Fifth Third Bancorp, Reliance Standard price; Zions eyes primary; supply thin week to date

By Cristal Cody

Tupelo, Miss., Oct. 23 – Investment-grade bond supply on Wednesday included two corporate deals.

Fifth Third Bancorp priced a $750 million registered offering of long five-year senior notes 15 basis points tighter than initial talk.

Reliance Standard Life Global Funding II sold an upsized $400 million of five-year funding agreement-backed notes, also 15 bps better than initial guidance.

In other action on Wednesday, Zions Bancorporation NA (Baa1/BBB+/BBB) held fixed income investor calls for a subordinated note offering expected to soon follow, according to market sources.

High-grade deal volume has thinned with just over $4 billion of corporate bonds priced week to date. About $15 billion to $20 billion of supply was anticipated by syndicate sources for the week.

Market participants report focus has turned toward weak company earnings releases and a possible rate cut at the Federal Reserve’s upcoming Oct. 29-30 monetary policy meeting.

In other activity, the Federal Home Loan Bank System announced early Wednesday that it will not issue or reopen a Global Note on its Oct. 23 funding calendar date. The next Global Note opportunity will be on Nov. 6.

The Markit CDX North American Investment Grade 33 index firmed less than 1 bp to close at a spread of 54 bps.

In the secondary market, Delta Air Lines Inc.’s $1.5 billion of notes (Baa3/BB+/BBB-) priced in two tranches on Monday traded about 1 bp to 5 bps tighter than issuance, a source said.

Delta Air Lines’ $900 million of 2.9% notes due Oct. 28, 2024 were quoted nearly 5 bps better in the 133 bps area.

The Atlanta-based commercial airline priced the five-year notes at 99.603 to yield 2.986% and a spread of Treasuries plus 137.5 bps.

Fifth Third Bancorp sells notes

Fifth Third Bancorp sold $750 million of 2.375% senior notes due Jan 28, 2025 (Baa1/BBB+/A-) on Wednesday at a spread of 80 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial price talk was in the Treasuries plus 95 bps spread area.

The notes priced at 99.972 to yield 2.381%.

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

Fifth Third is a Cincinnati-based financial services company.

Reliance Standard prices $400 million

Reliance Standard Life Global Funding II priced an upsized $400 million of 2.5% five-year funding agreement-backed notes (A2/A+/) on Wednesday at a spread of 95 bps over Treasuries, according to a market source.

Initial price talk was in the Treasuries plus 110 bps area.

The Rule 144A and Regulation S deal was upsized from $300 million.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley were the bookrunners.

The issuer is a financing arm of Philadelphia-based Reliance Standard Life Insurance Co.

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