KfW, Scentre, Suncoro price; Goldman Sachs does two-part add-on; secondary spreads flat

By Aleesia Forni

Virginia Beach, April 21 – KfW, Goldman Sachs Group Inc., Scentre Group and Suncorp-Metway Ltd. headed to the primary market on Tuesday, while high-grade bond spreads were mostly unchanged on the day.

KfW offered $3 billion of 10-year global notes in line with price talk in the day’s largest new issue.

Goldman Sachs was in Tuesday’s market with a $1.6 billion two-part tap of its existing senior floating-rate notes due April 23, 2020 and Nov. 29, 2023.

Two Australian issuers, Scentre Group and Suncorp-Metway, priced their respective new issues at the tight end of price guidance.

Scentre sold a $1 billion two-part senior notes offer, and Suncorp-Metway priced $600 million of five-year notes.

Blue Cross Blue Shield of Minnesota Inc. attracted an order book that was around 4.5 times oversubscribed for its new $250 million offering of 10-year senior notes.

“Another strong day,” a market source said. “Tomorrow should see similar [new-issue activity].”

Tuesday’s $6.45 billion of supply pushes the week’s total new issuance to $10.05 billion.

International Bank for Reconstruction and Development (World Bank) joined the forward calendar on Tuesday, setting price talk for a planned benchmark issue of three-year notes.

Meanwhile, the Markit CDX North American Investment Grade series 23 index was unchanged at spread of 62 bps.

Blue Cross Blue Shield’s new 10-year notes were quoted around 2 basis points better in the aftermarket near the end of the session.

Scentre Group’s notes were also trading tighter late Tuesday.

KfW global notes

KfW sold $3 billion of 2% 10-year global notes (Aaa/AAA/AAA) on Tuesday at mid-swaps plus 6 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes sold in line with talk set in the mid-swaps plus 6 bps area.

Pricing was at 99.639.

The bookrunners were Deutsche Bank Securities Inc., Nomura and RBC Capital Markets LLC.

The German government-owned development bank is based in Frankfurt.

Goldman Sachs add-on

In other primary happenings on Tuesday, Goldman Sachs Group sold a $1.6 billion two-part tap of its existing senior notes (Baa1/A-/A) due April 23, 2020 and Nov. 29, 2023, according to a market source.

The bank sold an $800 million add-on to its floating-rate note due 2020 at 101.108. The notes carry a coupon of Libor plus 116 bps.

The issue’s total size now sits at $1.3 billion, including $300 million priced on Jan. 20 and $200 million priced on Feb. 13.

A second tranche was an $800 million tap of its notes due 2023 priced at 101.626. The notes have a coupon of Libor plus 160 bps.

The total issue size is now $1.8 billion, including $1 billion priced on Nov. 25, 2013.

Goldman Sachs & Co. was the bookrunner.

The financial services company is based in New York City.

Scentre Group two-parter

Scentre Group sold $1 billion of senior notes (A1/A/) in two tranches on Tuesday, a market source said.

There was $500 million of 2.375% notes due 2021 sold at 99.656 to yield 2.437%, or 110 bps over Treasuries.

Pricing was at the tight end of the Treasuries plus 112.5 bps area guidance.

The notes traded at 109 bps bid late Tuesday.

A $500 million tranche of 3.25% notes due 2025 sold at 99.7 to yield 3.284% with a spread of Treasuries plus 137.5 bps.

Guidance was set in the area of 140 bps over Treasuries.

The notes traded at 133 bps offered on Tuesday.

The company plans to use proceeds to repay debt.

BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Credit Suisse Securities, J.P. Morgan Securities LLC, Scotia Capital and SMBC Nikko were the bookrunners.

Scentre is a Sydney, Australia-based retail property developer and owner.

Suncorp-Metway prices tight

Also on Tuesday, Suncorp-Metway sold $600 million of 2.35% five-year notes (A1/A+/A+) at Treasuries plus 103 bps on Tuesday, according to a market source.

Pricing was at 99.934 to yield 2.364%.

The notes sold at the tight end of guidance set in the 105 bps area over Treasuries.

The company plans to use the proceeds for general corporate purposes.

Citigroup Global Markets, Deutsche Bank Securities, RBC Capital Markets and UBS Securities LLC were the bookrunners.

Suncorp-Metway is a finance, insurance and banking group based in Brisbane, Australia.

BCBSM 10-years

Blue Cross Blue Shield of Minnesota priced $250 million of 3.79% 10-year senior notes (A3/A-/) on Tuesday at 187.5 bps over Treasuries, according to an informed source.

The notes were guided in the low-200 bps area over Treasuries.

Pricing was at 99.991 to yield 3.791%.

In the secondary market, the notes traded around 2 bps better at 185 bps bid.

Bookrunners for the Rule 144A and Regulation S deal were JPMorgan and Wells Fargo Securities LLC.

The company offers health-care plans and resources in Minnesota. It is based in Eagan, Minn.

World Bank sets talk

International Bank for Reconstruction and Development (World Bank) set price talk for a planned benchmark issue of three-year notes (Aaa/AAA/AAA) in the mid-swaps minus 8 bps area on Tuesday, according to an informed source.

Barclays, BMO Capital, Deutsche Bank and Nomura are the bookrunners.

The issuer is based in Washington, D.C.

Bank/broker CDS costs flat

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

Bank of America Corp.’s CDS costs were unchanged at 62 bps bid, 65 bps offered. Citigroup Inc.’s CDS costs were also flat at 71 bps bid, 74 bps offered. JPMorgan Chase & Co.’s CDS costs remained at 59 bps bid, 62 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 40 bps bid, 43 bps offered.

Merrill Lynch’s CDS costs were flat at 64 bps bid, 69 bps offered. Morgan Stanley’s CDS costs were unchanged at 71 bps bid, 74 bps offered. Goldman Sachs Group’s CDS costs were flat at 77 bps bid, 80 bps offered.

Stephanie N. Rotondo contributed to this review.

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