Total Capital, Developers Diversified, Unum sell bonds; new bonds trade mixed; financials dip

By Andrea Heisinger

New York, Sept. 25 - Total Capital SA was the only straight investment-grade bond issue on Friday, with two other offerings coming as split-rated deals.

Those deals came from Developers Diversified Realty Corp. and Unum Group.

French oil company Total sold $1 billion of six-year notes early in the day at a low spread.

Unum Group priced its upsized $350 million of seven-year notes soon after. The sale was done off the high-grade syndicate desk.

Developers Diversified was the last to price for the day. The real estate investment trust sold $300 million of 9.625% bonds due 2016 off of the high-grade syndicate desk.

The coming week should remain busy, sources said, although they disagreed whether it would compete with the volume from the past week.

New and recently priced bonds were mixed in trading by late in the day, traders said.

On the non-financial side, the Total Capital bond was quoted about 5 basis points better.

Recent deals from Holcim US Finance and Holcim Capital Corp. and Enterprise Products Operating LLC were some of the best-performing. The two from Holcim were tighter by 30 to 40 bps, while two notes from Enterprise Products were 10 bps better.

Viacom Inc. did not fare as well, with one tranche widening and the other mostly unchanged from where it priced.

In the financial sector, the new five-year from Wells Fargo & Co. was quoted as unchanged to wider by a trader due to market weakness.

Spreads were mixed by late afternoon, as were Treasury yields, although most of the longer bonds were unchanged to wider. The five-year note was unchanged from the previous day at 2.36%. The 30-year bond moved in 8 bps to 4.09%.

Total offers $1 billion

Oil company Total Capital priced $1 billion of 3.125% six-year senior notes early in the day at Treasuries plus 88 bps, an informed source said. The deal is guaranteed by Total SA.

The deal priced inside of guidance that was in the 90 bps area, the source said.

It may be the company's first dollar-denominated bond sale, he said, although he was not absolutely certain.

"They're a very infrequent issuer, otherwise," he said.

Bookrunners were Bank of America Merrill Lynch and Deutsche Bank Securities Inc.

Proceeds will be used for general corporate purposes.

The issuer is a funding arm of the oil company based in Paris.

High volume to continue

One market source said the coming week could have "less volume than we saw this week," while another said it would be "about the same [as the past week]."

It could be even busier, the second market source said, with no Federal Reserve meeting slowing new deal flow in the middle of the week.

"We should see things right away [on Monday]," he said.

Earnings announcement blackouts will start in the next couple of week, but companies still "have a window" in the coming week, he said.

"We definitely have a pipeline. It should be busy."

The source also expressed how relieved he was for the past week to be coming to a close. "It was really busy," he said. "I'm kind of glad it's over."

Unum prices seven-year

Unum Group sold an upsized $350 million of split-rated seven-year notes (Ba1/BBB-/BBB-) at par to yield 7.125%, an informed source said. They priced at a spread of Treasuries plus 416.5 bps.

The deal was done on the high-grade syndicate desk, he said, and was priced at a yield. The size was increased from $250 million.

Goldman Sachs & Co. and Morgan Stanley & Co. Inc. ran the books.

The disability and life insurance company is based in Chattanooga, Tenn.

Developers Diversified upsized

Developers Diversified Realty priced $300 million of 9.625% split-rated senior unsecured notes due 2016 late in the day to yield 9.75%, an informed source said.

The notes (Baa3/BB/BB) priced at a spread of Treasuries plus 741.1 bps.

The sale was played to high-grade accounts, a source said. A source who worked on the deal confirmed this, saying "it was mostly IG on the books. There was a large equity base."

Bank of America Merrill Lynch, Citigroup Global Markets and J.P. Morgan Securities Inc. ran the books.

Proceeds will go to repay debt.

The real estate investment trust is based in Beachwood, Ohio.

Total Capital bond in 5 bps

The new 3.125% bond due 2015 from Total Capital was about 5 bps better once freed for trading, a trader said late in the day. It priced at 88 bps over Treasuries and was quoted at 83 bps bid, with no offer.

Wells Fargo bond widens

The new 3.75% note due 2014 from Wells Fargo was unchanged to wider by mid-afternoon, a trader in the financial sector said.

The bond sold Thursday at 145 bps over Treasuries. It was quoted at 147 bps bid, 145 bps offered.

When asked why it had worsened in the secondary, the trader said it was a "weaker market today."

Holcim bonds highly improved

Two new notes from Holcim US Finance and Holcim Capital were much better a day after pricing, a trader said. Both tightened by 30 to 40 bps.

The 6% note due 2019 was at 250 bps bid, 240 bps offered, in from its price of 280 bps over Treasuries.

The 6.875% bond due 2039 was sold at 290 bps over Treasuries and was quoted at 260 bps bid, 250 bps offered.

Viacom bonds widen, unchanged

The two tranches of bonds priced Thursday by Viacom were mixed in trading by late afternoon, a trader said.

The 5.625% note due 2019 fared the best, quoted at 193 bps offered. It priced at 200 bps over Treasuries.

The 4.25% tranche due 2015 was sold at 195 bps over Treasuries and was quoted at 198 bps bid.

Kroger bond slightly improved

Kroger Co.'s 3.9% bond due 2015 was trading slightly better than its price of 158 bps over Treasuries, a trader said late in the day. He quoted it at 155 bps bid, 145 bps offered.

Enterprise Products notes tighten

Both tranches of bonds from the recently priced deal from Enterprise Products Operating were quoted as about 10 bps improved from their price on Thursday.

A trader said the 5.25% bond due 2020 was at 185 bps bid, 182 bps offered. It priced at 195 bps over Treasuries.

The 6.125% note due 2039 was at 190 bps bid, with no offer. It sold at 200 bps over Treasuries.

Rogers, Barclays, Arrow top trading

An outstanding bond from Rogers Communications was the most popular with investors as of early afternoon. It was followed by two issues done in the past week or two from Barclays Bank plc and Arrow Electronics Inc.

The bond from Rogers was its 6.8% due 2018. Its subsidiary Rogers Wireless, a wireless communications company from Canada, was recently in the news for signing a contract with Primus Communications Canada that will increase its presence in the country.

The Barclays 5% bond due 2016 was sold on Sept. 17 and came in behind the Rogers note in terms of volume. The bank's note did well in trading, tightening nicely from where it priced.

The Arrow Electronics sale was even more recent. The 6% note due 2020 was priced on Wednesday but was mostly unchanged once freed for secondary trading.

Deutsche Bank, ADM top movers

Bonds from Deutsche Bank AG and Archer-Daniels-Midland Co. were among those making the biggest swings from the previous week's spreads by late in the day, a source said.

ADM saw its 8.125% note due 2012 widen more than 25 bps from a week ago. A movie about an executive whistleblower from the company came out a week ago.

Deutsche Bank's 4.875% note due 2013 was about 25 bps better than a week ago. Among its news items in the past week were the bank being fined, along with others, for an initial public offering from Vonage, and for a lawsuit it is involved in with a Saudi Arabian bank.

Bank, broker CDS widen

Both bank and brokerage names saw their credit-default swaps wider by late in the day, a trader said.

Bank names were 3 to 8 bps wider, he said. Brokerages moved similarly at 5 to 8 bps wider.

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