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European banks jump into US bond market
By Will Caiger-Smith and Tom Porter
NEW YORK/LONDON, Aug 16 (IFR) - Investors piled into new dollar deals Tuesday from Societe Generale (Swiss: 519928.SW - news) and Standard Chartered, showing plenty of demand for the latest offerings from overseas financials.
European banks have printed more than US$17bn in the Yankee market since the beginning of July, and Tuesday's trades added to the flow of borrowers coming Stateside for better pricing.
"Levels are very compelling in the dollar market," one syndicate banker told IFR.
"Issuers know what the new issue premiums are and what sort of size you can get, whereas we've barely had anything in the euro market."
Bankers said both Societe Generale and Standard Chartered (HKSE: 2888.HK - news) saved money by printing in dollars rather than their home currencies.
SocGen (Paris: FR0000130809 - news) sold a 10-year US$1bn subordinated bond (rated Baa3/BBB) - the French bank's second Tier 2 deal of the year.
The bank launched the deal at T+275bp, the tight end of the T+280bp (+/- 5bp) guidance, inside revised IPTs of T+290bp area and well in from initial price thoughts of T+300bp area.
Bank of America Merrill Lynch, Morgan Stanley (Xetra: 885836 - news) , RBC (Other OTC: RBCI - news) and SG's own investment bank led the 144A/Reg S trade.
"The 144A/Reg S format appeals to the Asian buyer base, who are cash rich and increasingly active," said one head of syndicate in London.
"We are seeing an increased appetite for dollar assets as yields come down."
The deal had amassed some US$7.5bn of orders by mid-morning in New York.
More than US$17bn in orders came in for Standard Chartered's three-part offering 10-year subordinated issue and three-year senior fixed and floater.
StanChart (HKSE: 2888-OL.HK - news) (A1/BBB+/A+) launched its US$3bn three-part deal at the tight end of guidance, having also revised IPTs earlier in the day.
The US$1.25bn subordinated bond launched at T+280bp, the US$1bn three-year senior unsecured fixed at T+130bp and the US$750m three-year FRN at three-month Libor plus 113bp.
All those levels were at the tight end of guidance of T+285bp area for the 10.5-year, and T+135bp area and Libor equivalent for the three-year (area is +/- 5bp).
Bookrunners were BNP Paribas (LSE: 0HB5.L - news) , Credit Suisse (LSE: 0QP5.L - news) , JP Morgan and StanChart. (Reporting by Tom Porter and Will Caiger-Smith; Editing by Natalie Harrison and Marc Carnegie)
