Norfolk Southern, Talisman, EIB, Mass Mutual, Ameriprise among issuers; new deals tighten

By Andrea Heisinger and Paul Deckelman

New York, May 27 - The primary was full of new deals Wednesday from names including Ameriprise Financial, Inc., Allegheny Technologies, Inc., Norfolk Southern Corp., Talisman Energy Inc., Goldman Sachs Group Inc., European Investment Bank, Westpac Banking Corp. and Massachusetts Mutual Life Insurance Co.

At least two of the deals, those from Norfolk Southern and Talisman Energy, were significantly oversubscribed.

Issuance is set to remain steady for the remainder of the week, source said.

In the secondary arena on Wednesday , a market source said the CDX Series 12 North American high-grade index rose by 1 basis point to a mid bid-asked spread level of 147 bps.

Advancing issues continued to trail decliners by an eight-to-seven ratio.

Overall market activity, reflected in dollar volumes, climbed by 58% from Tuesday's relatively restrained post-holiday levels.

Spreads in general were seen tighter, in line with higher Treasury yields; for instance, the yield on the benchmark 10-year issue was 18 bps wider at 3.73%.

New issues continued to trade tighter, market participants said, including Talisman Energy's new paper.

Norfolk Southern does quick deal

Transportation and shipping company Norfolk Southern priced $500 million 5.9% 10-year senior notes Wednesday in a quick deal. It was announced by mid-morning and had priced by early afternoon, a source close to it said.

The notes were talked at the 250 bps area, and priced at the tight end of that, coming in at 237.5 bps over Treasuries.

They were several times oversubscribed, an informed source said.

Proceeds will be used for general corporate purposes by the company, which is based in Norfolk, Va.

Banc of America Securities LLC, Goldman Sachs & Co. and Wachovia Capital Markets were bookrunners.

Goldman Sachs reopens 10-year

Goldman Sachs Group reopened an issue of 7.5% 10-year notes to add $1 billion early in the day. The reopening was done by early afternoon, a source said.

The reopened notes priced at 337.5 bps over Treasuries, which is significantly lower than the original sale's level of Treasuries plus 500 bps.

Total issuance is $3 billion, including $2 billion that priced Jan. 29.

Goldman Sachs handled the books for the deal from the New York City-based financial services and bank holding company.

Talisman Energy increases offering

Canada's Talisman Energy priced an upsized $700 million of 7.75% 10-year notes at 412.5 bps over Treasuries.

The oil and gas exploration and production company is initially investing proceeds in short-term marketable securities, and later using them to fund operations and repay securities. They may also be used to reduce borrowings under credit facilities.

The size was upped from $500 million, a source close to the sale said.

Banc of America Securities, BNP Paribas Securities, Citigroup Global Markets and RBC Capital Markets were bookrunners for the Calgary, Alta.-based company.

Price guidance for the sale was the 425 bps area, with a margin of plus or minus 12.5 bps, a source close to the sale said. The deal came in at the tight end of that talk. There was "north of $7 billion" on the books, making it more than 10 times oversubscribed.

Ameriprise prices preferred

Ameriprise Financial priced $200 million of 7.75% 30-year senior notes at par of $25 in a sale that was announced Tuesday and went overnight.

The Minneapolis-based financial planning and services company is using proceeds for general corporate purposes.

Banc of America, Citigroup, UBS Investment Bank and Wachovia Capital Markets were bookrunners.

A source who worked on the sale said she hoped it would open the door to the return of preferred and other retail deals to the high-grade market. They have been absent for much of the past year.

"Hopefully we'll start seeing one or two more a week," she said. "It would be nice to see them trickle back."

There was an offering of mortgage bonds with par of $25 on May 14 from Entergy Texas Inc.

Westpac prices floaters

Westpac Banking priced $350 million of three-year floating-rate notes at par to yield three-month Libor plus 39 basis points, a market source said, with the sale done via Rule 144A.

RBS Securities ran the books.

