Wells Fargo prices, Kimco upsizes to start shortened week; Wells Fargo notes firm

By Cristal Cody and Aleesia Forni

Virginia Beach, April 14 - Wells Fargo & Co., Kimco Realty Corp. and Connecticut Light and Power Co. came to Monday's primary, kicking off what is expected to be a slow week for the investment-grade bond market.

Wells Fargo priced the largest deal of the session, selling $2.15 billion of senior notes in fixed- and floating-rate tranches due 2019 on Monday, according to a market source.

There was $400 million of floating-rate notes priced at par to yield Libor plus 46 basis points.

A $1.75 billion tranche of 2.125% notes sold at 99.788 to yield 2.17%, or Treasuries plus 57 bps.

Pricing was at the tight end of talk.

Wells Fargo also sold $2 billion of 5.9% $1,000-par fixed-to-floating-rate noncumulative perpetual preferred stock during the session.

The session also saw Kimco Realty price $500 million issue of 3.2% seven-year notes at Treasuries plus 105 bps.

The issue was upsized from $350 million.

In other market action, Connecticut Light and Power priced a $250 million issue of 4.3% 30-year mortgage bonds at 82 bps over Treasuries.

Sources are predicting this week's supply to be limited with earnings season afoot and a shortened week for the bond market due to the Good Friday holiday.

Investment-grade bonds tightened over the day after opening the session mostly flat, sources said.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 69 bps.

Wells Fargo's new fixed-rate notes due 2019 traded 2 bps tighter in the gray market on Monday, a trader said.

Wells Fargo two-parter

Wells Fargo sold $2.15 billion of senior notes (A2/A+/AA-) in fixed- and floating-rate tranches due 2019 on Monday, according to a market source.

There was $400 million of floating-rate notes priced at par to yield Libor plus 46 bps.

A $1.75 billion tranche of 2.125% notes sold at 99.788 to yield 2.17%, or Treasuries plus 57 bps.

Pricing was at the tight end of talk.

Wells Fargo's fixed-rate notes due 2019 were quoted in the gray market over the afternoon at 55 bps bid, 55 bps offered, a trader said.

The bookrunner was Wells Fargo Securities LLC.

Wells Fargo is a San Francisco-based bank.

Kimco upsizes

Kimco Realty sold an upsized $500 million issue of 3.2% seven-year notes (Baa1/BBB+/BBB+) with a spread of Treasuries plus 105 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.8 to yield 3.232%.

The bookrunners were Citigroup Global Markets Inc., UBS Securities LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, including the repayment of borrowings under the company's revolving credit facility due in October 2018 and the pre-funding of near-term maturities, including the $100 million of 5.95% senior notes due June 2014, $194.6 million of 4.82% senior notes due June 2014 and $97.6 million of mortgage debt maturing in 2014.

The real estate investment trust for neighborhood and community shopping centers is based in New Hyde Park, N.Y.

Connecticut sells mortgage bonds

Connecticut Light and Power sold $250 million of 4.3% first and refunding mortgage bonds (A2/A/A), 2014 series A, due April 15, 2044 at 82 bps over Treasuries, according to a market source and an FWP filing with the SEC.

The joint bookrunners were Barclays, Goldman Sachs & Co., Citigroup Global Markets, TD Securities (USA) LLC and U.S. Bancorp Investments Inc.

Proceeds will be used to refinance short-term debt.

The electric subsidiary of Northeast Utilities is based in Berlin, Conn.

Wells Fargo preferreds

Wells Fargo priced a $2 billion offering of 5.9% $1,000-par series S class A fixed-to-floating-rate noncumulative perpetual preferred stock, according to a market source on Monday.

The preferreds will be issued as depositary shares representing a 1/25th interest, the company said in a prospectus filed with the SEC.

Wells Fargo Securities LLC is the bookrunner. Joint lead managers include ANZ Securities Inc., Banca IMI SpA, HSBC Securities (USA) Inc., nabSecurities LLC and RBS Securities Inc.

Dividends will be fixed and payable on the 15th day of June and December through June 15, 2024. After that date, the dividend will begin floating at Libor plus 311 bps and will be payable on the 15th day of March, June, September and December.

The preferreds become redeemable June 15, 2024 at par plus accrued dividends. The San Francisco-based bank can redeem the preferreds prior to that date in whole upon the occurrence of a regulatory capital treatment event.

The call price in that instance is also par plus accrued dividends.

The new securities will not be listed.

Proceeds will be used for general corporate purposes, which may include investments in or advances to subsidiaries and/or debt repayments.

Bank/brokerage CDS fall

Investment-grade bank and brokerage CDS prices declined, according to a market source.

Bank of America Corp.'s CDS costs firmed 2 bps to 66 bps bid, 69 bps offered. Citigroup Inc.'s CDS costs tightened 4 bps to 73 bps bid, 76 bps offered. JPMorgan Chase & Co.'s CDS costs fell 4 bps to 57 bps bid, 60 bps offered. Wells Fargo's CDS costs fell 2 bps to 37 bps bid, 40 bps offered.

Merrill Lynch's CDS costs firmed 2 bps to 70 bps bid, 73 bps offered. Morgan Stanley's CDS costs declined 4 bps to 78 bps bid, 81 bps offered. Goldman Sachs Group, Inc.'s CDS costs tightened 4 bps to 91 bps bid, 94 bps offered.

Stephanie 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.