Caterpillar Financial, Northern Natural Gas, Maiden sell as primary market takes a breather

By Aleesia Forni and Andrea Heisinger

New York, Aug. 22 - Sales of high-grade bonds were minimal on Wednesday as the new deal pipeline slowed amid a summer slump.

There was a $300 million sale of two-year floating-rate notes from Caterpillar Financial Services Corp.

Northern Natural Gas did a private sale of $250 million of 30-year bonds.

In the preferred stock market, Maiden Holdings Ltd. announced and priced a $150 million issue of perpetual preference shares.

Minutes from the latest Federal Reserve meeting revealed talks about steps that could be taken for economic stimulus if needed. Some are expecting solid action to be taken at September's meeting or later in the fall.

"That was kind of a nonevent," a syndicate source said.

Although Greece has been back in the news, that's "nothing new," the source said.

The slowdown in bond offerings can be attributed to a holiday ahead and a final break to end the summer.

"People are just slowing down ahead of the holidays," a source said, referring to the Labor Day break coming up.

The Markit CDX Series 18 North American Investment Grade index was unchanged from Tuesday's close at a spread of 99 basis points.

Caterpillar's short floaters

Caterpillar Financial Services priced $300 million of two-year floating-rate medium-term notes, series G, at par to yield Libor plus 15 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunner was Citigroup Global Markets Inc.

The funding arm of heavy equipment maker Caterpillar Inc. is based in Nashville.

Northern's $250 million deal

Northern Natural Gas priced $250 million of 4.1% 30-year bonds (A2/A/A) to yield Treasuries plus 130 bps, an informed source said.

There wasn't any official talk for the deal, the source said, adding that they went straight to the launch at 130 bps.

"It was a small deal, nothing too exciting," the source said.

The sale was done under Rule 144A and Regulation S.

BNP Paribas Securities Corp. and Wells Fargo Securities LLC were the bookrunners.

The interstate natural gas pipeline is based in Omaha.

Maiden Holdings' preferreds

Maiden Holdings priced $150 million of 8.25% series A noncumulative perpetual preference shares, according to a press release.

The deal came in line with price talk from earlier in the day in the 8.25% area.

"It's doing well," a trader said at midday after seeing the paper at $24.70 bid in the gray market.

But after the market closed, a market source said he saw only bids for paper, no offers. The bid was $24.88, he said.

"It's not a well-known entity," he said of the lack of offers. However, he did note that it was "kind of a juicy yield."

Maiden intends to list the preference shares on the New York Stock Exchange under the ticker symbol "MHPA."

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including possible common share buybacks or trust preferred redemptions.

Maiden Holdings is a Hamilton, Bermuda-based reinsurance holding company.

Stephanie N. Rotondo contributed to this review

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