RBC prices to close frenzied week; Canadian Pacific Rail firms; financial paper soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 27 – Royal Bank of Canada came to the primary on Friday to close out a blockbuster week for investment-grade bonds.

The market saw more than $42 billion of new issuance enter the primary this week, making it the busiest week of 2015 so far.

RBC sold Friday’s lone issue, pricing $1.4 billion of senior notes (Aa3/AA-/AA) due March 6, 2020 in fixed- and floating-rate tranches, according to a market source.

The sale included $550 million of five-year floating-rate notes priced at par to yield Libor plus 52 basis points.

A second tranche was $850 million of 2.15% notes due 2020 sold at 99.901 to yield 2.171%, or Treasuries plus 67 bps.

The note was guided in the low-70 bps area over Treasuries.

Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Societe Generale were the bookrunners.

The financial services company based in Toronto.

Meanwhile, Lipper reported inflows of $1.318 billion into corporate high-grade bond funds for the week ended Feb. 25.

The total was down from last week’s inflows of $2.985 billion, bringing the year-to-date total inflows to $19.484 billion.

Investment-grade bonds were mixed headed into the weekend.

Canadian Pacific Railway Co.’s 2.9% notes due 2025 tightened 4 bps in the secondary market.

Southwestern Energy Co.’s senior notes (Baa3/BBB-/) traded 2 bps to 5 bps weaker over the day.

JPMorgan Chase & Co.’s 3.125% notes due 2025 widened about 6 bps.

Bank of America Corp.’s 4% notes due 2025 were quoted 4 bps softer.

The Markit CDX North American Investment Grade index was unchanged at a spread of 61 bps.

Canadian Pacific Railway firms

Canadian Pacific Railway’s 2.9% senior notes due 2025 tightened 4 bps to 97 bps bid, a market source said.

Canadian Pacific Railway sold $700 million of the notes (Baa1/ BBB+/) on Jan. 28 at a spread of Treasuries plus 112.5 bps.

The railroad operator is based in Calgary, Alta.

Southwestern Energy weaker

Southwestern Energy’s 4.05% notes due 2020 eased 5 bps to 203 bps bid, according to a market source.

The company sold $850 million of the notes on Jan. 20 at 278 bps plus Treasuries.

Southwestern Energy's 4.95% notes due 2025 traded 2 bps weaker late afternoon at 255 bps bid, the source said.

The company sold $1 billion of the notes at 318 bps over Treasuries in the January offering.

Southwestern Energy is a Houston- based independent natural gas and oil company.

JPMorgan soft

JPMorgan Chase’s 3.125% notes due 2025 traded 6 bps weaker at 128 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at a spread of 145 bps plus Treasuries.

The financial services company is based in New York City.

Bank of America eases

Bank of America’s 4% notes due 2025 widened 4 bps over the day to 188 bps bid, according to a market source.

Bank of America sold $2.5 billion of the notes (Baa3/BBB+/) on Jan. 16 at Treasuries plus 225 bps.

The financial services company is based in Charlotte, N.C.

© 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.