Published on 10/30/2018 in the Prospect News Investment Grade Daily.
New Issue: Charles Schwab offers details on $1.1 billion two-part issue of notes
By Devika Patel
Knoxville, Tenn., Oct. 30 – Charles Schwab Corp. gave further details about a $1.1 billion sale of senior notes (A2/A/A) that priced in two tranches on the tight side of guidance on Monday, according to an FWP filed with the Securities and Exchange Commission.
The $500 million of 3.55% notes due Feb. 1, 2024 priced at a Treasuries plus 67 basis points spread. These notes priced at 99.861 to yield 3.58%.
A $600 million tranche of 4% notes due Feb. 1, 2029 priced with a 97 bps spread over Treasuries. These notes priced at 99.597 to yield 4.049%.
BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.
Proceeds will be used for general corporate purposes, including repurchasing common stock.
Charles Schwab is a San Francisco-based company that provides wealth management, securities brokerage, banking, asset management, custody and financial advisory services.
| Issuer: | Charles Schwab Corp.
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| Amount: | $1.1 billion
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| Description: | Senior notes
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| Bookrunners: | BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
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| Senior co-managers: | Goldman Sachs & Co., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC
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| Co-managers: | BNY Mellon Capital Markets LLC, HSBC Securities (USA) Inc., Lloyds Securities Inc. and PNC Capital Markets LLC
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| Trade date: | Oct. 29
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| Settlement date: | Oct. 31
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| Ratings: | Moody’s: A2
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| S&P: A
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| Fitch: A
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| Distribution: | SEC registered
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| Five-year notes
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| Amount: | $500 million
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| Maturity: | Feb. 1, 2024
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| Coupon: | 3.55%
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| Price: | 99.861
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| Yield: | 3.58%
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| Spread: | Treasuries plus 67 bps
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| Call: | Make-whole call at Treasuries plus 10 bps until Jan. 1, 2024, then a par call
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| Price guidance: | Treasuries plus 70 bps area, plus or minus 3 bps; initial talk at Treasuries plus 80 bps to 85 bps area
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| 10-year notes
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| Amount: | $600 million
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| Maturity: | Feb. 1, 2029
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| Coupon: | 4%
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| Price: | 99.597
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| Yield: | 4.049%
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| Spread: | Treasuries plus 97 bps
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| Call: | Make-whole call at Treasuries plus 15 bps until Nov. 1, 2028, then a par call
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| Price guidance: | Treasuries plus 100 bps area, plus or minus 3 bps; initial talk at Treasuries plus 110 bps area
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