Smucker, BP Capital, Lloyds price; week’s supply tops $50 billion; bank, financial paper mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, March 12 – J.M. Smucker Co., BP Capital Markets plc, Lloyds Bank plc and EOG Resources Inc. continued the deluge of issuance the high-grade bond market has hosted in recent weeks.

Thursday’s session saw $10.65 billion of paper price during the session, pushing the week’s total supply to more than $50 billion.

The month of March has already seen a staggering $114 billion of issuance in only nine trading days.

“The market is holding up well, considering,” a market source said.

All six tranches of J.M. Smucker’s new $3.65 billion offering sold around 20 basis points tight of the mid-point of initial guidance.

BP Capital attracted an order book that was around two times oversubscribed for its new $2 billion offering.

Meanwhile, Lloyds Banking came to the primary with $2.5 billion of senior notes priced in three tranches, while EOG Resources issued $1 billion of notes in 10- and 20-year tranches.

Nordic Investment Bank and Helmerich & Payne International Drilling Co. were each in the market with upsized new issues.

Helmerich & Payne sold its $500 million 10-year offering at a 262.5 bps spread over Treasuries compared to initial price thoughts set in the low-300 bps area.

In the preferred space, AmTrust Financial Services Inc., Bank of America Corp. and Morgan Stanley & Co. Inc. came to market with new issues.

High-grade bonds traded mostly better over the day, while bank and financial paper was mixed as the market digested the results of the Federal Reserve’s bank stress tests, sources said.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 64 bps.

The major U.S. banks passed the annual tests, while the U.S. divisions of Banco Santander, S.A. and Deutsche Bank AG failed due to risk assessment deficiencies. Bank of America must resubmit its capital plan by the end of September.

Bank of America’s paper (Baa2/A-/A) traded mostly softer over the day.

Goldman Sachs Group Inc.’s 3.5% senior notes due 2025 tightened 2 bps.

JPMorgan Chase & Co.’s 3.125% notes due 2025 firmed 1 bp.

Wells Fargo & Co.’s 2.15% senior notes due 2020 traded 1 bp softer.

JM Smucker six-parter

J.M. Smucker priced a $3.65 billion six-tranche issue of senior notes (Baa2/BBB) on Thursday, according to market sources.

The company sold $500 million of 1.75% three-year notes at 75 bps over Treasuries. Pricing was at 99.85 to yield 1.802%.

A $500 million tranche of 2.5% five-year notes priced at 99.572 to yield 2.592%, or Treasuries plus 100 bps.

There was a $400 million tranche of 3% seven-year notes sold at 99.975 to yield 3.071%, or 115 bps over Treasuries.

The company also sold $1 billion of 3.5% 10-year notes with a spread of 140 bps over Treasuries. The notes priced at 99.975 to yield 3.503%.

A $650 million tranche of 4.25% 20-year notes sold at 99.627 to yield 4.278%, or 160 bps over Treasuries.

Finally, $600 million of 4.375% 30-year notes priced at Treasuries plus 180 bps. Pricing was at 98.31 to yield 4.478%.

The notes sold via Rule 144A and Regulation S.

BofA Merrill Lynch and J.P. Morgan Securities LLC were banks on the deal.

Orrville, Ohio-based Smucker makes fruit spreads, coffee, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk and other foods products.

Lloyds new issue

Lloyds Banking sold $2.5 billion of senior notes (A1/A/A) on Thursday in three parts, a market source said.

There was a $500 million tranche of floating-rate notes due 2018 sold at par to yield Libor plus 52 bps.

A $1 billion tranche of 1.75% notes due 2018 sold at 75 bps over Treasuries.

The notes sold at 99.866 to yield 1.796%.

Lloyds also priced $1 billion of 2.4% notes due 2020 at 99.836 to yield 2.435%, or Treasuries plus 85 bps.

Both tranches sold at the tight end of price guidance.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., JPMorgan and Lloyds Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by Lloyds Banking Group plc.

The retail bank is based in London.

BP Capital prices tight

BP Capital Markets issued $2 billion of senior notes (A2/A/) on Thursday in tranches due 2020 and 2022, according to an informed source.

There was $1 billion of 3.062% notes sold at par with a spread of Treasuries plus 117 bps.

The notes sold at the tight end of guidance set in the 120 bps area over Treasuries.

A second tranche was $1 billion of 3.506% priced at par, or Treasuries plus 142 bps.

Pricing was at the tight end of the 145 bps area over Treasuries guidance.

BofA Merrill Lynch, Barclays, HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners.

The unit of oil company BP plc is based in London.

EOG sells $1 billion

EOG Resources sold on Thursday a $1 billion offering of senior notes (A3/A-/) in 10- and 20-year tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

There was a $500 million tranche of 3.15% 10-year notes priced at 99.999 to yield 3.15%, or Treasuries plus 105 bps.

The notes sold at the tight end of guidance set in the Treasuries plus 110 bps area, having firmed from initial talk set in the area of 115 bps over Treasuries.

A second tranche was $500 million of 3.9% 20-year notes sold at 99.571 to yield 3.931% with a spread of Treasuries plus 125 bps.

Pricing was at the tight end of the Treasuries plus 130 bps area. Initial guidance was set in the 135 bps area over Treasuries.

