighter on Tuesday at a spread of 60.4 bps.

MUFG prices six tranches

Mitsubishi UFJ Financial Group priced $4.6 billion of senior notes (A1/A/A) in six tranches during the session, according to a market source.

The company sold $750 million of three-year floating-rate notes at Libor plus 65 bps.

Mitsubishi UFJ Financial Group priced $750 million of 3.535% three-year fixed-rate notes at a spread of Treasuries plus 85 bps.

The $800 million tranche of five-year floating-rate notes priced at Libor plus 86 bps, while the $1 billion of 3.761% five-year fixed-rate notes priced with a spread of Treasuries plus 100 bps.

Mitsubishi priced a $800 million reopening of its 3.961% notes due March 2, 2028 at a Treasuries plus 120 bps spread.

The company originally sold $500 million of the 10-year notes on Feb. 26 at par to yield a spread of Treasuries plus 110 bps. The total outstanding now is $1.3 billion.

In the final tranche, Mitsubishi UFJ Financial sold $500 million of 4.286% 20-year notes with a spread of 132 bps over Treasuries.

MUFG and J.P. Morgan Securities LLC were the bookrunners for the three- and 10-year notes. Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. were the bookrunners for the five- and 20-year notes.

The bank is based in Tokyo.

World Bank eyes deal

Coming up on Wednesday, the International Bank for Reconstruction and Development plans to price a benchmark-sized dollar-denominated offering of global notes due July 23, 2021 (Aaa/AAA/AAA), according to a market source.

The notes are initially talked to price with a spread in the mid-swaps minus 3 bps area.

BofA Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities and Morgan Stanley are the bookrunners.

The global development financing cooperative is based in Washington, D.C.

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