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US IG WRAP-StanChart, NBC beat potential bank rush

By Danielle Robinson

NEW YORK, April 13 (IFR) - Standard Chartered (Other OTC: SCBFF - news) and National Bank of Canada nipped in Monday ahead of what could be a flurry of US bank issuance this week, selling a total of US$3.75bn in high-grade bonds on Monday.

Several new deals are expected after big banks release earnings, which begins Tuesday with JP Morgan and Wells Fargo (Hanover: NWT.HA - news) . Both names are expected to come to market soon after that.

"It feels shockingly quiet actually," one syndicate manager told IFR. Syndicates have been forecasting US$15bn-US$20bn this week, depending on whether banks follow through with trades.

"We're all waiting for a couple of US banks to come in after earnings, but apart from that there's not much of a pipeline for this week," the manager said.

Standard Chartered raised US$3bn in three, five and 10-year fixed-rate notes as well as a three-year floater, while National Bank of Canada came with a US$750m three-year covered bond.

Bookrunners Bank of America Merrill Lynch, BNP Paribas (Xetra: 887771 - news) , Deutsche Bank (Xetra: 514000 - news) and Standard Chartered itself priced the UK bank's US$750m three-year fixed-rate bond at a spread of T+85bp, or 5-10bp tighter than initial price thoughts of T+90-95bp.

It was a similar story on the US$1.25bn five-year and US$750m 10-year, which were respectively launched at 90bp and 130bp, or some 10bp tight to IPTs of 100bp and 140bp area.

As comps, investors largely looked at Standard Chartered's more liquid, short-dated September 2017s and September 2019s, which were being quoted with G-spreads of around 80bp.

Based on that curve, some bankers thought Standard Chartered, rated A2/A-/AA-, paid new issue concessions of anywhere between 5bp-10bp across all three fixed-rate tranches.

In the end, the three-year fixed was priced at 99.889 with a 1.70% coupon to yield 1.738%, the 2.25% five-year at 99.897 to yield 2.272%, and the 3.20% 10-year at 99.728 to yield 3.232%.

The US$250m three-year floater priced at par to yield three-month Libor plus 64bp.

NBC meanwhile stepped in with a US$750m 1.4% three-year covered that priced at 99.944 to yield 1.419%. The deal, rated Aaa/AAA/AAA, was led by BNP Paribas, Citigroup (NYSE: C - news) and NBF. (Reporting by Danielle Robinson; Editing by Paul Kilby and Marc Carnegie)