Sumitomo Mitsui prices $2 billion; Nordic Investment sells notes; Charter, Bayer strong

By Cristal Cody

Tupelo, Miss., July 12 – High-grade deal volume increased on Thursday with new issuance in both the corporate and SSA primary markets.

Sumitomo Mitsui Financial Group Inc. priced $2 billion of senior notes in three tranches.

Toronto-Dominion Bank came with $2 billion of senior medium-term notes in two tranches.

Nordic Investment Bank also tapped the high-grade primary market on Thursday with a $1 billion offering of five-year global notes.

Supply week to date totals more than $10 billion. Syndicate sources had expected about $15 billion to $20 billion of volume for the week.

The Markit CDX North American Investment Grade 30 index was about 1 basis point tighter on the day at a spread of 62 bps.

In the secondary market, Charter Communications, Inc.’s senior secured notes (Ba1/BBB-/BBB-) have tightened over the week, though the notes were flat on Thursday.

Bayer AG’s notes priced as part of a $15 billion deal in June were mixed but are trading better than issuance.

Meanwhile, daily inflows to high-grade bond funds and domestic investments have improved as the third quarter gets underway in July, according to a BofA Merrill Lynch note released on Thursday.

On Wednesday, dealers sold more than $1.6 billion of investment-grade bonds, the note said.

“While inflows to short-term HG funds have hovered around a fairly constant positive level for months, the change in July is that inflows away from short-term funds have rebounded to similar levels after having been roughly flat on average through the months of May and June,” Hans Mikkelsen, a BofA Merrill Lynch strategist, said in the note.

Total returns for corporate bonds have improved, while interest rate volatility has declined and equities have rebounded recently, all which support improving inflows to high-grade bond funds and ETFs, Mikkelsen said.

“With low dealer inventories, muted new issuance and rebounding demand, no wonder investors net purchased an impressive $1.6 [billion plus] of U.S. IG corporate bonds from dealers [on Wednesday], despite the 0.71% decline in stocks and the combo of World Cup, Wimbledon and Tour De France competing strongly for investor attention.”

Sumitomo Mitsui sells notes

Sumitomo Mitsui Financial Group priced $2 billion of senior notes (A1/A-/A) in three tranches on Thursday, according to a market source.

The company sold $500 million of five-year floating-rate notes at Libor plus 86 bps.

Sumitomo Mitsui priced $750 million of 3.748% five-year fixed-rate notes at a spread of Treasuries plus 100 bps.

The company also priced $750 million of 3.944% 10-year notes with a Treasuries plus 110 bps spread.

SMBC Nikko Securities America Inc., Goldman Sachs & Co., BofA Merrill Lynch and Citigroup Global Markets Inc. were the bookrunners.

The banking and financial company is based in Tokyo.

TD Bank in primary

Toronto-Dominion Bank priced $2 billion of senior medium-term notes (Aa2/AA-/) in two tranches on Thursday, according to FWP filings with the Securities and Exchange Commission.

The bank sold $400 million of five-year floating-rate notes at par to yield Libor plus 64 bps.

Toronto-Dominion Bank priced $1.6 billion of 3.50% five-year fixed-rate notes at a spread of Treasuries plus 78 bps. The notes priced at 99.864 to yield 3.53%.

TD Securities (USA) LLC, Goldman Sachs, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

The bank and financial services company is based in Toronto.

Nordic Investment Bank prices

Nordic Investment Bank (Aaa/AAA/) priced $1 billion of 2.875% global notes due July 19, 2023 on Thursday at 99.792, according to a market source and an FWP filing with the SEC.

The notes priced at a spread of mid-swaps plus 3 bps, or Treasuries plus 17.1 bps. The issue was initially talked to price with a spread in the mid-swaps plus 5 bps area.

Citigroup Global Markets, HSBC Securities (USA) Inc., RBC Capital Markets LLC and TD Securities were the bookrunners.

Nordic Investment Bank is an international financial institution owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.

Charter notes firm

Charter Communications’ 4.5% notes due Feb. 1, 2024 were quoted unchanged on Thursday in the 161 bps area, a source said.

The notes had tightened on Tuesday to 174 bps bid from 180 bps bid in the secondary market.

Charter subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. sold $1.1 billion of the notes on June 28 at a Treasuries plus 180 bps spread.

The broadband communications company is based in Stamford, Conn.

Bayer mixed

Bayer’s 3.875% notes due Dec. 15, 2023 improved 2 bps to 105 bps bid on Thursday, a market source said.

Bayer affiliate Bayer US Finance II LLC (Baa1/BBB/A-) sold $2.25 billion of the five-year notes on June 18 at a spread of 115 bps over Treasuries.

Bayer’s tranche of 4.375% note due Dec. 15, 2028 softened 1 bp to 138 bps bid.

The $3.5 billion tranche priced at a spread of 155 bps over Treasuries.

The health care and agriculture products company is based in Leverkusen, Germany.

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