Barclays, Citigroup Global Markets, JPMorgan, UBS Securities, Wells Fargo Securities LLC, DNB Markets Inc., Goldman Sachs, MUFG, RBC Capital Markets LLC, SG Americas Securities LLC and U.S. Bancorp Investments Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes, including the funding of capital expenditures.

EOG is a Houston-based crude oil and natural gas company.

Helmerich upsizes

Helmerich & Payne International Drilling sold an upsized $500 million issue of 4.65% senior notes (A3//) due March 15, 2025 on Thursday at Treasuries plus 262.5 bps, a market source said.

The notes sold at the tight end of guidance set in the 275 bps area over Treasuries. Initial guidance was set in the low-300 bps area.

The notes are guaranteed by Helmerich & Payne Inc.

The company intends to use the proceeds from the offering for general corporate purposes, including capital expenditures associated with its rig construction program.

Goldman Sachs, Wells Fargo Securities and HSBC Securities were bookrunners for the Rule 144A and Regulation S.

Tulsa, Okla.-based Helmerich & Payne engages in the contract drilling of oil and gas wells.

NIB global bonds

Nordic Investment Bank priced a $1.25 billion offering of 1.125% three-year global notes (Aaa/AAA/) at mid-swaps minus 9 bps, or Treasuries plus 13.5 bps, according to a market source and an FWP filed with the SEC.

Price talk was set in the mid-swaps minus 7 bps area.

The notes priced at 99.806.

Citigroup Global Markets, Deutsche Bank Securities Inc., Nomura Securities Co. Ltd. and TD Securities ran the books.

The financier for five Nordic countries is based in Helsinki, Finland.

AmTrust prices new issue

AmTrust Financial sold $165 million of 7.5% series D noncumulative preferreds on Thursday.

A trader said he saw a $24.62 bid in the early gray market.

Initial price talk was 7.5% to 7.625%.

Morgan Stanley, UBS Securities and Keefe Bruyette & Woods Inc. were the bookrunning managers.

Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures and/or strategic acquisitions.

AmTrust is a New York-based insurance company.

BofA brings $1,000-pars

Bank of America brought $1.9 billion of 6.1% $1,000-par series AA fixed-to-floating-rate noncumulative preferred stock during Thursday’s session.

Initial price talk was 6.75%.

A market source said he saw the issue quoted at 100.1 bid, 100.6 offered early in the afternoon.

BofA Merrill Lynch was the bookrunner.

The dividend will be fixed until March 17, 2025, at which time it will begin floating at Libor plus 389.8 bps. While fixed, the dividends will be payable semiannually. Once floating, the dividend will be paid quarterly.

The Charlotte, N.C.-based bank can redeem the securities on or after March 17, 2025 at par plus accrued dividends. The company can also redeem the paper upon a regulatory capital treatment event.

Proceeds will be used for general corporate purposes, which may include working capital, debt reductions or redemptions or acquisitions.

Morgan Stanley’s new deal

Morgan Stanley priced $1.5 billion of 5.5% $1,000-par series J fixed-to-floating-rate noncumulative preferred stock on Thursday.

A market source pegged the issue at 100.625 bid, 101 offered.

Initial price talk was 5.75%.

Morgan Stanley ran the books.

Dividends will be fixed until July 15, 2020 and will be payable semiannually during that time. On July 15, 2020, the dividend will begin floating at Libor plus 381 bps and will be payable quarterly.

The New York-based bank can redeem the preferreds on or after July 15, 2020 or upon a regulatory capital treatment event at par plus accrued dividends.

Proceeds will be used for general corporate purposes.

Bank of America soft

Bank of America’s 4% notes due 2025 eased 1 bp to 193 bps bid on Thursday, a market source said.

The company sold $2.5 billion of the notes on Jan. 16 at Treasuries plus 225 bps.

Bank of America’s 4% notes due 2024 widened 5 bps to 135 bps bid, according to the source.

The Charlotte, N.C.-based financial services company sold $2.75 billion of the notes on March 27, 2014 at Treasuries plus 137 bps.

Goldman improves

Goldman Sachs’ 3.5% notes due 2025 tightened 2 bps to 143 bps bid, a source said.

Goldman sold $1.7 billion of the notes (Baa1/A-/A) on Jan. 20 at a spread of Treasuries plus 170 bps.

The financial services company is based in New York City.

JPMorgan firms

JPMorgan Chase’s 3.125% notes due 2025 firmed 1 bp to 125 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at Treasuries plus 145 bps.

The financial services company is based in New York City.

Wells Fargo eases

Well’s Fargo’s 2.15% notes due 2020 eased 1 bp to 68 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.

Bank/broker CDSs mostly lower

Investment-grade bank and brokerage CDS prices were lower on Thursday, according to a market source.

Bank of America’s CDS costs were 1 bp lower at 64 bps bid, 69 bps offered. Citigroup, Inc.’s CDS costs were down 1 bp to 72 bps bid, 77 bps offered. JPMorgan Chase’s CDS costs were unchanged at 62 bps bid, 67 bps offered. Wells Fargo’s CDS costs declined 3 bps to 41 bps bid, 44 bps offered.

Merrill Lynch’s CDS costs were 1 bp lower at 67 bps bid, 71 bps offered. Morgan Stanley’s CDS costs were down 2 bps to 73 bps bid, 78 bps offered. Goldman Sachs Group’s CDS fell 2 bps to 82 bps bid, 85 bps offered.

Paul Deckelman and Stephanie N. Rotondo contributed to this review.

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