Sierra Pacific Power prices, Ontario plans bond issue; secondary sees McCormick tighten, Goldman wider

By Andrea Heisinger

New York, Aug. 27 - The week continued its slow wind down Wednesday, with Sierra Pacific Power Co. pricing an issue ahead of the long weekend.

There may be a couple of scattered issues in the remainder of the week, but the utility's offering is likely one of the last until September, sources said.

The secondary remained quiet, traders said, with little volume and few issuers showing dramatic movement in levels.

Sierra Pacific prices deal

Electric and natural gas provider Sierra Pacific Power priced $250 million in 5.45% five-year first and refunding mortgage notes Wednesday.

The notes priced at 99.41 to yield 5.494% with a spread of Treasuries plus 247 basis points.

The issue came at the tight end of price talk, which was for a spread in the 250 bps area, a source close to the deal said.

Credit Suisse Securities and Lehman Brothers Inc. ran the books.

Ontario announces bond issue

The Canadian Province of Ontario announced in a 424B2 Securities and Exchange Commission filing Wednesday that it will issue unsecured bonds.

Whether or not the issue had priced was not available at press time.

The bonds are non-callable, with proceeds to be used for general provincial purposes.

The issue is coming off a $5 billion shelf registration, according to the SEC filing.

McCormick happy with issue

Spice company McCormick & Co., Inc. thought its $250 million issue of 5.25% five-year notes went well, spokesperson John McCormick said in an e-mail.

The company chose the five-year notes because of the maturity schedules of its existing debt portfolio, he said. The timing followed the acquisition of rival spice company Lawry's in July.

It was a $604 million acquisition.

Issuers look to September

The market tone Wednesday was "decent," but likely won't be enough to convince issuers to come into the market this week.

Anyone looking at pricing before September has likely already done so, a source said, adding that there may be a couple of small issues scattered in the remaining two days of August trading days.

"We're not going to see anything big, that's for sure," he said. "Everyone's just waiting until the end of the week, unless their week is already over."

Another source described Wednesday's tone as "pretty quiet" and said it was difficult to tell what impact some of the day's headlines had on issuers because of the light volume.

Among the positive news was the release of durable goods order numbers for July by the U.S. Commerce Department, which were better than analysts' predictions.

"Equities had a decent day," a source said. "It was pretty low volume so it's hard to extrapolate. Really, nothing happened [Wednesday]."

McCormick bonds tighten

The recent issue of 5.25% five-year senior unsecured notes from McCormick was seen tighter Wednesday, a day after pricing.

The notes were at 219 bps bid, 215 bps offered, which was a few basis points tighter than the 223 bps price, a secondary source said.

Sierra Pacific unchanged in secondary

The new Sierra Pacific 5.45% five-year notes were seen slightly wider to unchanged in the secondary market after pricing Wednesday afternoon, a source said.

The notes priced at 247 bps, and were seen at 248 bps bid, 243 bps offered.

There was little volume in the secondary Wednesday afternoon, a source said.

"Month's end is about all that's happening," he said. "There's nothing going on."

GE tightens, Goldman wider

Outstanding 5% notes due 2011 from General Electric Capital Corp. were one of the day's biggest movers Wednesday, coming in more than 15 bps.

This followed a successful euro offering Tuesday.

At the other end of the spectrum were the 5.75% notes due 2016 from Goldman Sachs Group Inc., which were seen between 15 and 20 bps wider.

Shares of its stock were also down after it was revealed the company is part of an inquiry by the U.S. attorney general's office into the bank's relationship with Fidelity Investments over auction-rate security sales.

Goldman's 6.15% notes due 2018 were seen at the second-highest volume of the day in mid-afternoon trading.

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