John Deere, Rentenbank tap market; EDF prices hybrids; spreads firm; Time Warner Cable active

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 14 - Electricite de France SA, Landwirtschaftliche Rentenbank and John Deere Capital Corp. tapped Tuesday's primary market during another strong session for the high-grade bonds space.

Electricite de France came to market with a $1.5 billion issue of 5.625% perpetual subordinated notes sold at Treasuries plus 288.1 basis points.

John Deere sold a $500 million issue of 1.05% notes due Dec. 15, 2016 at 33 bps over Treasuries, or 99.8, to yield 1.12%.

Pricing was at 99.059 to yield 5.75%.

Meanwhile, Landwirtschaftliche Rentenbank priced a $200 million add-on to its existing floating-rate notes due Dec. 5, 2018.

The floaters have a coupon of Libor plus 11 bps and priced at 100.0056.

Toyota Motor Credit Corp. was also in the market during Tuesday's session, though full details were not available at press time.

Tuesday's session also saw KfW set price talk for its proposed issue of notes at mid-swaps plus 10 bps, according to an informed source.

In the preferred stock space, JPMorgan Chase & Co. priced $2 billion of 6.75% series S fixed-to-floating rate perpetual preferred stock (Ba1/BBB/BBB-) on Tuesday following its earnings release, a market source said.

The company reported a drop in profits of 7.3% and fourth-quarter earnings of $5.28 billion.

The $1,000-par preferred stock was priced at par. Price talk was set at 6.75%.

Investment-grade bonds traded mostly better over the day, market sources said.

The Markit CDX North American Investment Grade series 21 index firmed 1 bp to a spread of 65 bps.

In the secondary market, Time Warner Cable Inc.'s bonds stayed active following Charter Communications Inc.'s rebuffed bid of about $132.50 a share for the company on Monday, according to market sources.

Time Warner Cable's paper was among the most active investment-grade issues in late 2013 on speculation of a takeover by Charter or Comcast Corp., sources said.

The company's notes (Baa2/BBB/BBB) currently trade like BB- bonds, according to one market source.

EDF hybrids

Electricite de France priced $1.5 billion of 5.625% perpetual subordinated notes (A3/BBB+/-A) in Tuesday's session with a spread of Treasuries plus 288.1 bps, according to a market source.

Pricing was at 99.059 to yield 5.75%.

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

The notes will be non-callable for 10 years.

Citigroup Global Markets Inc., Credit Suisse Securities and Societe Generale CIB were the global coordinators.

BofA Merrill Lynch, Barclays, HSBC Securities, Mitsubishi and Nomura were the bookrunners.

The main electricity generation and distribution company in France is based in Paris.

EDF details five-part sale

The hybrid issuance comes on the heels of EDF's pricing of $4.7 billion of senior notes on Tuesday in five tranches, taking advantage of "excellent market conditions witnessed in early 2014," according to a company release.

The sale included $750 million of floating-rate notes due 2017 priced at par to yield Libor plus 46 bps.

A $1 billion tranche of 1.15% notes due 2017 priced at Treasuries plus 55 bps, and a $1.25 billion tranche of 2.15% notes due 2019 priced at Treasuries plus 80 bps.

Meanwhile, $1 billion of 4.875% issue of 30-year bonds was sold with a spread of Treasuries plus 130 bps.

Finally, $700 million of 6% 100-year notes priced with a spread of 240 bps over Treasuries.

The sale included the largest 100-year bonds priced by a European corporate issuer ever, the release stated.

John Deere prices tight

John Deere priced $500 million of 1.05% medium-term notes (A2/A/) due Dec. 15, 2016 with a spread of 33 bps over Treasuries, according to an FWP filed with the Securities and Exchange Commission and a market source.

Pricing was at 99.8 to yield 1.12%.

The notes sold at the tight end of talk.

Deutsche Bank Securities Inc., HSBC Securities and J.P. Morgan Securities LLC were the joint bookrunners.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

Rentenbank adds on

Landwirtschaftliche Rentenbank tapped its existing issue of floating-rate notes (Aaa/AAA/AAA) due Dec. 5, 2018 to add $200 million in Tuesday's session, according to an informed source.

The notes have a coupon of Libor plus 11 bps and were priced at 100.0056.

Citigroup Global Markets and Deutsche Bank Securities were the bookrunners.

The total issue size is now $700 million.

The notes are guaranteed by the Federal Republic of Germany.

The German development agency for agribusiness is based in Frankfurt.

KfW sets talk

KfW set talk for its planned benchmark issue of notes at mid-swaps plus 10 bps on Tuesday, according to an informed source.

Barclays, Goldman Sachs & Co. and Morgan Stanley & Co. are the joint bookrunners.

The German government-owned development bank is based in Frankfurt.

JPMorgan sells preferreds

JPMorgan Chase & Co. priced $2 billion of 6.75% series S fixed-to-floating rate perpetual preferred stock (Ba1/BBB/BBB-) on Tuesday, a market source said.

The $1,000-par preferred stock was priced at par.

Price talk was set at 6.75%.

JPMorgan was the underwriter.

The notes are callable on Feb. 1, 2024.

The bank is based in New York City.

Time Warner Cable active

In the secondary market on Tuesday, Time Warner Cable's 4% notes due 2021 traded from 225 bps to 230 bps over the day, according to a trader.

Time Warner Cable sold $1 billion of the notes at a spread of 210 bps over Treasuries in 2011.

Also, Time Warner Cable's 4.5% senior debentures due 2042 traded between 256 bps and 265 bps over the session, the trader said.

Time Warner Cable priced $1.25 billion of the debentures in August 2012 at a spread of Treasuries plus 183 bps.

The broadband communications company is based in New York City.

Bank/brokerage CDS costs down

Investment-grade bank and brokerage CDS prices declined on Tuesday, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 76 bps bid, 80 bps offered. Citigroup Inc.'s CDS costs firmed 1 bp to 69 bps bid, 72 bps offered. JPMorgan Chase & Co.'s CDS costs tightened 2 bps to 66 bps bid, 69 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 39 bps bid, 42 bps offered.

Merrill Lynch's CDS costs firmed 2 bps to 78 bps bid, 84 bps offered. Morgan Stanley's CDS costs declined 1 bp to 86 bps bid, 90 bps offered. Goldman Sachs Group, Inc.'s CDS costs tightened 1 bp to 89 bps bid, 93 bps offered.

Paul Deckelman and Christine Van Dusen contributed to this review.

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