Costco, Camden, National Securities, European Bank price; IADB offers notes; inflows return

By Cristal Cody

Tupelo, Miss., April 16 – High-grade supply slowed on Thursday to a handful of deals brought to the primary market.

Costco Wholesale Corp. priced $4 billion of senior notes in three tranches.

National Securities Clearing Corp. sold $2 billion of senior notes in a Rule 144A and Regulation S offering.

Camden Property Trust priced $750 million of 10-year notes.

Also, in sovereign, supranational and agency supply, the European Investment Bank sold $3 billion of five-year global notes.

Coming up on Friday in the SSA space, the Inter-American Development Bank is expected to price an offering of three-year global sustainable development notes.

Week to date, more than $50 billion of high-grade corporate bonds have priced, coming in above the $25 billion to about $50 billion of issuance expected this week.

Investment-grade corporate funds posted inflows over the past week after a month of record outflows.

Inflows totaled $5.81 billion for the week ending Wednesday, according to Refinitive Lipper US Fund Flows.

Corporate funds had reported outflows of $15.13 billion in the previous week. The net outflow year to date is $60.78 billion.

The Federal Reserve announced Thursday that its Paycheck Protection Program Liquidity Facility is now fully operational to help support small businesses impacted from the coronavirus-related lockdowns in place across most of the country.

The program is managed by the Federal Reserve Bank of Minneapolis on behalf of the Federal Reserve System.

Stocks were modestly better on the day following soft economic and job data reports.

The Markit CDX North American Investment Grade 33 index eased about 1 basis point to close at a spread of 88.24 bps.

The iShares iBoxx Investment Grade Corporate Bond ETF declined 0.5% to 130.613 after closing Wednesday 0.67% better.

The PIMCO Investment Grade Corporate Bond Index ETF improved 0.19% to 110.54 after ending the previous session up 0.41%.

In the secondary market, JPMorgan Chase & Co.’s record $10 billion four-part offering of fixed-to-floating-rate notes (A2/A-/AA-) priced on Wednesday, a day after releasing earnings improved about 5 bps to 11 bps, a source said.

The financial services company’s 2.083% notes due April 22, 2026 improved 7 bps after pricing in a $3.5 billion tranche at par to yield a spread of Treasuries plus 175 bps, tighter than talk in the Treasuries plus 185 bps area.

The rate on the notes will reset April 22, 2025 to a floating rate of SOFR plus 185 bps.

General Electric Co.’s $6 billion of senior notes (Baa1/BBB+/BBB) sold in four parts on Monday have come in about 22 bps to more than 45 bps in secondary trading, a source said.

The company’s 3.45% notes due May 1, 2027 were last seen nearly 50 bps tighter at 238 bps.

The Fairfield, Conn.-based industrial manufacturer sold $1 billion of the notes at 99.845 to yield 3.475%, or a spread of Treasuries plus 285 bps.

The notes were initially talked to price in the Treasuries plus 375 bps area.

Costco prices $4 billion

Leading deal volume on Thursday, Costco Wholesale priced $4 billion of senior notes (Aa3/A+/) in three parts, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $1.25 billion tranche of 1.375% notes due June 20, 2027 priced at 99.775 to yield 1.408%, or a spread of Treasuries plus 90 bps.

Initial price talk was in the Treasuries plus 145 bps area.

The company sold $1.75 billion of 1.6% 10-year notes at 99.825 to yield 1.619% and a Treasuries plus 100 bps spread, compared to talk at the 145 bps spread area.

In the final tranche, $1 billion of 1.75% notes due April 20, 2032 priced at 99.795 to yield 1.769% and a spread of 115 bps over Treasuries.

The notes were initially guided to print in the 165 bps over Treasuries area.

Credit Suisse Securities (USA) LLC, BofA Securities, Inc. and Citigroup Global Markets Inc. were the bookrunners.

The membership warehouse is based in Issaquah, Wash.

National Securities prints

National Securities Clearing (Aaa/AA+/) priced a $2 billion two-part Rule 144A and Regulation S offering of senior notes following fixed income investor calls last week, according to a market source.

A $1 billion tranche of 1.2% three-year notes came at a spread of Treasuries plus 100 bps.

Initial price talk was in the Treasuries plus 135 bps area.

National Securities sold $1 billion of 1.5% five-year notes at a spread of 120 bps over Treasuries, versus talk in the 150 bps area.

BofA Securities, Inc., J.P. Morgan Securities, LLC and Wells Fargo Securities, LLC were the lead managers.

The subsidiary of New York-based Depository Trust & Clearing Corp. provides clearing and settlement services to the financial industry.

Camden Trust in primary

Also on Thursday, Camden Property Trust priced $750 million of 2.8% 10-year notes (A3/A-/A-) at a spread of 220 bps over Treasuries, according to a market source and an FWP filing.

Initial talk was in the Treasuries plus 300 bps area.

The notes priced at 99.929 to yield 2.808%.

BofA Securities, Deutsche Bank Securities Inc., Jefferies LLC, J.P. Morgan and SunTrust Robinson Humphrey Inc. were the bookrunners.

The real estate investment trust for apartment communities is based in Houston.

EIB prices $3 billion

Meanwhile, the European Investment Bank (Aaa/AAA/AAA) priced $3 billion of 0.625% global notes due July 25, 2025 during the session at mid-swaps plus 24 bps, or a spread of Treasuries plus 37.5 bps, according to a market source.

Initial price talk was in the mid-swaps plus 27 bps area.

BofA Securities, Barclays and Citigroup were the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

IADB on tap

Looking to Friday, the Inter-American Development Bank (Aaa/AAA/) plans to price a dollar-denominated offering of three-year global sustainable development notes notes, according to a market source.

Initial price talk is in the mid-swaps plus 19 bps area.

Barclays, HSBC Securities (USA) Inc., Nomura Securities International, plc and RBC Capital Markets, LLC are the bookrunners.

The provider of development financing for Latin America and the Caribbean is based in Washington, D.C.

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