Bank of America, BMO, Equifax, Howmet price; Kommuninvest, Bank of England offer notes

By Cristal Cody

Tupelo, Miss., April 22 – A handful of high-grade issues priced in the primary market on Wednesday, led by new bank paper.

Bank of America Corp. priced $3 billion of fixed-to-floating-rate senior notes due 2031.

Bank of Montreal sold $1.5 billion of five-year senior medium-term notes.

Equifax Inc. brought $1 billion of senior notes in two tranches to the market.

Also during the session, Howmet Aerospace Inc. priced an upsized $1.2 billion of split-rated five-year senior notes (Ba3/BBB-/BBB-) at par to yield 6.875%, compared to initial talk in the 7.75% area. The notes came at a spread of 651 basis points over Treasuries.

Investment-grade issuers have priced more than $16 billion of bonds week to date with supply slowing from the record volumes seen throughout March and the first week of April.

About $40 billion to as much as $60 billion of issuance was expected by market participants for the week.

Sovereign, supranational and agency supply is in the pipeline for Thursday’s session.

Market tone was mixed at the start of the day but improved over the afternoon as stocks gained.

The Markit CDX North American Investment Grade 33 index tightened about 3 bps to a spread of 94.9 bps on Wednesday.

The iShares iBoxx Investment Grade Corporate Bond ETF edged 0.06% lower in early trading but closed up 0.6% at 129.44

The PIMCO Investment Grade Corporate Bond Index ETF finished off 0.15% at 109.87 after opening down 0.42%.

New issues are trading flat to modestly better than issuance, a market source said.

VF Corp.’s $3 billion of senior notes (A3/A/) priced in four tranches on Tuesday improved about 8 bps across all four tranches.

The company sold $1 billion of 2.05% notes due April 23, 2022 at a spread of 185 bps over Treasuries. Initial talk was in the 195 bps area.

VF priced $750 million of 2.4% notes due April 23, 2025 at a Treasuries plus 210 bps spread.

The five-year notes were talked at the 220 bps spread area.

A $500 million tranche of 2.8% notes due April 23, 2027 priced at a spread of 235 bps over Treasuries, compared to initial guidance in the 250 bps over Treasuries area.

VF also sold $750 million of 2.95% notes due April 23, 2030 at a Treasuries plus 240 bps spread.

The 10-year notes were initially talked to print at the 255 bps spread area.

Bank of America prices $3 billion

Bank of America priced $3 billion of 2.592% medium-term fixed-to-floating-rate senior notes due April 29, 2031 (A2/A-/A+) on Wednesday at a spread of Treasuries plus 197 bps, according to a market source.

Initial price talk was in the Treasuries plus 225 bps area with guidance tightened to a 200 bps spread.

The rate on the notes will convert after the fixed-rate period to a floating rate of SOFR plus 215 bps.

BofA Securities, Inc. was the bookrunner.

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

BMO raises $1.5 billion

Bank of Montreal (Aa2/A+/AA-) sold $1.5 billion of 1.85% five-year senior medium-term notes at a spread of 150 bps over Treasuries during the session, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial price talk was in the Treasuries plus 175 bps spread area.

The notes were sold at 99.924 to yield 1.866%.

BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

The bank is based in Montreal.

Equifax prints $1 billion

Equifax priced $1 billion of senior notes (Baa2/BBB/) in two tranches on Wednesday, according to a market source and an FWP filing.

A $400 million offering of 2.6% notes due Dec. 15, 2025 priced at 99.888 to yield 2.621%, or a Treasuries plus 225 bps spread.

The long five-year tranche was talked to print in the 275 bps over Treasuries area.

Equifax sold $600 million of 3.1% 10-year notes at 99.81 to yield 3.122%. The notes priced at a Treasuries plus 250 bps spread.

Initial price talk was at the 300 bps spread area.

BofA Securities, J.P. Morgan, Wells Fargo Securities LLC, Mizuho Securities USA Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners.

Atlanta-based Equifax is an information technology provider that collects and organizes credit, financial, public record, demographic and marketing information on individuals and businesses.

SSA supply on tap

Coming up on Thursday, the Bank of England plans to price $2 billion of notes due April 28, 2023 (Aa2/AA/AA) in a Rule 144A and Regulation S offering, according to a market source.

Initial price talk is in the Treasuries plus 32 bps area.

BofA Securities, HSBC Securities (USA) Inc., RBC Capital Markets, LLC and TD Securities (USA) LLC are the bookrunners.

London-based Bank of England is the central bank of the United Kingdom.

In addition, Kommuninvest I Sverige AB (Aaa/AAA/) is expected to bring $1 billion of notes due Feb. 2, 2022 in a Rule 144A and Regulation S transaction on Thursday, according to an informed source.

Initial price talk is in the mid-swaps plus 20 bps area.

BofA Securities, Barclays, SEB Securities, Inc. and TD Securities are the bookrunners.

Kommuninvest is an Orebro-based company that offers funding to municipalities of Sweden.

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