Westpac, Scotiabank, Highwoods sell as market awaits FOMC decision; Autodesk active, tightens

By Aleesia Forni and Andrea Heisinger

New York, Dec. 11 - Spreads on investment-grade bonds moved tighter on Tuesday, sources said, and new bonds were priced by Westpac Banking Corp., Bank of Nova Scotia and Highwoods Realty, LP.

Westpac had the largest sale of the day, bringing $2 billion of five-year covered bonds backed by Australian prime mortgages.

Bank of Nova Scotia sold $1 billion of five-year notes at the tight end of guidance.

Real estate investment trust Highwoods Realty sold $250 million of 10-year notes to reduce amounts under a revolving credit facility.

There was also a reopening of 30-year bonds from Intel Corp. The tranche was part of the $6 billion sale that the semiconductor chip maker priced on Dec. 4.

Spreads narrowed about 4 basis points from Monday's levels, a source said.

"We didn't really see much impact, but there was tightening," she said.

Both tranches of Monday's issuance from Autodesk Inc. were among the day's most actively traded deals and closed the session 10 bps to 15 bps tighter.

Goldman Sachs' 6.75% notes due 2037 were also particularly active on Tuesday. The notes traded 1 basis point tighter on the day.

In other bank paper, Morgan Stanley's 5.625% notes due 2019 traded 13 bps wider.

The recent $1.25 billion two-tranche issuance from Simon Property Group, LP was quoted better during Tuesday's trading.

The day marked the start of a two-day meeting of the Federal Reserve Federal Open Market Committee. Any potential issuers for Wednesday are expected to at least launch their sales before any announcement in early afternoon of the New York session, the source said.

"They might extend QE3, so we'll see what comes out of it," a source said of the FOMC meeting.

Westpac sells covered bonds

Westpac Banking priced $2 billion of 1.25% five-year covered bonds (Aaa//AAA) to yield mid-swaps plus 50 bps, or Treasuries plus 61.9 bps, an informed source said.

The bonds were priced at the tight end of talk in the mid-swaps plus 51 bps area, plus or minus 1 bp, the source said.

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

Barclays, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Westpac Banking Corp. were bookrunners.

The bonds are backed by prime Australian residential mortgages.

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

Scotiabank sells $1 billion

The Bank of Nova Scotia priced $1 billion of 1.375% five-year senior notes to yield Treasuries plus 77 bps, a market source said.

The notes (Aa1/AA-/) were sold at the tight end of talk in the Treasuries plus 77 bps to 83 bps range.

Active bookrunners were Barclays and Scotia Capital USA Inc.

Proceeds will be added to the bank's funds and used for general business purposes.

The financial services company is based in Toronto.

Highwoods' 10-year notes

Highwoods Realty sold $250 million of 3.625% notes due 2023 (Baa3/BBB-/) to yield Treasuries plus 210 bps, an informed source said.

The sale was done at the tight end of guidance in the 210 bps to 215 bps over Treasuries range.

Bookrunners were Wells Fargo Securities LLC and Jefferies & Co. Inc.

The company plans to use the proceeds to reduce amounts outstanding under its $475 million revolving credit facility and for general corporate purposes.

The real estate investment trust is based in Raleigh, N.C.

Intel reopens long bond

Intel reopened its issue of 4.25% bonds due Dec. 15, 2042 to add $175 million, according to an FWP with the Securities and Exchange Commission.

The bonds (A1/A+/A+) were sold at a spread of Treasuries plus 140 bps.

Total issuance is $925 million, including $750 million priced on Dec. 4 at Treasuries plus 150 bps.

Bookrunners were Bank of America Merrill Lynch and Goldman Sachs & Co.

The semiconductor chip maker is based in Santa Clara, Calif.

Autodesk notes active

Autodesk's $750 million sale of notes in two tranches was active in the secondary market and trading better on Tuesday, a market source said.

The $400 million tranche of 1.95% five-year notes was quoted 10 bps tighter at 145 bps bid, 143 bps offered.

The notes priced with a spread of Treasuries plus 155 bps on Monday.

The $350 million tranche of 3.6% 10-year notes traded at 185 bps bid, 182 bps offered following Monday's pricing with a spread of Treasuries plus 200 bps.

The design software and services company is based in San Rafael, Calif.

Simon Property tightens

Simon Property's $1.25 billion two-tranche issuance was also trading tighter during the session.

The $750 million tranche of 1.5% five-year notes was quoted 5 basis points better at 90 bps bid, 88 bps offered.

The notes priced with a spread of Treasuries plus 95 bps on Monday.

Meanwhile, the $500 million of 2.75% 10-year notes traded 3 bps better, at 117 bps bid, 115 bps offered at midday.

Simon Property sold the notes with a spread of 120 bps over Treasuries.

The real estate investment trust for retail properties is based in Indianapolis.

Goldman Sachs firms

Goldman Sachs' 6.75% bonds due 2037 were among the day's most actively traded issues, closing the session at 307 bps bid, 1 bp tighter compared to Monday's levels.

Goldman priced the $2.5 billion of bonds at 190 bps over Treasuries in September 2007.

Morgan Stanley

The 5.625% notes from Morgan Stanley due 2019 traded actively on Tuesday and closed the session 13 bps weaker at 205 bps bid.

The bank sold $3 billion of the notes at 225 bps over Treasuries on Sept. 16, 2009.

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