Westpac Banking sells $2.25 billion notes; Inter-American Bank upsizes; financial paper mixed

By Cristal Cody

Tupelo, Miss., July 16 – Deal volume slowed in the high-grade primary market on Tuesday with two reported issuers.

Westpac Banking Corp. priced $2.25 billion of subordinated notes in two tranches after holding fixed income investor calls.

The Inter-American Development Bank priced an upsized $2.5 billion two-part offering of global notes.

On Monday, more than $5 billion of securities were priced from issuers that included Cooperatieve Rabobank U.A., Burlington Northern Santa Fe, LLC, British Airways Plc, John Deere Capital Corp., Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Reliance Standard Life Global Funding II and Terrafina, LLC.

About $25 billion to $30 billion of supply is forecast by market sources this week.

Possible bank and financial issuance is anticipated following the release of earnings reports this week.

On Tuesday, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. released their earnings reports. On Wednesday, Bank of America Corp. releases its earnings, followed by Morgan Stanley on Thursday.

Citigroup Inc. released its second quarter earnings report on Monday.

In the secondary market, bank and financial paper was mixed following the earnings reports.

The Markit CDX North American Investment Grade 32 index eased about 1 basis point to end the day at a spread of 54 bps.

Westpac taps primary market

Westpac Banking sold $2.25 billion of subordinated notes (Baa1/BBB/A+) in two tranches on Tuesday, according to a market source.

The company placed $1.25 billion of 4.11% notes due July 24, 2034 at a spread of 200 bps over Treasuries.

A $1 billion tranche of 4.421% notes due July 24, 2039 priced at a spread of Treasuries plus 180 bps.

Both tranches priced on the tight side of guidance and better than initial talk.

BofA Securities, Inc., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Westpac Banking Corp. were the bookrunners.

The bank is based in Sydney, Australia.

IADB prices $2.5 billion

The Inter-American Development Bank (Aaa/AAA/) priced an upsized $2.5 billion two-part offering of global notes during the session, according to a market source.

The bank sold $1 billion of 1.875% two-year notes at mid-swaps plus 3 bps, or a Treasuries plus 5.75 bps spread.

Initial price talk on the two-year notes was in the mid-swaps plus 3 bps area.

An upsized $1.5 billion tranche of 2% seven-year notes priced at mid-swaps plus 14 bps, or a spread of 8.4 bps over Treasuries.

The seven-year tranche was initially talked to price with a spread in the mid-swaps plus 14 bps area. The offering was upsized from $1 billion.

BofA Securities, J.P. Morgan Securities, Nomura Securities International, plc and RBC Capital Markets, LLC were the bookrunners.

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

Bank, financial paper mixed

In the secondary market on Tuesday following earnings releases, Goldman’s notes traded flat to about 3 bps better, a source said.

JPMorgan’s paper was about 1 bp tighter to 6 bps weaker in afternoon trading.

Wells Fargo’s notes traded flat to about 2 bps tighter.

Bank of America’s paper was mixed and were seen about 3 bps weaker to 6 bps tighter during the session.

Morgan Stanley’s notes were quoted about 2 bps tighter to 7 bps softer.

Citigroup’s notes traded about 2 bps tighter to 4 bps weaker in the secondary market.

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