Dover, Ryder System sell as investors grab high-grade bonds; Coca-Cola, Noble firm in trading

By Andrea Heisinger and Cristal Cody

New York, Feb. 16 - Dover Corp. and Ryder System, Inc. each priced bonds in an uneventful primary on Wednesday.

Sources had originally thought the market would be empty for the day, but the two sales were announced right off the bat in the morning.

Dover was the large deal with an upsized $800 million in tranches due 2021 and 2041. The size was increased from $600 million, a source said.

Transportation and logistics company Ryder sold $350 million of four-year notes. The notes received considerable interest from accounts, a source said, declining to say how much. He also noted that the notes "no doubt" priced at the tight end of price guidance that was at least initially in the 135 basis points area.

A source away from the trade observed that "everyone wants high-grade [paper], but there's not a lot pricing."

The Federal Reserve meeting and subsequent announcement on the economic forecast didn't really seem to sway anyone on whether to jump in to the market or not, a source said.

"We're just low on supply," a syndicate source said. "I think yesterday no one knew if anything was coming out, and [I was] surprised to see two deals."

Thursday and Friday could be quiet, with desks reporting they're out of deals for the week.

"I would imagine someone has something [to price], but we'll have to wait until the open to see what," the syndicate source said.

No secondary market activity was seen on the reopening of Deutsche Bank AG's 3.25% notes due 2016, but bank and financial bonds traded about "2 to 5 better," a trader said.

Trading was "pretty slow to start," a source said. "There was a little bit of flurry in the afternoon, but it was a relatively slow day."

Coca-Cola Enterprises, Inc.'s new notes due 2021 traded about 4 bps tighter on Wednesday, a trader said.

Noble Energy, Inc.'s bonds due 2041 were stronger, along with oil and gas bonds, traders said. The oil and gas sector came in 2 bps to 3 bps.

The Markit CDX Series 14 North American investment-grade index was flat on Wednesday at a spread of 81 bps, according to Markit Group Ltd.

Overall investment-grade Trace volume rose 10% to more than $15 billion, a source said.

Treasuries ended the day slightly lower on a new round of economic data. The 10-year note yield rose 2 bps to 3.62%. The 30-year bond yield rose 2 bps to 4.68%.

Dover upsizes to $800 million

Dover priced an upsized $800 million of senior notes (A2/A) in two parts, according to a market source close to the sale.

The deal was upsized from $600 million.

The $450 million of 4.3% 10-year notes priced at a spread of Treasuries plus 68 bps.

A second part was $350 million of 5.375% 30-year bonds that sold at a spread of Treasuries plus 78 bps.

The active bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities LLC.

Proceeds are being used to repay commercial paper and for other general corporate purposes.

In the gray markets, a trader saw a 70 bps bid on the notes due 2021.

The manufacturer of industrial, engineering, fluid management and electronic technical components and equipment is based in Downers Grove, Ill.

Ryder's medium-term notes

Ryder System sold $350 million of 3.15% medium-term notes due 2015 (Baa1/BBB-/A-) by late afternoon to yield Treasuries plus 125 bps, said a source who worked on the sale.

"It was pretty cut and dried," the source said. "The size didn't change, and I think the spread was pretty consistent [with price talk]."

Bank of America Merrill Lynch, BNP Paribas Securities Corp., RBC Capital Markets and Mizuho Securities USA Inc. were the bookrunners.

The transportation and logistics company is based in Miami.

Coca-Cola firms

Coca-Cola Enterprises' $300 million of 4.5% 10-year senior notes (A3/BBB/BBB+) were tighter in the secondary market on Wednesday, a trader said.

The notes were priced at a spread of Treasuries plus 93 bps.

"Last I saw was 89, 87," the trader said.

The marketer, distributor and producer of Coca-Cola products is based in Atlanta.

Noble tighter

Also stronger on the day, Noble Energy's long bonds firmed in trading, a source said.

The company on Tuesday sold an upsized $850 million of 6% 30-year senior bonds (Baa2/BBB) at a spread of 137.5 bps over Treasuries. The bonds were seen at 132 bps bid, 130 bps offered Wednesday afternoon.

The crude oil and natural gas exploration and production company is based in Houston.

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