Volkswagen, BNY Mellon price amidst cautious market tone; BNY, Corning firm on offered side

By Cristal Cody and Aleesia Forni

Virginia Beach, Nov. 13 - Volkswagen International Finance NV, Corning Inc. and Bank of New York Mellon Corp. priced new deals during a session that saw a "somewhat cautious tone" on Wednesday.

The largest deal came from Volkswagen, which sold a $2.15 billion issue of senior notes in four tranches in a Rule 144A and Regulation S deal.

All four tranches were sold at the tight end of talk.

The deal included $400 million of two-year floaters sold at par to yield Libor plus 33 basis points and $750 million of three-year floating-rate notes sold at par to yield Libor plus 44 bps.

A $500 million tranche of 1.125% three-year notes due 2016 sold at Treasuries plus 55 bps.

There was also $500 million of 2.125% five-year notes priced with a spread of Treasuries plus 75 bps.

Also on Wednesday, BNY Mellon sold an upsized $1.2 billion sale of senior notes in two tranches due 2019 and 2025.

The sale included $800 million of 2.1% long five-year notes priced at Treasuries plus 73 bps and $400 million of 3.95% 12-year senior notes priced at 125 bps over Treasuries.

Meanwhile, Corning sold $250 million of 3.7% 10-year notes during the session at Treasuries plus 100 bps.

FMS Wertmanagement was also in the market on Wednesday with $2 billion of 1.625% five-year senior notes sold at mid-swaps plus 13 bps.

In other market news, Federal Home Loan Banks set talk for its planned $3 billion offering of three-year global bonds at Treasuries plus 14 bps.

The bond is expected to price on Thursday.

Thursday's primary market is expected to look "a lot like today," one market source said on Wednesday.

"May see a handful [of new issues]," the source added.

The week's supply has reached $11 billion so far, shy of earlier estimates of $15 billion to $20 billion of new issuance for the shortened week.

Investment-grade bonds traded better over the afternoon, according to informed sources.

The Markit CDX North American Investment Grade series 21 index firmed 1 bp to a spread of 72 bps.

In the secondary market, Corning's 3.7% senior notes tightened on the offered side in late day trading, a source said.

BNY Mellon's 3.95% notes due 2025 also firmed on the offered side.

Volkswagen prices tight

Volkswagen International Finance brought a $2.15 billion issue of senior notes (A3/A-/) to market during the session on Wednesday, according to an informed source.

All four tranches were sold at the tight end of talk.

The company priced $400 million of two-year floaters at par to yield Libor plus 33 bps.

A $750 million tranche of floating-rate notes due 2016 was sold at par to yield Libor plus 44 bps.

There was also a $500 million tranche of 1.125% notes due 2016 priced with a spread of Treasuries plus 55 bps, or 99.956, to yield 1.14%.

Finally, $500 million of 2.125% five-year senior notes priced at Treasuries plus 75 bps.

The notes sold at 99.896 to yield 2.147%.

Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC were the joint bookrunners.

The financing arm of Volkswagen is based in Amsterdam.

FMS five-years

FMS Wertmanagement priced $2 billion of 1.625% five-year senior notes (Aaa/AAA/AAA) with a spread of mid-swaps plus 13 bps on Wednesday, according to a market source and an FWP filed with the Securities and Exchange Commission.

Pricing was at 99.838 to yield 1.659%.

The notes priced at the tight end of talk, which was set in the area of mid-swaps plus 15 bps.

The company was last in the market with $1.5 billion of 1.125% senior notes due 2016 priced at 26 bps over Treasuries on Sept. 11.

Deutsche Bank AG, London Branch, HSBC Bank plc, J.P. Morgan Securities plc and Morgan Stanley & Co. International plc were the joint lead managers.

The financial services company is based in Munich.

BNY two-parter

The session also saw BNY Mellon price an upsized $1.2 billion two-part sale of senior medium-term notes, series G, according to a market source and two separate FWP filings with the SEC.

The notes (Aa2/A+/AA-) were sold in tranches due 2019 and 2025.

BNY Mellon priced $800 million of 2.1% notes due 2019 with a spread of Treasuries plus 73 bps, or 99.875, to yield 2.126%.

The notes priced at the tight end of talk.

A $400 million tranche of 3.95% 12-year senior notes sold in line with price talk at 125 bps over Treasuries.

Pricing was at 99.763 to yield 3.975%.

In the secondary market, BNY Mellon's tranche of 3.95% notes due 2025 were offered at 122 bps, a trader said.

The bookrunners were BNY Mellon Capital Markets LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley.

The New York-based financial services company was last in the U.S. bond market with a $100 million of five-year floaters priced with a spread of Libor plus 50 bps on Aug. 2.

Corning brings $250 million

Corning came to market on Wednesday to price $250 million of 3.7% notes (A3/BBB+/A-) due Nov. 15, 2023 with a spread of Treasuries plus 100 bps, according to an informed source and an FWP filed with the SEC.

Pricing was at 99.777 to yield 3.727%.

Corning's 3.7% senior notes were seen offered late in the day at 96 bps in the secondary market, a trader said.

The joint bookrunners for the offering were Deutsche Bank Securities and J.P. Morgan Securities LLC.

Proceeds will be used for general corporate purposes, which may include the repayment of debt, financing acquisitions, repurchases of common stock, additions to working capital, capital expenditures and investments.

Based in Corning, N.Y., Corning is a technology manufacturing company.

FHLB sets talk

Also on Wednesday, Federal Home Loan Banks set talk for its planned $3 billion offering of three-year global bonds at Treasuries plus 14 bps, according to market sources and a company news release.

The issue is expected to price on Thursday, and the bond will mature on Dec. 28, 2016.

Barclays and Deutsche Bank Securities are the lead managers.

The senior co-managers are JPMorgan and TD Securities (USA) LLC.

Six co-managers and a distribution group will complete the syndicate team.

FHLBanks is comprised of 12 government-sponsored funding providers.

© 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.