The banking and financial services company is based in Sydney, Australia.

EIB sells $3.5 billion

The European Investment Bank sold $3.5 billion of 3.125% five-year global notes Wednesday morning at Treasuries plus 37.5 basis points, an informed source said.

Bookrunners were Barclays Capital, Citigroup Global Markets and Deutsche Bank Securities.

The financing institution for the European Union is based in Kirchberg, Luxembourg.

Mass Mutual sells 30-year notes

Massachusetts Mutual Life Insurance sold $750 million of 8.875% 30-year notes to yield 9% via Rule 144A, a market source said late Wednesday.

Barclays Capital and Morgan Stanley & Co. were bookrunners.

Primary ups volume

A sleepy start to the short week on Tuesday turned into an eight-deal day Wednesday as issuers jumped back into the market.

The names were a mix of industrial, financial and insurance.

"Today was a strong day," a syndicate source said. He name-checked Mass Mutual and Norfolk Southern as some of the hallmark deals.

"I think people were waiting for a strong day," he said. "Mid-week is looking up. We probably have two or three more deals [for the week]."

Volume could be sizable for the remainder of the week.

"We could be this busy easily for the next couple of days," a source said.

They said there was no surprise at the increase in deals from Tuesday.

"Everyone was just getting everything in order to come [Wednesday]," he said. "It probably won't be as busy tomorrow, but we'll still see deals."

Allegheny Technologies tracks firmer

A trader saw Allegheny Technologies' $350 million offering of 9 3/8% notes due 2019, upsized from $300 million originally, trading at firmer levels.

The Pittsburgh-based diversified metals producer's bonds - being quoted on a dollar-price basis, rather than on a spread-versus Treasuries basis, he said - priced at 99.204 to yield 9½%. He quoted them as having then moved up to 100½ bid, 101 offered.

Talisman tightens up

Another trader said it was "a day of tightening - but it was a strange day. Stuff tightened and the market fell. Whatever."

When the new Talisman Energy 7.75% notes due 2019 were freed for secondary activity, he saw those bonds trading at 385 bps bid, 380 bps offered.

Earlier in the session, the Calgary, Alta.-based independent oil and gas exploration and production company had priced the $700 million issue, upsized from its original $500 million, at a 412 bps over spread.

ConocoPhillips keeps firming

Another recently priced energy credit, ConocoPhillips Co.'s 4.60% notes due 2016, were seen busily trading around at tighter levels, with a market source quoting those bonds at 130 bps bid.

That was about 10 bps tighter on the session, as well as being solidly in from the 250 bps over level at which the Houston-based energy major had priced that $1.5 billion of bonds - part of a three-part, $3 billion mega-dale on May 18.

Marathon moves lower

Also in the volatile energy patch, Marathon Oil Canada's 8.375% notes due 2012 were seen as a major downside mover, despite the market's generally positive trend.

A market source saw the bonds of the Houston-based energy company's Canadian unit as having widened more than 30 bps on the session to end at around the 400 bps over mark.

Financials seen firmer

Among actively traded bank credits, a market source saw Bank of America Corp.'s 7.375% notes due 2014 at the 370 bps mark - in about 37 bps on the session. It was one of the most actively traded bonds on the day, with over $82 million traded heading into late afternoon.

The source also saw Citigroup Inc.'s 8.50% notes due 2019 tighter by 26 bps on the session at 450 bps over.

The big New York banking company had priced its $2 billion issue on May 15 at 562.5 bps over.

Bank CDS costs mixed

In the credit-default swaps market, a trader saw the cost of protecting holders of big-bank paper against a possible default anywhere from 10 bps tighter on the day to 10 bps wider.

He saw B of A's debt-protection costs 10 bps wider at 153 bps bid, 163 bps offered, although he saw B of A's Merrill Lynch unit's CDS costs 10 bps tighter at 225 bps bid, 255 bps offered.

Citi's debt-protection cost tightened by 10 bps to 335 bps bid, 355 bps offered.

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