Mylan prices $1 billion dual-tranche deal to close week; bank, financial paper mostly soft

By Aleesia Forni and Cristal Cody

New York, Dec. 4 – Mylan NV sold a $1 billion issue of senior notes on Friday in two tranches, closing out a week for the high-grade primary that beat expectations.

A $500 million 3% tranche of three-year notes sold at Treasuries plus 180 basis points. Pricing was at 99.874 to yield 3.044%.

And a $500 million 3.75% tranche of five-year notes sold at 99.968 to yield 3.757%, or Treasuries plus 205 bps.

Both tranches sold around 20 bps inside the mid-point of initial talk.

The bookrunners were Goldman Sachs & Co., Deutsche Bank Securities Inc. and MUFG.

The Hatfield, England-based company plans to use the proceeds to repay debt and to fund a share repurchase.

Primary activity has been on fire this week, with more than $32 billion of new investment-grade issuance pricing.

The pace is expected to continue going forward into next week, with players preparing for a “very, very busy” week as issuers access the market ahead of the Federal Reserve’s policy meeting and the late-year holidays.

Sources expect another $30 billion to $35 billion of supply to enter the primary market in the week ahead.

Bank and financial paper was mostly weaker in secondary trading on Friday.

Bank of America Corp.’s 3.875% senior notes due 2025 traded about 1 bp better.

Citigroup Inc.’s 4.4% subordinated notes due 2027 eased 2 bps in the secondary market.

Goldman Sachs Group Inc.’s paper traded 3 bps to 6 bps wider.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 headed out 5 bps softer.

The Markit CDX North American Investment Grade 25 index improved 2 bps to close at a spread of 82 bps.

Funds see outflows

Corporate investment-grade bond funds saw $54.7 million of outflows for the week ended Dec. 2, according to Lipper U.S. Funds Flows.

The number follows last week’s $1.45 billion of outflows and brings the year-to-date total to roughly $14.4 billion.

Bank of America improves

Bank of America’s 3.875% senior notes due 2025 firmed about 1 bp to 140 bps bid, a market source said.

Bank of America sold $2.5 billion of the notes (Baa1/A-/A) on July 27 at a spread of 167 bps over Treasuries.

The financial services company based in Charlotte, N.C.

Citigroup eases

Citigroup’s 4.4% subordinated notes due 2027 eased 2 bps to 226 bps bid on Friday, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa3/BBB+/A-) in an Oct. 23 add-on at a spread of 233 bps over Treasuries. The $2 billion tranche originally priced on Sept. 23 at Treasuries plus 235 bps.

The financial services company is based in New York.

Goldman widens

Goldman’s 4.25% subordinated notes due 2025 were quoted 3 bps wider on the day at 205 bps bid, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The company’s 4.75% bonds due 2045 (A3/A-/A) widened 6 bps during the trading session to 175 bps bid.

The bonds priced in a $1.75 billion tranche in the Oct. 16 offering at 192 bps over Treasuries.

The financial services company is based in New York City.

JPMorgan softens

JPMorgan Chase’s 4.25% subordinated bonds due 2027 traded 5 bps weaker on Friday at 199 bps bid, a market source said.

JPMorgan Chase sold $2 billion of the bonds (Baa1/A-/A) on Sept. 23 at a spread of Treasuries plus 215 bps.

The financial services company is based in New York City.

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