Bristol-Myers Squibb, AMB Property price; Fifth Third, KLA-Tencor announce upcoming issues

By Andrea Heisinger

Omaha, April 28 - The investment-grade market remained strong Monday, allowing for new issues from Bristol-Myers Squibb Co. and AMB Property LP.

These issues kicked off a week that sources said will not even come close to touching last week's record volume of around $40 billion, but will have a moderate amount of issues to keep everyone busy.

"We're not expecting this week to be as big as last week," a market source said. "Once you strip out all of the self-led deals, you end up with a relatively moderate amount."

There are about $12 to $15 billion in new issues expected for the week, the source said, adding "everyone's sitting on at least one deal."

Bristol-Myers' small premium

Bristol-Myers priced $1.6 billion in two tranches.

The $600 million 5.45% 10-year notes priced at 99.825 to yield 5.473% with a spread of Treasuries plus 165 basis points.

The $1 billion of 6.125% 30-year notes priced at 99.24 to yield 6.181% with a spread of Treasuries plus 165 bps.

Banc of America Securities LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Inc. were bookrunners.

Unlike many recent issuers, the company did not pay a hefty new issue premium.

"They paid hardly any premium," a market source said. "I would say it was about 10 bps. It's a good industrial name, with no hair on it."

The source said the company had outstanding 30-year notes that were trading around 157 bps midday Monday.

AMB upsizes

AMB Property priced an upsized $325 million of 6.3% five-year notes at 99.853 to yield 6.332% with a spread of Treasuries plus 320 bps.

The size was increased from $250 million.

Banc of America, J.P. Morgan and Morgan Stanley were bookrunners.

Other issues were announced Monday and expected to price Tuesday.

Fifth Third talks trust preferreds

Fifth Third Capital Trust VII announced an issue of trust preferred securities due 2068.

Price talk is in the 8.875 to 9% range, a market source said.

Morgan Stanley, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Investment Bank and Wachovia Capital Markets LLC are bookrunners.

Semiconductor and microelectronics company KLA-Tencor Corp. announced an issue of senior notes.

Merrill Lynch is bookrunner.

Fed, data calms activity

The tone Monday was largely unchanged from Friday, with Treasuries about 3 bps tighter, a source said.

"It's pretty much a non-event today," he said.

Some potential issuers held off, not because of market conditions, but because of upcoming events like this week's Federal Reserve meeting - results to be announced Wednesday - and housing and employment data released throughout the week.

About 60% of people say there will be a rate cut announced by the Fed, a market source said.

"A lot of people are hoping they won't cut [the rate] because it will help the dollar," he said.

Another source said: "A 25 bps cut seems pretty certain."

Issuance is expected to pick up slightly Tuesday, even ahead of the Fed meeting. Wednesday, things will likely be quiet for at least the first half of the day.

"It will be a pretty typical Fed meeting day," a source said. "It's not out of the question that someone will announce something and then wait and price it right after a Fed announcement."

Monday was largely a quiet day in the secondary market as well.

Cash and CDS spreads were roughly 10 bps wider, a market source said.

"Things are a little better," a secondary source said, comparing trading to the quiet of last week.

"It's still pretty quiet, but things continue to do better [tighten] after pricing."

The$1.7 billion, three-tranche issue of notes from Dr. Pepper Snapple Group continued to trade after pricing Friday.

The 6.12% five-year notes were seen trading at 265 bps bid, 260 bps offered versus Treasuries plus 295 bps at pricing, the 6.82% 10-year notes were at 266 bps bid, 263 bps offered versus Treasuries plus 295 bps pricing, and the 7.45% 30-year notes were at 256 bps bid, 250 bps offered versus Treasuries plus 287.5 bps.

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