Yankees dominate session; Societe Generale sells perpetuals; Oracle mixed; Apple widens

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 22 – The investment-grade primary market saw a dramatic slowdown on Tuesday, with many issuers staying on the sidelines in the face of a steep drop in stocks and weaker market conditions.

A trio of Yankee financials brought $2.65 billion to market during the session following the blockbuster $17.35 billion day on Monday.

Societe Generale SA was the highlight of the quiet trading day, pricing $1.25 billion of perpetual tier 1 notes tight of initial price thoughts.

Meanwhile, Nordic Investment Bank sold $1 billion of five-year notes at the tight end of talk, and International Finance Corp. priced an upsized tap of its existing floating-rate bonds.

BHP Billiton plc and International Bank for Reconstruction and Development (World Bank) were also in the primary announcing new deal plans.

The Markit CDX North American Investment Grade 25 index ended the day 2 basis points wider at a spread of 83 bps.

AT&T Inc.’s bonds (/BBB+/A-) headed out mostly unchanged on Tuesday.

Oracle Corp.’s senior notes (A1/AA-/A+) were mixed in the secondary market.

Apple Inc.’s bonds (Aa1/AA+) traded 3 bps wider.

Societe Generale perpetuals

Societe Generale entered Tuesday’s primary with a $1.25 billion issue of perpetual tier 1 notes at par to yield 8%, a market source said.

The notes (Ba2/BB+) sold at the tight end of guidance set in the 8.125% area, having firmed from initial price thoughts in the range of 8.125% to 8.25%.

The notes will be non-callable for 10 years.

Societe Generale, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities and Morgan Stanley & Co. LLC are the bookrunners for the Rule 144A and Regulation S sale.

The financial services company is based in Paris.

NIB prices tight

Also on Tuesday, Nordic Investment Bank priced $1 billion of 1.5% five-year notes (Aaa/AAA) on Tuesday at the tight end of guidance at mid-swaps plus 6 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The Helsinki, Finland-based financier sold the notes at 99.669.

Guidance was in the mid-swaps plus 7 bps area.

J.P. Morgan Securities LLC, RBC Capital Markets LLC and TD Securities are the bookrunners.

IFC add-on prices

Rounding out the day’s new issues, International Finance priced an upsized $400 million add-on to its existing floating-rate notes (Aaa/AAA) due Dec. 15, 2020 to yield Libor plus 3 bps, a market source said.

The notes carry a coupon of Libor plus 1 bp and priced in line with talk.

BofA Merrill Lynch, Barclays and BMO Capital Markets Corp. are the banks on the deal.

The World Bank member and lender to the private sector in developing countries is based in Washington, D.C.

BHP roadshow

In forward calendar news, BHP Billiton (A1/A+) announced plans to begin a roadshow on Monday ahead of a possible issuance of a multi-currency hybrid capital instrument to investors, according to a market source and a company news release.

The investor meetings will take place in Europe, Asia and the United States.

Proceeds will be used for general corporate purposes, including refinancing debt.

Barclays, Goldman Sachs & Co., BofA Merrill Lynch and BNP Paribas Securities Corp. are the bookrunners.

The diversified natural resources company is based in Melbourne, Australia.

World Bank price talk

Washington, D.C.-based World Bank set talk for a benchmark offering of two-year floating-rate global notes (Aaa/AAA/AAA) in the Libor flat area, a market source said.

Bookrunners for the issue are BMO Capital Markets, Credit Suisse and Goldman Sachs & Co.

Bank/brokerage CDS costs rise

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

Bank of America Corp.’s CDS costs rose 3 bps to 78 bps bid, 83 bps offered. Citigroup Inc.’s CDS costs were 2 bps higher at 85 bps bid, 90 bps offered. JPMorgan Chase & Co.’s CDS costs were also 2 bps higher at 79 bps bid, 82 bps offered. Wells Fargo & Co.’s CDS costs increased 2 bps to 58 bps bid, 63 bps offered.

Merrill Lynch’s CDS costs were up 3 bps at 81 bps bid, 86 bps offered. Morgan Stanley’s CDS costs ended 3 bps higher at 86 bps bid, 89 bps offered. Goldman Sachs Group, Inc.’s CDS costs increased 2 bps to 95 bps bid, 97 bps offered.

AT&T notes stable

AT&T’s 3.4% notes due 2025 headed out mostly unchanged from Monday at 173 bps bid, a market source said.

The company sold $5 billion of the notes on April 23 at 150 bps over Treasuries.

AT&T’s 4.75% bonds due 2046 were flat at 223 bps bid in secondary trading over the day.

AT&T sold $3.5 billion of the bonds in the April 23 offering at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Oracle mixed

Oracle’s 2.95% notes due 2025 eased 3 bps in secondary trading to 121 bps bid on Tuesday, a market source said.

Oracle sold $2.5 billion of the notes on April 28 at a spread of 100 bps over Treasuries.

Oracle’s 4.125% bonds due 2045, which were quoted 1 bp to 2 bps tighter earlier in the day, headed out flat at 147 bps bid.

Oracle sold $2 billion of the bonds in the April 28 offering at Treasuries plus 145 bps.

The computer software and technology company is based in Redwood City, Calif.

Apple eases

Apple’s 3.2% notes due 2025 eased 3 bps on Tuesday to 104 bps bid, a market source said.

The company sold $2 billion of the notes on May 6 at a spread of Treasuries plus 100 bps.

Apple’s 4.375% notes due 2045 were quoted at 145 bps bid, wider than where the notes traded on Monday at 142 bps bid.

The company priced $2 billion of the bonds in the May 6 sale at 140 bps over Treasuries.

The computer and mobile communications device company is based in Cupertino, Calif.

Stephanie N. Rotondo contributed to this review

© 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.