NWB Bank announces short bonds; primary barren on euro zone fears; secondary spreads widen

By Aleesia Forni and Andrea Heisinger

New York, March 18 - A sale was announced on Monday by Nederlandse Watershchapsbank NV, but the investment-grade bond market was otherwise quiet on renewed fears about the financial stability of the euro zone as banks in Cyprus neared collapse.

The issuer, known as NWB Bank, is expected to price a benchmark size offering of five-year notes on Tuesday.

Boston Properties Inc. priced $200 million of $25-par series B cumulative redeemable preferred stock. The sale was upsized from $150 million.

A trader quoted the issue in a $24.70 to $24.90 context at midday. A trader saw the issue closing out at $24.80 bid.

Meanwhile, Wells Fargo & Co.'s new $575 million of 5.25% series P class A noncumulative perpetual preferreds - a deal that priced on Friday - freed to trade at noon ET, a trader said.

He saw the preferreds at $24.80 as of midday.

Treasury yields dropped on fears about the banking crisis in Cyprus. Banks in the small country remained closed on Monday as officials from the European Union worked on a bailout plan. Those who have money deposited in Cyprus' banks may have to pay a one-time tax as a condition of the European Union's bailout of about $13 billion.

A source said after the close on Monday that there are "at least a couple of financials" among the issuers looking to tap the market on Tuesday. Some companies were sniffing around on Monday morning, but ultimately decided to wait and see if conditions improved, the source added.

"I know we had a couple stand down," he said. "We'll know by later tonight about [Tuesday's deals]."

The Markit CDX Series 18 North American Investment Grade index widened 1 basis point to a spread of 80 bps on Monday.

The investment-grade secondary market began on a quieter note on Monday, one market source said early during the session, and spreads continued to trade weaker on light trading volumes as the session wore on.

Bank and financial paper was trading 3 bps to 5 bps wider, according to one trader.

However, the recent deal from Ventas Realty LP was quoted 21 bps better on the day, the trader added.

NWB Bank preps bonds

Nederlandse Watershchapsbank has announced a benchmark size sale of three-year senior notes (Aaa/AAA/) to be priced under Rule 144A and Regulation S, an informed source said.

The size of the bond sale, which is expected to be priced on Tuesday, will be at least $500 million and possibly $1 billion, the source said. Whispered guidance is in the mid-swaps plus mid 20 basis points area.

Bookrunners are Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and RBC Capital Markets LLC.

NWB Bank was in the U.S. bond market with a $1 billion sale of 1.25% three-year global notes priced at Treasuries plus 78.2 bps on Oct. 11, 2011.

The financial services company for the public sector is based in the Hague, the Netherlands.

Boston Properties preferreds

Boston Properties has priced $200 million of 5.25% series B cumulative redeemable preferred stock (expected rating: Baa3/BBB/BB+), a market source reported.

The size was increased from $150 million.

The preferreds will be issued as depositary shares representing a 1/100th interest.

Price talk was 5.25% to 5.375%, according to a trader.

BofA Merrill Lynch, Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC are the joint bookrunners.

Boston Properties will apply to list the new issue on the New York Stock Exchange under the ticker symbol "BXPPB."

Proceeds will be contributed to an operating partnership in exchange for preferred units. The operating partnership will then use the funds for general corporate purposes, including investment opportunities and debt reduction.

The real estate investment trust is based in Boston.

Ventas notes firm

Ventas Realty's recent notes were quoted at 110 bps bid, 105 bps offered during Monday's session, one trader said.

The notes priced on Thursday at a spread of Treasuries plus 132 bps.

The real estate investment trust for housing and health care properties is based in Chicago

Stephanie N. Rotondo contributed to this review

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