HSBC Bank Canada prices; Kommuninvest eyes deal; Barclays, Marriott ease; Kroger mixed

By Cristal Cody

Tupelo, Miss., Nov. 20 – Corporate investment-grade issuance quieted on Tuesday, with HSBC Bank Canada tapping the market with a $750 million inaugural issuance of mortgage covered bonds.

Stocks remained weak along with investment-grade credit spreads.

The Markit CDX North American Investment Grade 31 index eased about 3 basis points to close at a spread of 79 bps.

Coming up on Wednesday, Kommuninvest I Sverige AB plans to bring a dollar-denominated offering of notes to the market.

Otherwise, light activity is expected over the remainder of the Thanksgiving Day holiday week.

The bond markets will be closed on Thursday and will close at 2 p.m. ET on Friday for the holiday.

About $5 billion to $10 billion of investment-grade volume was expected by syndicate sources for the week.

On Monday, Takeda Pharmaceutical Co., Ltd. priced $5.5 billion of senior notes in four tranches, while Wisconsin Public Service Corp. sold $400 million of three-year senior notes and GATX Corp. priced a $100 million reopening of three-year floating-rate notes.

The session was “likely the busiest day for the primary market during this Thanksgiving week,” BofA Merrill Lynch analysts said in a note released on Tuesday.

In the secondary market, bank and financial paper traded mostly flat to softer on the day.

Barclays plc’s 4.61% fixed-to-floating rate notes due Feb. 15, 2023 that priced on Nov. 7 softened about 9 bps.

In other new issue trading, Marriott International Inc.’s 4.15% senior notes due Dec. 1, 2028 that priced a week ago widened about 10 bps on Tuesday.

Also, Kroger Co.’s senior notes (Baa1/BBB/BBB-) traded flat to about 8 bps wider during the session.

Kroger announced on Monday that it will build a $55 million robotic warehouse in Cincinnati along with 19 other high-tech customer fulfillment centers to compete in the grocery delivery business.

Energy names also were weaker in secondary trading, a source said.

HSBC Canada prices

HSBC Bank Canada sold $750 million of 3.3% three-year mortgage covered bonds (Aaa//AAA) on Tuesday on top of talk at mid-swaps plus 33 bps, or a Treasuries plus 50.7 bps spread, according to a market source.

The bonds are the first issuance of a new C$3.5 billion mortgage covered bond program.

Bookrunners included CIBC World Markets Corp., Commerz Markets LLC, HSBC Bank plc, Lloyds Securities Inc., Natixis Securities Americas LLC, ING Financial Markets LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and UniCredit Capital Markets LLC.

The Vancouver, B.C.-based firm is the Canadian subsidiary of London-based banking and financial services group HSBC Holdings plc.

Kommuninvest offers notes

Kommuninvest I Sverige (Aaa/AAA) plans to sell dollar-denominated long three-year notes in a Rule 144A and Regulation S offering on Wednesday, according to a market source.

The notes were initially talked to price in the mid-swaps plus 7 bps area.

BNP Paribas Securities Corp., Barclays, Citigroup Global Markets Inc. and Nomura Securities International, Inc are the bookrunners.

Kommuninvest is an Orebro-based company that offers funding to municipalities of Sweden.

Barclays softens

Barclays’ 4.61% fixed-to-floating rate notes due Feb. 15, 2023 headed out on Tuesday about 9 bps wider at 201 bps bid in secondary trading, a market source said.

The notes (Baa3/BBB/A) were quoted on Thursday at 187 bps bid.

Barclays sold $1.75 billion of the notes on Nov. 7 at a spread of 160 bps over Treasuries.

The financial services company is based in London.

Marriott widens

Marriott International’s 4.15% notes due Dec. 1, 2028 eased about 10 bps on Tuesday to 178 bps bid, according to a market source.

The notes (Baa2/BBB) headed out on Friday at 165 bps bid, 160 bps offered.

Marriott priced $300 million of the notes as part of a $1.2 billion three-part offering on Nov. 13 at a Treasuries plus 155 bps spread.

The lodging company is based in Bethesda, Md.

Kroger mostly soft

Kroger’s 3.7% notes due 2027 were unchanged at 144 bps bid in the secondary market on Tuesday, a source said.

The notes have widened since trading in early August at 126 bps bid.

Kroger sold $600 million of the notes on July 17, 2017 at a Treasuries plus 140 bps spread.

The grocery retailer is based in Cincinnati.

© 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.