Primary action slows; Comerica sells notes; SL Green upsizes deal; credit spreads firm

By Cristal Cody

Tupelo, Miss., July 26 – Investment-grade issuance slowed on Thursday while credit spreads tightened more than 2 basis points.

Comerica Inc. priced $850 million of fixed-rate notes and dropped a planned floating-rate tranche.

SL Green Operating Partnership, LP upsized an offering of three-year notes to $350 million from $250 million, a source said.

In other pricing action, International Bank for Reconstruction and Development (Aaa/AAA/) tapped the Canadian dollar-denominated market with a benchmark deal following an offering in the U.S. primary market last week.

World Bank sold C$1 billion of 2.5% sustainable development bonds due Aug. 3, 2023 in the agency’s second Canadian dollar-denominated deal of the year, according to a news release.

The transaction is the largest SSA issuance in the Canadian dollar market since World Bank said it issued a C$1 billion benchmark bond in January for projects highlighting gender equality and women’s empowerment.

The new deal had a final order book of C$1.2 billion from more than 40 investors, with the bulk placed with domestic Canada institutional investors.

On July 18, World Bank priced its first U.S. dollar benchmark offering of the year with a $5 billion sale of 2.75% global notes due July 23, 2021.

The U.S. dollar issue had a final order book of $7.3 billion from more than 125 investors in 33 countries.

Also, earlier in the session, Fannie Mae announced on Thursday that it priced $6 billion of floating-rate notes in three tranches in the first-ever Secured Overnight Financing Rate securities issuance. The deal included $2.5 billion of six-month notes, $2 billion of 12-month notes and $1.5 billion of 18-month notes.

Investment-grade issuers have priced more than $20 billion of bonds week to date.

About $20 billion to $25 billion of supply had been predicted by syndicate sources for the week.

Fifth Third Bank priced the largest corporate deal of the week with a $1.55 billion three-part offering of senior notes that came on Monday.

The Markit CDX North American Investment Grade 30 index closed about 2 bps tighter at a spread of 58 bps. Credit spreads have tightened about 4 bps over the past three sessions after ending Monday mostly flat.

Comerica prices

Comerica priced $850 million of 3.7% five-year senior notes (A3/BBB+/A) on Thursday at 99.991 to yield 3.702%, or a spread of Treasuries plus 85 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced on the tight end of guidance in the Treasuries plus 85 bps to 90 bps spread area. The bonds were initially talked to print in the mid to high 90 bps over Treasuries spread area.

Comerica dropped a planned floating-rate tranche of notes from the final sale.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC were the bookrunners.

The financial services company is based in Dallas.

SL Green sells floaters

SL Green Operating Partnership (Baa3/BBB-/BBB) priced $350 million of three-year guaranteed senior floating-rate notes on Thursday at par to yield Libor plus 98 bps, according to an FWP filing with the SEC.

Deutsche Bank Securities Inc., BMO Capital Markets Corp. and TD Securities (USA) LLC were the bookrunners.

The notes are fully and unconditionally guaranteed by SL Green Realty Corp. and Reckson Operating Partnership, LP.

The real estate investment trust for retail and commercial properties is based in Escondido, Calif.

Funds see inflow

Investment-grade corporate mutual funds and exchange-traded funds saw a solid $1.986 billion addition of investor cash, coming after a similarly sized inflow of $2.021 billion during the week ended July 25, according to fund-flow statistics generated by AMG Data Services Inc.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.