Council of Europe prices; issuers shift sales to coming week; Glencore notes trade mixed

By Aleesia Forni and Andrea Heisinger

New York, May 23 - The high-grade primary market was quiet on Thursday as Asian markets woes rippled into existing ones in the United States.

Council of Europe Development Bank sold $1.25 billion of five-year notes.

A market source said there were no new corporate bonds sales expected Friday.

A contraction of manufacturing data from China and a possible drop in Japan's economy seemed to cause issuers to shy away from pricing bonds on the day.

"I think everyone just marked it as a 'no go' [day]," a market source said late Thursday.

Elsewhere in the market, there was also some concern over possible easing of economic stimulus measures in the coming months, following remarks made before a Congressional committee on Wednesday by Federal Reserve chairman Ben Bernanke.

Issuers looking to price debt are instead holding off until after Monday's Memorial Day holiday, a syndicate source said early in the week.

In trading of preferred stocks, National Retail Properties Inc.'s $250 million of 5.7% series E cumulative preferreds freed to trade early in the day, a trader said.

The deal priced on Wednesday.

The trader quoted the paper at $24.78 bid, $24.83 offered.

The Markit CDX Series 20 North American Investment Grade index was 1 basis point wider at a spread of 73 bps at the day's close.

Meanwhile, high-grade secondary saw Glencore Funding LLC's new notes trading mixed on Thursday, one trader said during the session.

The three tranches were quoted 2 bps better to 3 bps wider on the day.

In other secondary action, Entergy Arkansas, Inc.'s recently issued notes traded tighter on Thursday.

"We're definitely winding down," one trader said of the day's activity.

Council of Europe prices

Council of Europe Development Bank priced $1.25 billion of 1.125% five-year senior notes (Aaa/AA+/AA+) at a spread of mid-swaps plus 12 bps, or Treasuries plus 29 bps, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

The financing and development institution for social projects in Europe is based in Paris.

Glencore gives terms

Glencore Funding gave some terms of its $5 billion of notes (Baa2/BBB/) priced in five tranches on Wednesday, according to a press release Thursday.

Pricing was done under Rule 144A and Regulation S.

The sale includes $500 million of three-year floating-rate notes, $1 billion of 1.7% three-year notes, $500 million of floaters due 2019, $1.5 billion of 2.5% bonds due 2019 and $1.5 billion of 4.125% 10-year notes.

Bookrunners were BNP Paribas Securities Corp., BofA Merrill Lynch, Credit Suisse Securities (USA) and RBS Securities Inc.

The notes are guaranteed by Glencore Xstrata, Glencore International AG and Xstrata (Schweiz) AG.

Proceeds are being used to repay a portion of debt and for general corporate purposes.

The funding vehicle for Glencore International plc, a privately held supplier of commodities and raw materials to industrial consumers, is based in Baar, Switzerland.

Honda sells floaters

American Honda Finance Corp. sold $1.25 billion of three-year floating-rate notes (A1/A+/) at par to yield Libor plus 37.5 bps, a market source said.

The notes were priced under Rule 144A and Regulation S on Wednesday.

Credit Suisse Securities (USA), Deutsche Bank Securities Inc. and Mizuho Securities USA Inc. were bookrunners.

Proceeds are being used for general corporate purposes.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Glencore trades mixed

Switzerland's Glencore Funding's three-part deal, which priced Wednesday, traded mixed during Thursday's session, according to a trader.

The $1 billion of 1.7% three-year notes traded 2 bps better at 128 bps bid, he said.

The notes sold with a spread of 130 bps over Treasuries.

The $1.5 billion of 2.5% bonds due 2019 was quoted 1 bp tighter at 169 bps bid following Wednesday's sale at a spread of 210 bps over Treasuries.

Meanwhile, the $1.5 billion of 4.125% 10-year notes traded 3 bps wider at 213 bps bid.

Glencore priced the notes on Thursday at a spread of Treasuries plus 210 bps.

The sale included $500 million of three-year floating rate notes and $500 million of floaters due 2019.

Entergy firms

The recent deal from Entergy Arkansas traded 2 bps better compared to levels seen late Wednesday, a trader at another desk said.

The $250 million of 3.05% 10-year first mortgage bonds were seen at 97 bps bid, 94 bps offered following Wednesday's sale at a spread of Treasuries plus 105 bps.

The utility company is based in Little Rock, Ark.

Stephanie N. Rotondo contributed to this review.

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