Bed Bath & Beyond, TD Bank, Scotiabank price; Bed Bath & Beyond, new bank paper firms

By Aleesia Forni and Cristal Cody

Virginia Beach, July 14 – Bed Bath & Beyond Inc. joined a handful of financial issuers heading to Monday’s primary market.

The Union N.J.-based chain of retail stores sold a $1.5 billion offering of senior notes in three tranches, all pricing at the tight end of talk.

A source noted that the deal’s orderbook was more than six times oversubscribed.

The session also saw Canadian banks Bank of Nova Scotia and Toronto-Dominion Bank price new bond offerings.

Scotiabank brought to market a two-part $1.75 billion offering of notes, while TD Bank sold $1.25 billion of two-year floaters.

Both offerings priced at the tight end of talk.

In other primary action, Deutsche Bank AG, London branch sold a smaller-sized add-on to its existing notes due 2017.

The market saw a positive tone to kick off the week, with around $4.5 billion of high-grade paper pricing during the session.

Sources are expecting around $20 billion of supply for this week, an increase from last week, which saw roughly $12 billion of new issuance.

Investment-grade bond spreads narrowed at the open of Monday’s session and remained tighter over the day, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 basis point to a spread of 57 bps after ending flat on Friday.

The three tranches of notes brought by Bed Bath & Beyond all tightened in aftermarket trading, a source said.

New paper from the two Canadian banks in the U.S. market on Monday traded better, a trader said.

Toronto-Dominion’s new floaters tightened 3 bps on the offered side.

Bank of Nova Scotia’s two-part offering of notes firmed, with the short-dated tranche offered nearly 10 bps tighter, a trader said.

Bed Bath brings $1.5 billion

Monday’s sole high-grade corporate new issue was priced by Bed Bath & Beyond.

The company priced a $1.5 billion three-part offering of senior notes (Baa1/A-/), according to a market source.

All three tranches of the offering priced at the tight end of talk, the source added.

There was $300 million of 3.749% 10-year notes at 120 bps over Treasuries and $300 million of 4.915% 20-year bonds sold with a spread of Treasuries plus 155 bps.

A $900 million tranche of 5.165% 30-year bonds priced at 180 bps over Treasuries.

Bed Bath & Beyond’s notes due 2024 firmed to 118 bps bid, 112 bps offered in the secondary market, a trader said.

The company’s tranche of notes due 2034 tightened to 150 bps bid.

The bonds due 2044 traded late afternoon better at 176 bps bid, 172 bps offered, according to the trader.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used for share repurchases of common stock and for general corporate purposes.

The chain of retail stores is based in Union, N.J.

Scotiabank prices tight

In other market action on Monday, Bank of Nova Scotia priced $1.75 billion of senior notes (Aa2/A /AA-) in three- and seven-year tranches, according to a market source.

The sale included $750 million of 1.3% three-year notes priced at 99.93 to yield 1.324%, or Treasuries plus 38 bps.

A second tranche was $1 billion of 2.8% seven-year notes sold with a spread of Treasuries plus 68 bps.

Pricing was at 99.767 to yield 2.837%.

Bank of Nova Scotia’s notes due 2017 headed out tighter in aftermarket trading at 29 bps offered, a trader said.

The notes due 2021 firmed to 66 bps offered in the secondary market.

The bookrunners were BofA Merrill Lynch, Scotia Capital (USA) Inc., Barclays, Deutsche Bank Securities Inc. and JPMorgan.

Proceeds will be added to the bank's funds and used for general corporate purposes.

The financial services company has its principal offices in Halifax, N.S.

TD Bank sells floaters

Another Canadian financial, Toronto-Dominion Bank, was also in Monday’s market with a $1.25 billion offering of floating-rate senior medium-term notes (Aa1/AA-/) due 2016, a market source said.

The notes sold at the tight end of talk at par to yield Libor plus 17 bps.

TD Bank’s floating-rate notes due 2016 firmed to 16 bps bid, 14 bps offered in the secondary market, according to a trader.

TD Securities (USA) LLC and Morgan Stanley were the joint bookrunners.

Proceeds will be added to the company’s general funds and be used for general corporate purposes.

The financial services and banking company is based in Toronto.

Deutsche Bank add-on

Rounding out the day’s new deals, Deutsche Bank AG, London Branch sold a $50 million add-on to its existing senior notes due May 30, 2017 at 100.122, according to an FWP filing with the Securities and Exchange Commission.

The notes have a coupon of Libor plus 47 bps.

The issue’s total size is now $550 million, including $500 million priced at par on May 22.

Deutsche Bank Securities was the lead manager.

The financial services company is based in Frankfurt.

Bank/brokerage CDS costs lower

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

Bank of America Corp.’s CDS costs ended 2 bps lower at 69 bps bid, 72 bps offered. Citigroup Inc.’s CDS costs fell 3 bps to 66 bps bid, 69 bps offered. JPMorgan Chase & Co.’s CDS costs declined 3 bps to 54 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs tightened 1 bp to 43 bps bid, 48 bps offered.

Merrill Lynch’s CDS costs closed 1 bp tighter at 73 bps bid, 77 bps offered. Morgan Stanley’s CDS costs ended 3 bps lower at 69 bps bid, 72 bps offered. Goldman Sachs Group, Inc.’s CDS costs were also 3 bps lower at 73 bps bid, 78 bps offered.

Paul Deckelman contributed to this review.

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