ABN Amro, RBC bring deals to primary; Wells Fargo stable; Barclays, Verizon ease

By Aleesia Forni and Cristal Cody

Virginia Beach, July 21 – Financial names dominated action in the investment-grade market on Tuesday, with ABN Amro Bank NV and Royal Bank of Canada entering the primary amid broader market weakness during the session.

Despite the tone, ABN Amro was able to price its new $1.5 billion offering around 20 basis points tighter than initial price talk.

Royal Bank of Canada sold a new floating-rate covered bond in line with price thoughts, skipping the guidance stage to go straight to launching the $500 million deal.

The deal’s order book reached $700 million.

Caisse d'Amortissement de la Dette Sociale also priced a $3 billion offering on Tuesday, though details of the sale were unavailable at press time.

In total, the primary has hosted around $19.5 billion of new issuance, with more than half of that total coming from UnitedHealth Group Inc.’s $10.5 billion acquisition financing deal.

In the secondary market, Wells Fargo & Co.’s 2.15% senior notes due 2020 were unchanged on the day.

Barclays plc’s 2.875% notes due 2020 traded 1 bp softer after tightening 7 bps in the previous session.

Verizon Communications Inc.’s 3.5% notes due 2024 headed out 4 bps weaker.

The Markit CDX North American Investment Grade index ended 1 bp wider at a spread of 67 bps.

The index has ranged from a low spread of 60.4 bps to a high spread of 76.4 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

ABN Amro notes

ABN Amro Bank priced $1.5 billion of 4.75% 10-year subordinated bank notes (Baa3/BBB-/A-) on Tuesday at Treasuries plus 245 bps, a market source said.

The issue priced at 99.732 to yield 4.784%.

Pricing was at the tight end of talk set in the 250 bps area over Treasuries, which had tightened from initial price thoughts in the area of Treasuries plus 265 bps.

Proceeds will be used for general corporate purposes.

Bookrunners for the Rule 144A and Regulation S without registration rights deal were BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The bank and financial services company is based in Amsterdam.

RBC covered bond

Also on Tuesday, Royal Bank of Canada priced a $500 million three-year floating-rate covered bond (Aaa/AAA/AAA) on Tuesday at par to yield Libor plus 30 bps, a market source said.

RBC Capital Markets LLC and HSBC Securities were the bookrunners.

The financial services company is based in Toronto.

World Bank sets talk

In forward calendar news, International Bank for Reconstruction and Development (World Bank) announced new deal plans, setting price talk for a benchmark offering of global notes (Aaa/AAA/AAA) due 2025 on Tuesday in the mid-swap plus 15 bps area, a market source said.

The bookrunners are Barclays, Deutsche Bank Securities Inc., HSBC Securities and TD Securities.

The issuer is based in Washington, D.C.

Citizens plans deal

Citizens Financial Group Inc. also joined the forward calendar on Tuesday, announcing plans to price an offering of subordinated notes due 2025, according to a filing with the Securities and Exchange Commission.

BofA Merrill Lynch is the bookrunner.

The Providence, R.I.-based bank plans to use the proceeds for general corporate purposes.

Wells Fargo stable

Wells Fargo’s 2.15% notes due 2020 were flat over the session at 80 bps bid, according to a market source.

Wells Fargo sold $2 billion of the notes (A2/A+/AA-) on Jan. 26 at Treasuries plus 85 bps.

The bank is based in San Francisco.

Barclays eases

Barclays’ 2.875% notes due 2020 eased 1 bp to 141 bps bid, according to a market source.

Barclays sold $1 billion of the notes (Baa3/BBB/A) on June 1 at Treasuries plus 142 bps.

The financial services company is based in London.

Verizon softens

Verizon’s 3.5% notes due 2024 widened 4 bps in secondary trading to 155 bps bid, according to a market source.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at Treasuries plus 135 bps.

The telecommunications company is based in New York City.

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