Air Products in market, Ruby Pipeline plans $1.08 billion; MF Global bonds drop

By Cristal Cody and Sheri Kasprzak

New York, Oct. 31 - Air Products & Chemicals, Inc. was in the market with its $400 million offering of notes, the only pricing action in a rather light session to kick off the week.

The company sold 3% notes (A2/A) due Nov. 3, 2021 at 99.94 to yield 3.007%. The notes priced at a spread of Treasuries plus 82 bps.

The joint bookrunners were BNP Paribas Securities Corp. and RBS Securities Inc.

Proceeds will be used to for general corporate purposes, including the repayment of debt, investments in or extensions of credit to the company's subsidiaries, the redemption of common stock or preferred stock and the financing of possible acquisitions or business expansion.

Based in Allentown, Pa., Air Products and Chemicals produces gases and chemicals for industrial use.

Ruby Pipeline preps note deal

Coming up later in the week, Ruby Pipeline LLC plans to offer $1.075 million of senior unsecured notes, said a calendar of upcoming offerings.

The notes (Baa3/BBB-/BBB-) will be sold through Barclays Capital Inc., RBS Securities Corp. and RBC Capital Markets LLC.

The exact pricing date was not immediately available Monday, but pricing was expected during the week.

Proceeds, along with a separate interim loan facility, will be used to refinance a project finance loan.

Ruby Pipeline, based in Houston, is a subsidiary of El Paso Corp. and Global Infrastructure Partners LLC. It is a 680-mile natural gas pipeline that stretches from Wyoming to Oregon.

Secondary weaker

Bonds overall traded wider on the day across financial, telecom and other sectors, sources said.

The Markit CDX Series 17 North American high-grade index eased 7 basis points to a spread of 121 bps on Monday.

In the secondary market, MF Global Holdings Ltd.'s 6.25% bonds tanked on news it had filed for bankruptcy protection.

Bank and financial paper traded 25 basis points to 40 bps wider on the day.

Bank of America Corp.'s 10-year debt widened 40 bps, while Goldman Sachs Group Inc.'s notes traded 30 bps wider.

"Definitely not a pretty day," a trader said.

Verizon Communications Inc.'s new bonds were seen about 5 bps weaker, with other bonds in the telecom sector trading about 2 bps to 7 bps wider overall, a trader said.

Overall trading volume stayed below $10 billion on Monday.

Treasuries ended the day in positive territory. The 10-year note yield fell to 2.11% from 2.32%. The 30-year bond yield dropped to 3.13% from 3.37%.

MF Global drops

MF Global's 6.25% notes due 2016, which it sold in August at par, wrapped up a startling week of bad news for the company by dropping to 47 bid, 50 offered by Monday afternoon, a trader said. The company filed for Chapter 11 during the session.

"Very active," the trader said. "Initially, it traded down a bit, then started coming back off lows. Now it seems like it's well bid."

MF Global sold $325 million of the five-year notes (Baa2/BBB-) on Aug. 3 at par to yield 6.25%. The bonds had been rated investment grade less than a week ago.

The commodity and derivative broker is based in New York City.

Bank of America widens

Bank of America's 5% notes due 2021 traded Monday afternoon at 400 bps bid, 385 bps offered, about 40 bps wider, a trader said.

The financial services company is based in Charlotte, N.C.

Goldman down

Goldman's 5.25% senior notes due 2021 widened 30 bps to 305 bps bid, 295 bps offered, a trader said.

Goldman reopened the notes on Oct. 25 in a $1 billion offering priced a spread of 295 bps over Treasuries.

The financial services company is based in New York City.

Verizon weaker

Verizon's new bonds were seen about 5 bps weaker across the curve.

The company's 4.75% 30-year bonds traded 5 bps wider at 143 bps bid, 138 bps offered going out, the trader said.

Verizon sold $750 million of the 30-year bonds at Treasuries plus 137.5 bps on Thursday.

The broadband and telecommunications company is based in New York City.

CDS costs rise

Bank and brokerage credit default swaps costs rose on Monday, indicating lessened investor confidence in the financial sector, a trader said.

Both bank and broker/investment bank CDS costs were higher anywhere between 18 bps and 30 bps.

Goldman Sachs' CDS costs traded 18 bps higher, while Merrill Lynch's CDS costs rose 30 bps.

Paul Deckelman contributed to this review

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