Morgan Stanley, JPMorgan Chase, Rabobank, BMW tap primary; European Bank sells notes

By Cristal Cody

Tupelo, Miss., April 19 – Bank and financial supply continued to dominate the high-grade market on Thursday with deals priced from Morgan Stanley, JPMorgan Chase Bank, NA, Cooperatieve Rabobank UA, New York Branch and the European Bank for Reconstruction and Development.

Morgan Stanley sold $3.75 billion of notes in two tranches.

JPMorgan Chase Bank tapped the primary market with a $3.5 billion two-part offering of three-year notes.

Cooperatieve Rabobank, New York Branch priced $1.75 billion of notes in two parts.

Also, BMW US Capital, LLC priced a $500 million tap of its floating-rate notes due April 6, 2020.

The European Bank for Reconstruction and Development sold $1.75 billion of three-year notes.

Bank and financial supply over the week also has included new issuance from JPMorgan Chase & Co., Citigroup Inc. and Goldman Sachs Group Inc.

In other high-grade market action on Thursday, Canadian oil and natural gas company Harvest Operations Corp. (Aa2/AA/) began a two-day round of fixed-income investor calls for a dollar-denominated senior note deal, a source said.

BofA Merrill Lynch and SMBC Nikko Securities America, Inc. are the arrangers.

The Markit CDX North American Investment Grade 30 index eased about 1 basis point to close at a spread of 60 bps.

Morgan Stanley sell notes

Morgan Stanley (A3/BBB+/A) priced $3.75 billion of global medium-term fixed/floating rate senior notes (A3/BBB+/A) on Thursday in two tranches, according to a market source and an FWP filing with the Securities and Exchange Commission.

Morgan Stanley sold $2.75 billion of 3.737% six-year notes at par to yield a spread of Treasuries plus 98 bps, on the tight side of guidance in the Treasuries plus 100 bps area. The notes convert April 24, 2023 to a floating rate of Libor plus 84.7 bps.

The company sold $1 billion of 4.457% 21-year notes at par to yield a spread of Treasuries plus 135 bps, in line with guidance. The notes convert April 22, 2038 to a floating rate of Libor plus 143.1 bps.

Morgan Stanley & Co. LLC was the bookrunner.

Morgan Stanley is a New York-based financial products and services company.

Chase Bank prices notes

JPMorgan Chase Bank priced $3.5 billion of notes due April 26, 2021 (Aa3/A+/AA-) in two tranches on Thursday, according to a market source.

The company sold $1.3 billion of floating-rate notes at Libor plus 34 bps.

JPMorgan priced $2.2 billion of 3.086% fixed-to-floating-rate notes at a spread of Treasuries plus 65 bps. The notes will convert to a floating rate of Libor plus 35 bps after the initial fixed-rate period.

J.P. Morgan Securities LLC was the bookrunner.

The banking and financial services holding company is based in New York.

Rabobank brings two tranches

Cooperatieve Rabobank, New York Branch (Aa3/A+/) priced $1.75 billion of notes in two parts on Thursday, according to a market source.

The company sold $750 million of three-year floating-rate notes at Libor plus 43 bps.

Cooperative Rabobank sold $1 billion of 3.125% notes due April 26, 2021 at a spread of Treasuries plus 65 bps.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities and Morgan Stanley were the bookrunners.

The financing arm of Cooperatieve Rabobank UA is based in New York.

BMW US Capital reopens

BMW US Capital priced a $500 million reopening of its floating-rate notes due April 6, 2020 (A1/A+/) on Thursday with a yield of Libor plus 30 bps, according to a market source.

TD Securities (USA) LLC was the bookrunner.

The company originally sold $250 million of the floaters on March 30, 2017 at Libor plus 38 bps. The total outstanding now is $750 million.

Woodcliff Lake, N.J.-based BMW US Capital is the U.S. financing arm for the BMW German auto manufacturer.

Funds add cash

Investment-grade corporate mutual funds and exchange-traded funds once more added cash, according to fund-flow statistics generated by AMG Data Services Inc. – but in a break from the pattern seen for most of the year so far they actually saw a smaller inflow than high-yield funds.

For the seven days ended April 18, the investment-grade funds added $1.535 billion of cash, according to the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

The gain came after a substantial $3.346 billion inflow in the previous week and a $1.554 billion addition for the week to April 4.

The latest week marks the sixth straight inflow for the investment-grade funds.

They previously saw a $0.438 billion inflow for the week to March 28 and a $3.484 billion inflow the previous week.

Those gains, in turn, followed a $2.316 billion inflow which more than reversed the rare $740 million net outflow figure that preceded it.

There was also an outflow during the Feb. 14 week but otherwise it has been all cash additions, including a 21-week stretch before the Feb. 14 week that dated back to mid-September, according to a Prospect News analysis of the data.

The latest gain raises the year-to-date inflow for the IG corporates to $36.02 billion from $34.48 billion the previous week, once more setting a new peak level for the year so far.

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