Eaton, Florida Power & Light, Disney, Union Bank among new issuers; Bank of America, GE Capital firm

By Andrea Heisinger and Paul Deckelman

New York, March 11 - New deals kept coming Wednesday, building on the previous day's momentum and leading Eaton Corp., Florida Power & Light Co., Walt Disney Co., Union Bank, NA and Export Development Canada to enter the primary market.

Market tone was good in the morning, a source said, which led to a lot of "go" calls.

In the secondary sphere on Wednesday, a market source said the widely followed CDX Series 11 North American high-grade index was wider by 3 basis points on the day to a mid bid-asked spread level of 245 bps from 242 bps on Tuesday.

Advancing issues jumped ahead of decliners, by a not quite nine-to-seven ratio. Overall market activity, reflected in dollar volumes, fell by 10% from the levels seen on Tuesday.

Spreads in general were seen wider, in line with falling Treasury yields; for instance, the yield on the benchmark 10-year issue declined by 10 bps to 2.90%.

The new Walt Disney Co. and Florida Power & Light bonds were seen little changed from the respective spread levels at which those deals had priced earlier in the session.

Meanwhile, financial issues like Bank of America Corp. and General Electric Capital Corp. were seen having improved on the day, although they gave up some of their early gains to finish only moderately tighter.

Disney offers 10-year notes

Walt Disney Co. priced $500 million of 5.5% 10-year global notes at Treasuries plus 262.5 bps. This 262.5 bps level was also where the deal was talked, a source close to the issue said.

He said the notes were about 2.5 times oversubscribed.

A source away from the deal said the spread was 40 bps cheaper than the company's existing paper.

The media and entertainment company is based in Burbank, Calif.

Another source called it "a good name who can always get a deal done."

Books were run by J.P. Morgan Securities Inc., Deutsche Bank Securities and HSBC Securities.

Union Bank prices FDIC deal

Union Bank, a commercial bank based in San Francisco, sold $1 billion of FDIC-backed notes in two tranches.

The deal was originally talked to include a three-year fixed-rate tranche, a source away from the sale said.

"I'm not sure what happened there," he said.

The $500 million of two-year floating-rate notes priced at par to yield three-month Libor plus 8 bps.

Another $500 million tranche was of three-year floaters priced at par to yield three-month Libor plus 20 bps.

Barclays Capital, Morgan Stanley & Co. and Credit Suisse Securities were bookrunners.

Eaton prices two tranches

Power management and technology company Eaton priced $550 million of senior unsecured notes in two tranches.

A tranche of 10-year notes was added, with the company's original filing with the Securities and Exchange Commission proposing in a single five-year tranche.

That $250 million of 5.95% five-year notes priced at Treasuries plus 400 bps.

The tranche of 6.95% 10-year notes was increased from $250 million to $300 million, with pricing at 410 bps over Treasuries.

Both tranches came in near where they were talked, a source said.

Banc of America Securities LLC, Goldman Sachs & Co. and UBS Investment Bank were bookrunners.

Canadian credit agency sells notes

Ottawa-based Export Development Canada priced $1.5 billion of 2.375% three-year notes at Treasuries plus 99.6 bps.

The country's export credit agency used Citigroup Global Markets, HSBC Securities, Morgan Stanley & Co. and TD Securities as bookrunners.

Florida Power sells mortgage bonds

Florida Power & Light, a subsidiary of FPL Group, Inc., priced $500 million of 5.96% 30-year first mortgage bonds at Treasuries plus 220 bps.

The utility, based in Juno Beach, Fla., is using the proceeds to add to FPL's general funds to repay short-term borrowings.

J.P. Morgan Securities, RBS Greenwich Capital, BNY Mellon Capital Markets, Calyon Securities and Mitsubishi UFJ Securities were bookrunners.

U.S. Bancorp gives FDIC deal terms

U.S. Bancorp gave terms Wednesday for its sale of notes backed by the FDIC that priced Tuesday.

The $750 million of 2.25% three-year notes priced at Treasuries plus 80.75 bps.

Morgan Stanley and Wachovia Capital Markets ran the books.

New issue momentum builds

Momentum from the glut of new issues Tuesday carried over into Wednesday which had nearly as many deals.

Nearly all of Wednesday's issues were from companies rated single-A or above, including more FDIC-backed sales.

"It was all high-quality names today," a syndicate source said. "Not sure why. I guess they were the ones who needed to get debt done."

The calendar is thinning after three days of somewhat heavy issuance.

"People saw a window and jumped in," a market source said. "Nothing bad happened today, so it was a 'go' day."

Another source had commented after Tuesday's market close that although Wednesday looked good for deals getting done, companies would have to wait until the morning to make the call on whether to go ahead.

"Things weren't too bad this morning," he said Wednesday. "Tone was OK."

Florida Power & Light holds steady

Florida Power & Light's new $500 million issue of 5.96% bonds due 2039, which had priced at a spread over comparable Treasuries of 220 bps, was seen straddling that issue price at 220 bps bid, 217 bps offered.

Disney bonds hover around issue

When the new Disney 5.90% notes due 2019 were freed for secondary dealings, a trader saw the bonds at 260 bps bid, 252 bps offered, in slightly from the $500 million issue's estimated pricing level of some 262.5 bps.

Financials back off early gain

Among established financial issues, a trader said that "we were strong early on," in line with early gains in share prices on anticipation of more clarity from the government on how it's going to stabilize the battered financial industry, although that faded a little after Treasury chief Tim Geithner said that the plans will encourage the purchase of toxic assets from the banks, but did not offer much in the way of specifics. The sector rebounded a little later on positive statements by J.P. Morgan Chase & Co. CEO Jamie Dimon about his company's outlook.

The trader said that benchmark issues from JP Morgan, Bank of America and Citigroup Inc. led the early rise. "They all improved," though adding that "we gave back a little at the end of the day."

He saw B of A's benchmark 5.65% notes due 2018 trading as tight as 545 bps over at one point, although they then widened a bit to 555 bps.

Recently beleaguered GE Capital "improved throughout the day, and again, gave some back at the end of the day."

Overall, he said "everything is better from where we closed [Tuesday] night - but it's not as high as it was, we gave some back. We're not substantially better, but slightly better."

American Express hangs in

He did not see any particular movement in American Express Inc.'s bonds after Goldman Sachs & Co. downgraded the credit card giant's shares to a "sell," causing those shares to retreat. The bonds "are pretty wide as it is," he said. "I only saw two issues out there trading - not a lot of paper. So no, there was nothing substantial there."

Financial CDS tighten

A trader who watches the credit-default swaps market saw debt-protection cost for big-bank paper tighten, with B of A's CDS cost in by 230 bps at 295 bps bid, 310 bps offered, and Citi's cost 15 bps tighter at 545 bps bid, 565 bps offered.

Investment-bank paper CDS were 20 bps tighter "across the board."

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