General Mills, National City price issues to end week with more than $18 billion in new deals

By Andrea Heisinger

Omaha, Aug. 24 - Offerings from General Mills, Inc. and National City Capital Trust IV closed out a steady week of new investment-grade issues on a quiet Friday.

One trader said the spreads in the market were wide when trading began, but the market closed one to two basis points tighter to end the week.

General Mills priced an upsized $700 million in 5.65% five-year notes at a spread of Treasuries plus 127 basis points. The offering was initially $500 million.

National City had $450 million of 60-year 8% enhanced TruPS trust preferred securities price at par of $25 per security.

More than $18 billion in new issues priced this week from both companies and investment banks.

Deutsche Bank AG, London Branch priced $300 billion in 10-year notes while Goldman, Sachs & Co. had $2.5 billion in 10-year senior notes. Ten-year notes were popular among investment banks, as Bank of America Corp. issued $1.5 billion of them.

Other large issuers for the week included The Royal Bank of Scotland Group PLC with $2 billion in two-year floating-rate notes, American Express Co. with $1.5 billion in 10-year notes, XTO Energy Inc. with $1 billion of senior notes in three tranches, and MidAmerican Energy Holdings Co. with $1 billion in 30-year notes.

There were several smaller issues. Starbucks Corp. priced $550 million in 10-year senior notes, Lincoln National Corp. did $300 million in five-year senior notes and Union Pacific Corp. priced $500 million in five-year notes.

Lehman Brothers Holdings Inc. was another investment bank with a new issue, pricing a total of $750 million of 15-year floating-rate put bonds. That offering was upsized through an add on.

Consolidated Edison Co. of New York Inc. priced $525 million in 30-year debentures, Kinder Morgan Energy Partners LP had $500 million in five-year senior unsecured notes, Anheuser-Busch Companies Inc. brought $500 million in 30-year bonds.

Smaller issues came from Coventry Health Care Inc. with $400 million in senior notes due 2014, John Deere Capital Corp. with $300 million five-year senior notes, and Georgia Power Co. pricing $250 million in senior insured monthly notes.

The healthy amount of new issues reflects some of the volatility in the market subsiding, a market source said.

"Right now it feels like it will stay steady next week," the source said.

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