Block Financial, Svenska Handelsbanken, IADB price to close week; JPMorgan, Citigroup firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 25 – Block Financial LLC, Svenska Handelsbanken AB and Inter-American Development Bank sold new bond offerings amid supportive market conditions to close the week for investment-grade bonds.

The rare active Friday session saw Block Financial attract an order book that was around 1.5 times oversubscribed for its new $1 billion issue, which is guaranteed by H&R Block, Inc.

Svenska Handelsbanken, meanwhile, priced $1.5 billion of five-year notes in two tranches.

The floating-rate portion of the deal was added following the offering’s guidance stage, and the fixed-rate tranche sold around 12 basis points tight of initial talk.

Also on Friday, Inter-American Development Bank priced a $225 million add-on to its existing floaters due 2018.

The day’s activity pushes the week’s total supply to roughly $29.1 billion.

Investment-grade bonds were mixed in secondary trading on Friday, and credit spreads headed out weaker.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 that priced on Wednesday traded about 2 bps better than issuance.

Citigroup Inc.’s new 4.45% subordinated notes due 2027 improved about 1 bp in secondary trading on Friday.

AT&T Inc.’s 4.75% bonds due 2046 remained weaker over the session.

The Markit CDX North American Investment Grade 25 index widened 2 bps from the previous day to a spread of 88 bps on Friday.

Block Financial two-parter

Block Financial sold on Friday a $1 billion offering of senior notes (Baa3/BBB) in five- and 10-year tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $650 million of 4.125% five-year notes priced at 99.674 to yield 4.198%, or Treasuries plus 275 bps.

Pricing was at the tight end of guidance set in the range of Treasuries plus 275 bps to 287.5 bps, tightened from talk in the Treasuries plus 287.5 bps area.

A $350 million tranche of 5.25% 10-year notes sold at 99.7 to yield 5.289% with a spread of Treasuries plus 312.5 bps.

Guidance was set in the Treasuries plus 312.5 bps to 325 bps range following initial talk set in the Treasuries plus 325 bps area.

J.P. Morgan Securities LLC, BofA Merrill Lynch, SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc. are the bookrunners.

Proceeds will be used to fund a tender offer.

The tax preparation and financial services company is based in Kansas City, Mo.

Svenska taps market

Also on Friday, Svenska Handelsbanken sold $1.5 billion of notes (A2/AA-/AA-) due Oct. 1, 2020 in two tranches, a market source said.

The company priced $1.25 billion of 2.4% five-year notes at Treasuries plus 98 bps.

The notes, which were issued at a price of 99.902 to yield 2.421%, sold at the tight end of guidance set in the area of Treasuries plus 100 bps.

Initially, talk was set in the Treasuries plus 110 bps area.

Also, $250 million of five-year floating-rate notes sold at par to yield Libor plus 93 bps.

The floating-rate tranche was added following the deal’s guidance stage.

BofA Merrill Lynch, Credit Suisse Securities, Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners.

The financial services company and bank is based in Stockholm.

IADB add-on prices

The session also hosted a $225 million add-on priced by Inter-American Development Bank, according to an informed source.

The tap of the notes (Aaa/AAA) due Sept. 12, 2018 sold with a yield of Libor plus 1 bp and carry a Libor plus 3 bps coupon.

BofA Merrill Lynch and Barclays were the joint bookrunners.

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

JPMorgan modestly better

JPMorgan Chase’s 4.25% subordinated bonds due 2027 headed out on Friday at 213 bps offered, a trader said.

JPMorgan Chase sold $2 billion of the bonds (Baa1/A-/A) on Wednesday at Treasuries plus 215 bps.

The financial services company is based in New York City.

Citigroup improves

Citigroup‘s 4.45% subordinated notes due 2027 traded about 1 bp tighter over the session at 234 bps offered, according to a trader.

Citigroup sold $2 billion of the notes (Baa2/BBB+/A-) on Wednesday at 235 bps over Treasuries.

The financial services company is based in New York.

AT&T bonds ease

AT&T’s 4.75% bonds due 2046 traded about 3 bps weaker on Friday at 233 bps bid, a market source said.

AT&T sold $3.5 billion of the bonds (/BBB+/A-) on April 23 at 215 bps over Treasuries.

The telecommunications company is based in Dallas.

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