Saudi Arabia, Wells Fargo, Morgan Stanley price bonds; bank, financial paper mixed; Nike firms

By Cristal Cody

Eureka Springs, Ark., Oct. 19 – Several U.S. issuers priced high-grade deals over Wednesday’s session with the bulk of the market’s attention focused on the Kingdom of Saudi Arabia’s $17.5 billion three-tranche notes offering.

Wells Fargo & Co. priced $3.5 billion of 10-year senior notes on Wednesday following the deal’s delay on Tuesday.

S&P announced on Tuesday that it revised its outlook on the company to negative from stable based on concerns of fallout from the company’s September news reports of retail accounts misconduct.

Morgan Stanley sold $2.5 billion of seven-year senior floating-rate notes at par on Wednesday.

Bank and financial paper was expected to make up a chunk of the $25 billion of supply estimated for the week.

Also on Wednesday, United Parcel Service, Inc. tapped the high-grade primary market with a $1 billion offering of 10- and 30-year senior notes.

Morgan Stanley’s existing 10-year paper traded 2 basis points to 5 bps weaker on Wednesday.

Wells Fargo’s existing notes traded flat to about 4 bps tighter over the day, a source said.

In earlier secondary trading, Bank of America Corp.’s senior notes (Baa1/BBB+/A) brought to market on Tuesday traded about 1 bps to 5 bps better on Wednesday.

Nike, Inc.’s $1.5 billion of notes (A1/AA-/) priced in two tranches on Tuesday traded about 2 bps tighter.

The Markit CDX North American Investment Grade index tightened 1 bp over the day to end at a spread of 74 bps.

Saudis bring $17.5 billion

Saudi Arabia priced a combined $17.5 billion of notes in five-, 10- and 30-year tranches (expected ratings: A1//AA-) on Wednesday, according to an informed source.

The $5.5 billion 2 3/8% notes due 2021 priced at 99.007 to yield 2.588%, or Treasuries plus 135 bps, following talk in the 160 bps area.

The $5.5 billion 3¼% notes due 2026 priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, following talk in the 185 bps area.

The $6.5 billion 4½% notes due 2046 priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, following talk in the Treasuries plus 235 bps area.

Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG, Morgan Stanley and NCB Capital were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general domestic budgetary purposes.

Wells Fargo prices $3.5 billion

Wells Fargo priced $3.5 billion of 3% 10-year senior notes on Wednesday with a spread of 130 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.769 to yield 3.027%.

Wells Fargo Securities, LLC was the bookrunner.

The notes priced tighter than initial price thoughts in the 140 bps to 145 bps plus Treasuries area, according to a market source.

Proceeds from the offering will be added to Wells Fargo’s general funds and will be available for general corporate purposes.

The retail, commercial and corporate banking services provider is based in San Francisco.

Morgan Stanley’s $2.5 billion

Morgan Stanley sold $2.5 billion of seven-year senior floating-rate notes (A3/BBB+/A) at par to yield Libor plus 140 bps on Wednesday, according to an FWP filing with the SEC.

Morgan Stanley & Co. LLC was the bookrunner for the series F global medium-term notes.

The financial services company is based in New York City.

UPS prices $1 billion

United Parcel Service priced $1 billion of fixed-rate notes (A1/A+/) in two tranches on Wednesday, according to a market source.

The company sold $500 million of 2.4% 10-year notes with a spread of Treasuries plus 65 bps.

UPS priced $500 million of 3.4% 30-year notes at 93 bps over Treasuries.

Both tranches priced on the tight side of guidance.

BofA Merrill Lynch, Goldman Sachs & Co., Morgan Stanley, UBS Investment Bank, Citigroup Global Markets Inc. and Wells Fargo were the bookrunners.

The company also priced a €500 million euro-denominated offering of 1% senior notes due Nov. 15, 2028 on Wednesday.

Proceeds from both sales will be used to repay commercial paper and for general corporate purposes, according to a 424B5 filed with the Securities and Exchange Commission.

The package delivery and supply chain management company is based in Atlanta.

Morgan Stanley eases

Morgan Stanley’s existing 3.125% notes due 2026 (A3/BBB+/A) eased 5 bps to 141 bps bid on Wednesday, according to a market source.

Morgan Stanley sold $3 billion of the notes on July 20 at a spread of 163 bps over Treasuries.

The financial services company is based in New York City.

Bank of America firms

Bank of America’s new 3.248% notes due 2027 were quoted at 145 bps offered earlier on Wednesday in the secondary market, a source said.

The bank priced $2.5 billion of the notes on Tuesday at a spread of 150 bps over Treasuries.

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

Nike improves

Nike’s 2.375% notes due 2026, priced in a $1 billion tranche at Treasuries plus 65 bps on Tuesday, traded early Wednesday at 63 bps offered, according to a market source.

Nike’s 3.375% notes due 2046 firmed to 91 bps offered in the secondary market.

Nike sold $500 million of the bonds on Tuesday at a 93 bps spread over Treasuries.

The sports footwear and apparel company is based in Beaverton, Ore.

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