Capital One prices $2 billion; Westpac Banking sells notes; high-grade inflows decline

By Cristal Cody

Tupelo, Miss., Jan. 23 – Investment-grade supply slowed on Thursday with two reported deals in the primary market.

Capital One Bank (USA) NA priced $2 billion of fixed-to-floating-rate notes in two tranches.

Westpac Banking Corp. sold $1.5 billion of 10-year subordinated notes.

More than $17 billion of investment-grade bonds have priced week to date.

About $20 billion to $25 billion of issuance was expected for the short market week.

Investment-grade supply month to date totals more than $100 billion.

Meanwhile, corporate investment-grade fund inflows declined to $4.19 billion for the past week ended Wednesday from $6.62 billion in the previous week and from the record $8.19 billion of inflows in the prior week, according to Lipper US Fund Flows.

Net inflow year to date is more than $19 billion.

The Markit CDX North American Investment Grade 33 index eased nearly 1 basis point to close the day at a spread of 46 bps.

New issues priced this week have traded flat to modestly tighter, a market source said.

Adobe Inc.’s $3.15 billion of fixed-rate notes (A2/A/) brought to the market in four tranches on Wednesday improved about 1 bp to 3 bps.

The San Jose, Calif., computer software and services provider’s $1.3 billion tranche of 2.3% notes due Feb. 1, 2030 firmed to the 56 bps area in the secondary market.

The notes priced at a Treasuries plus 57 bps spread. Initial guidance was in the 80 bps over Treasuries area.

Capital One sells two tranches

Capital One Bank (Baa1/BBB+/A-) priced $2 billion of fixed-to-floating-rate notes in two parts in the offering on Thursday, according to a market source.

A $1.25 billion tranche of 2.014% notes due Jan. 27, 2023 priced at a Treasuries plus 50 bps spread.

The notes were initially talked to price with a spread in the Treasuries plus 65 bps area.

The rate will reset to a floating rate of SOFR plus 61.6 bps after the initial fixed-rate period.

Capital One sold $750 million of 2.28% notes due Jan. 28, 2026 with a 73 bps over Treasuries spread.

Initial talk was in the Treasuries plus 90 bps area.

The rate will convert to a floating rate of SOFR plus 91 bps after the initial fixed-rate period.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC were the bookrunners.

Capital One Bank is a McLean, Va.-based bank.

Westpac Banking prices $1.5 billion

Westpac Banking priced $1.5 billion of 2.894% subordinated notes due Feb. 4, 2030 (A3/BBB+/A+) on Thursday at a spread of Treasuries plus 135 bps, according to a market source.

Initial price talk was in the Treasuries plus low 150 bps area.

The notes will be reset Feb. 4, 2025 to but excluding the the maturity to a fixed rate of Treasuries plus 135 bps.

BofA Securities, Inc., Citigroup, HSBC Securities (USA) Inc., UBS Securities LLC and Westpac Banking Corp. were the bookrunners.

The bank is based in Sydney, Australia.

© 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.