Mizuho, TMCC, AmEx Credit revive primary; bank, financial paper firms in secondary

By Aleesia Forni

Virginia Beach, Sept. 18 – Activity in the primary market picked up on Thursday following Wednesday’s Federal Open Market Committee statement.

The session was dominated by financial issuers, with Mizuho Bank Ltd., Toyota Motor Credit Corp., American Express Credit Corp. and Toronto-Dominion Bank pricing new bonds.

The day’s largest new issue came from Mizuho Bank, who sold $2.5 billion of senior notes in four tranches on Thursday.

The offering came at the tight end of price talk, which firmed around 5 basis points to 10 bps from initial guidance.

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

American Express was in the market with a $1 billion two-part offering of three-year notes.

Meanwhile, Toyota Motor Credit priced an upsized $350 million of two-year floating-rate notes at the tight end of initial guidance.

The session also saw Toronto-Dominion Bank come to market with a $1.75 billion covered bond, though details of the sale were unavailable at press time.

Also on Thursday, Freddie Mac passed on its reference notes issuance in September.

The day’s $5.6 billion of new issuance pushes the week’s supply to roughly $19.35 billion, just shy of what sources had expected to be a $20 billion to $25 billion week.

In the secondary, bank and financial paper traded around 1 bp to 2 bps tighter, a market source said.

American Express’s new 1.55% bonds were quoted 2 bps better near the end of the session.

Mizuho’s bonds priced late in the day and were not seen in aftermarket trading.

The recently priced covered bond from Royal Bank of Canada continued to trade better, firming 1 bp on the day.

Mizuho prices tight

Mizuho Bank sold $2.5 billion of senior notes in four tranches on Thursday at the tight end of talk, a market source said.

The bank sold $500 million of three-year floaters at par to yield Libor plus 45 bps.

There was $500 million of 1.7% three-year notes priced at 99.857 to yield 1.749%, or Treasuries plus 65 bps.

A third tranche was $1 billion of 2.65% five-year notes priced at 99.828 to yield 2.687%, or Treasuries plus 85 bps.

Finally, $500 million of 3.6% 10-year notes sold at 99.808 to yield 3.627%, or Treasuries plus 100 bps.

BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC and Mizuho Securities are the bookrunners.

Mizuho Bank is the retail and corporate banking unit of Tokyo-based Mizuho Financial Group Inc.

AmEx two-parter

American Express Credit sold $1 billion of senior notes in two tranches due 2017, an informed source said.

There was $300 million of three-year floaters priced at par to yield Libor plus 30 bps.

A second tranche was $700 million of 1.55% three-year notes priced at 99.866 to yield 1.596%, or Treasuries plus 50 bps.

The notes were quoted at 48 bps bid, 46 bps offered late Thursday.

Barclays, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the bookrunners.

American Express is a New York-based financial services company.

Toyota Motor Credit upsizes

Toyota Motor Credit priced an upsized $350 million of two-year floating-rate notes (Aa3/AA-/) at par to yield Libor plus 10 bps on Thursday, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes sold at the tight end of initial guidance.

Bookrunners were CastleOak Securities, LP, Citigroup Global Markets Inc., Lebenthal & Co., LLC, Mischler Financial Group, Inc., Samuel A. Ramirez & Co., Inc. and Williams Capital Group, LP.

The U.S. funding arm of Toyota is based in Torrance, Calif.

Freddie Mac passes

Freddie Mac announced on Thursday that it would not issue Reference Notes in September, according to a company news release.

The government-sponsored enterprise is based in McLean, Va.

RBC notes firm

Royal Bank of Canada’s recently priced $1.75 billion 2.2% five-year bond was quoted 1 bp better at 40 bps bid on Thursday, a market source said.

The notes (expected: Aaa/AAA/AAA) priced with a spread of Treasuries plus 43.7 bps, or mid-swaps plus 27 bps, on Tuesday.

RBC is a Toronto-based financial services company.

Bank/brokerage CDS costs down

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

Bank of America Corp.’s CDS costs declined 1 bp to 63 bps bid, 66 bps offered. Citigroup Inc.’s CDS costs were 2 bps lower at 61 bps bid, 64 bps offered. JPMorgan Chase & Co.’s CDS costs fell 1 bp to 51 bps bid, 54 bps offered. Wells Fargo & Co.’s CDS costs ended 1 bp lower at 38 bps bid, 43 bps offered.

Merrill Lynch’s CDS costs were 1 bp lower at 65 bps bid, 69 bps offered. Morgan Stanley’s CDS costs ended 1 bp lower at 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.’s CDS costs declined 1 bp to 76 bps bid, 79 bps offered.

Paul Deckelman contributed to this review.

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