GE Capital does largest FDIC-backed deal, Weatherford, PacifiCorp sell bonds; new issues tighten

By Andrea Heisinger

New York, Jan. 5 - The start of a new year saw a smattering of deals price in the investment-grade primary market, with a large one from General Electric Capital Corp. for $10 billion overshadowing two smaller ones from Weatherford International Ltd. and PacifiCorp.

Issuance in the primary is predicted to see a jump in the next couple of days, a source said, especially on the heels of the largest Federal Deposit Insurance Corp. issue yet from GE Capital.

The secondary market was slightly calmer than the primary but is also expected to see an increase in business in the coming days.

GE Capital does FDIC deal

GE Capital priced its second deal backed by the FDIC's Temporary Liquidity Guarantee Program late Monday, this time for $10 billion.

The financing arm of General Electric had previously priced $6.5 billion in four tranches on Dec. 4. It then reopened the issue several times.

The new issue is likely to be reopened a number of times as well, a source close to the deal said.

The $2.5 billion of floating-rate notes due 2010 priced at par to yield three-month Libor plus 5 basis points, while the $1 billion of notes due 2012 priced at par to yield three-month Libor plus 30 bps.

A $2 billion tranche of notes due 2011 and a $4.5 billion tranche of notes due 2012 made up the remainder of the issue.

Full terms were not available at press time, the source said, because of the lateness of the pricing.

Bookrunners were Banc of America Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities Inc. and Morgan Stanley & Co., Inc.

The deal is the largest yet of the FDIC-backed offerings.

"We'll see more of these [FDIC deals]," a source said. "That's for sure. This one is one of the largest, but this goes on until June."

So far, mostly bank holding companies have tapped the FDIC program, although that is likely to change in the coming months as smaller, more regional names take advantage of pricing government-guaranteed debt.

About $100 billion was issued under the guarantee within the last few weeks of 2008.

PacifiCorp does $1 billion

Electricity provider PacifiCorp priced $1 billion of first-mortgage bonds in two tranches.

The $350 million of 5.5% 10-year bonds priced at 99.345 to yield 5.586%, or Treasuries plus 310 bps.

The $650 million of 6% 30-year bonds priced at 99.050 to yield 6.069%, or Treasuries plus 310 bps.

Banc of America Securities LLC, Barclays Capital Inc., BNP Paribas Securities and RBS Greenwich Capital ran the books.

Weatherford upsizes deal

Oil and gas technology company Weatherford International priced $1.25 billion of notes in two tranches, increasing the size from a planned $500 million in a single tranche, a source said.

The $1 billion of 9.625% 10-year notes priced to yield Treasuries plus 723 bps. This was tighter than price talk of 725 bps, a source said.

The $250 million of 9.875% 30-year notes priced to yield 10%, or Treasuries plus 698.2 bps, a source said.

Two sources close to the deal said they were unsure if there was any involvement from the junk side.

Bookrunners were Banc of America Securities, Barclays Capital, Deutsche Bank Securities, Goldman Sachs and UBS Investment Bank.

Primary gets running start

The new issue market for 2009 got off to a good start, a source said, thanks to the large issue from GE Capital.

"We knew it was coming after the New Year, but we weren't sure when," he said. "Most of these take a couple of days, so it was kind of surprising to see it price in one day."

The presence of corporate issuers was also encouraging, he said.

"They weren't the highest-rated names, but they needed to get some deals done, I guess."

PacifiCorp bonds tighten

The new PacifiCorp 6% bonds due 2039 were seen tightening slightly in the secondary by late afternoon, a trader said.

The bonds were seen at 307 bps bid, 292 bps offered, he said, in from pricing at 310 bps over Treasuries.

The second tranche of the issue, bonds due 2019, was not seen trading in the secondary.

Weatherford in 10 bps

Weatherford International's bonds due 2019 were seen in about 10 bps in late afternoon trading, a secondary source said.

The bonds priced at 725 bps over Treasuries and were trading at 715 bps bid, he said.

GE Capital sees high volume

GE Capital's outstanding 4.875% bonds due 2015 were seen at the top of trading early Monday afternoon. This came as the funding arm of General Electric was launching a $10 billion, four-tranche offering of notes.

Other financial names helped make up the top of the trading list.

JPMorgan Chase & Co. saw its 3.125% notes due 2011 at high volume, as did Bank of America NA and Bank of America Corp., which each had issues near the top of the list.

CDS spreads edge tighter

Credit default swap spreads for bank and broker names were seen unchanged to tighter late Monday afternoon, a trader said.

Bank CDS prices were unchanged to 5 bps tighter, while broker names were unchanged to 15 bps tighter.

Simon Property moves big

Mall operator Simon Property Group LP was seen as one of the day's big movers, with its 5.6% notes due 2011 widening about 140 bps late Monday.

This comes after recent word that the company would settle claims over fees on its gift cards.

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