Financials Credit Suisse, Nordea Bank, Sallie Mae rule primary; O'Reilly firms, RBS widens

By Andrea Heisinger and Cristal Cody

New York, Jan. 11 - Credit Suisse AG, Nordea Bank AB, O'Reilly Automotive, Inc. and SLM Corp. (Sallie Mae) all tapped the high-grade market on a Tuesday that was focused on the financial sector in the primary.

Credit Suisse priced a slightly upsized $2.05 billion of notes in two tranches with fixed- and floating-rate coupons. The size was increased from $2 billion.

Another financial name in the market was Sweden's Nordea Bank with its $2.75 billion of notes in three tranches. This was the largest sale of the day, and it was done under Rule 144A.

In the non-financial sector there was the $500 million deal from O'Reilly Automotive. It was the inaugural sale for the auto parts retailer, a source said. The size of the deal was set from the beginning with a do-not-grow provision, he said.

A late-day sale came from Sallie Mae. The company sold $2 billion of split-rated five-year notes.

An upcoming sale is expected from Nomura Holdings, Inc. The Tokyo-based financial is planning to sell five-year notes.

First Potomac Realty Trust announced and is expected to price a deal of perpetual preferred shares on Wednesday, a source said.

The market was "solid" for the day, a source said. For Wednesday, "I'm not sure we'll have more or less [than Tuesday]," the source said.

Overall investment-grade Trace volume jumped 55% to nearly $16 billion on Tuesday, a market source reported.

Corporate bonds were mixed in secondary trading on Tuesday, a source said.

"We're off a little bit from the tights in the morning but nothing dramatic," the source said. "It was a mixed tone."

Technology bonds widened, a trader said.

"Microsoft [Corp.], Dell [Inc.], they're out a couple basis points," the trader said.

The new deals sold on Tuesday firmed in the secondary market, according to sources.

O'Reilly Automotive's new 10-year notes firmed 10 basis points in trading, while Credit Suisse's new three-year notes traded about 3 bps tighter on the bid side.

Senior Housing Properties Trust's new 4.3% senior notes sold the previous day tightened 7 bps on the bid side in secondary trading, a source said Tuesday.

In the bank sector, Royal Bank of Scotland plc's 10-year senior notes sold the previous week have moved out 20 bps, a source said.

The Markit CDX Series 14 North American investment-grade index firmed 3 bps to a spread of 86 bps, Markit Group Ltd. said.

Treasuries fell, sending the 10-year benchmark note yield up 6 bps to 3.34%. The 30-year bond yield rose to 4.49% from 4.46%.

Credit Suisse's $2.05 billion

Credit Suisse priced $2.05 billion of senior notes (Aa1/A+/AA-) in two parts, a source away from the offering said.

The size of the sale had initially been $2 billion, with the tranche of floaters increased on demand, the source said later.

The $800 million of three-year floating-rate notes priced at par to yield Libor plus 96 bps. The tranche size had been $750 million.

A tranche of $1.25 billion 2.2% three-year notes priced at a spread of Treasuries plus 128 bps.

Credit Suisse Securities was the bookrunner.

The proceeds are being used for general corporate purposes, including refinancing of debt outside of Switzerland.

In the secondary market, the notes due 2014 were "wrapped around 125, 123," a source said.

The financial services company is based in Zurich.

O'Reilly prices 10-years

O'Reilly Automotive priced $500 million of 4.875% 10-year senior notes (Baa3/BBB-) to yield Treasuries plus 162.5 bps, according to an FWP filing with the Securities and Exchange Commission.

Whispered price talk was in the 178.5 bps area and then was revised to official talk in the 175 bps area. The deal came in tighter than that.

"Demand came together nicely," a source who worked on the deal said, adding that it was the company's first bond sale.

Barclays Capital Inc. and Bank of America Merrill Lynch ran the books.

Proceeds are being used to repay outstanding debt under an existing asset-based revolving credit facility, to pay fees and expenses related to the offering and for general corporate purposes.

The deal is guaranteed by subsidiaries O'Reilly Automotive Stores, Inc., Ozark Automotive Distributors, Inc., Greene County Realty Co., O'Reilly II Aviation, Inc., Ozark Services, Inc., Ozark Purchasing, LLC, CSK Auto Corp., CSK Auto, Inc., CSKAuto.com, Inc. and OC Holding Co., LLC.

The notes firmed in the secondary market, trading at 154 bps bid, 152 bps offered, according to a trader.

"They came 10 basis points tighter on the break," the trader said.

The auto parts retailer is based in Springfield, Mo.

Nordea Bank prices

Nordea Bank sold $2.75 billion of notes (Aa2/AA-/AA-) in three tranches, an informed source said.

A $750 million tranche of 2.125% three-year notes priced at a spread of Treasuries plus 120 bps. The notes came in at the tight end of price guidance in the 125 bps area.

The second tranche was $1 billion of three-year floating-rate notes priced at par to yield Libor plus 90 bps.

A final tranche of $1 billion 4.875% 10-year notes priced at Treasuries plus 160 bps. These notes also priced at the tight end of guidance in the 162.5 bps area.

There was about $5 billion total on the books for the sale, the source said. Of that, $2.5 billion was split evenly between the two three-year tranches and $2.5 billion was in the 10-year notes.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the bookrunners.

The deal was done under Rule 144A.

The financial services company is based in Stockholm.

Sallie Mae's split-rated deal

Education financing company Sallie Mae priced $2 billion of 6.25% five-year notes to yield 6.5%, a market source said late in the day.

The notes (Ba1/BBB-/BBB-) priced to yield Treasuries plus 453.8 bps.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and JPMorgan were the bookrunners.

The issuer is based in Reston, Va.

Nomura to sell five-years

Nomura Holdings announced a sale of five-year notes (Baa2/BBB+), a market source away from the sale said.

The source had not seen the deal price by late in the day.

Nomura Securities is the bookrunner.

The financial holding company is based in Tokyo.

First Potomac plans preferreds

First Potomac Realty Trust announced an offering of series A cumulative perpetual preferred shares to be priced at $25.

There has been no size announced.

Wells Fargo Securities LLC is managing the books for the sale, according to a 424B5 filing with the SEC.

Proceeds will be contributed to the company's operating partnership in exchange for preferred partnership units. The operative partnership will use the proceeds to repay a portion of its outstanding revolver, to fund the acquisition of properties, for working capital and for general corporate purposes.

The real estate investment trust for industrial properties in the Washington, D.C., area is based in Bethesda, Md.

Senior Housing notes firm

Senior Housing Properties Trust sold $250 million of 4.3% senior notes (Baa3/BBB-) at a spread of Treasuries plus 262.5 bps on Monday.

The notes firmed to 255 bps bid, 245 bps offered in the secondary market on Tuesday, a trader said.

The REIT for senior living properties is based in Newton, Mass.

RBS wider

Royal Bank of Scotland's senior notes (Aa3/A+/AA-) sold on Jan. 4 have continued to widen in trading, a source said.

RBS sold $2 billion of notes in two tranches that included 3.25% notes due 2014 at Treasuries plus 235 bps and 6.125% notes due 2021 at a 285 bps spread.

The 10-year notes were seen closing Tuesday at 305 bps bid, 300 bps offered.

"They're about 20 wider from the break," a trader said.

The financial services company is based in Edinburgh.

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