Japan Finance, Swedish Export Credit, Scottrade price; new bonds firm; NBC Universal widens

By Andrea Heisinger and Cristal Cody

New York, July 6 - Sovereign names invaded the high-grade bond market on Wednesday including Japan Finance Corp., which priced $2 billion of five-year notes that are guaranteed by Japan. The sale was announced on Tuesday and went overnight to allow investors in Asia and Europe in.

There was also a $1 billion sale of five-year notes from Swedish Export Credit Corp.

Corporate sales weren't completely absent. Scottrade Financial Services, Inc. priced an upsized $375 million of 10-year senior notes under Rule 144A. The size was increased from $300 million.

There was "no particular reason" why there weren't more deals in the market for the day, a syndicate source said. Many corporate sales got done on Tuesday, the source said, and there "just isn't a lot of supply" for the week.

"A lot of people are still out [on vacation]," the source added.

More overseas names could hit the market on Thursday or Friday, the source said, adding that both days are expected to be quiet.

Overall trading volume jumped 45% to more than $12.5 billion as the market digested the new deals from Tuesday.

McCormick & Co., Inc.'s 10-year notes traded 5 basis points tighter in the secondary market on Wednesday, a trader said.

General Dynamics Corp.'s new five- and 10-year notes firmed in trading. Devon Energy Corp.'s bonds also were better.

Teck Resources Ltd.'s bonds ended June about 15 bps better and traded Wednesday at about the same levels, a trader said.

Trading was flat to about 2 bps wider in the cable and media sector, with NBC Universal, Inc.'s notes 3 bps wider. "The cable media space was a mixed bag," a source said.

In other data, the Markit CDX Series 15 North American Investment Grade index eased 1 bp to a spread of 92 bps, according to Markit Group Ltd.

Treasuries closed modestly better. The 10-year note yield fell 1 bp to 3.11%. The 30-year bond yield dropped 1 bp to 4.36%.

Scottrade upsizes

Scottrade Financial Services sold an upsized $375 million of 6.125% 10-year senior notes late in the day at par to yield 6.125%, a market source said.

The deal size was increased from $300 million, a source said. Up to $500 million was initially possible.

"I wasn't surprised they didn't do $500 [million]," a market source said. "It seemed like it took a while to get done, and the price wasn't great."

The notes (Baa3/BBB-) were priced at a spread of Treasuries plus 301.3 bps.

The deal was priced under Rule 144A.

The bookrunners were Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc.

According to Prospect News data, Scottrade hasn't had any outstanding paper since 2007.

The holding company for brokerage subsidiary Scottrade is based in St. Louis.

Japan Finance sells

Japan Finance sold $2 billion of 2.25% five-year notes (Aa2/AA-) to yield Treasuries plus 64.3 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunners were J.P. Morgan Securities LLC, Bank of America Merrill Lynch, BNP Paribas Securities Corp. and Daiwa Capital Markets Europe.

Proceeds will go toward the operation of the Japan Bank for International Cooperation.

The deal is guaranteed by Japan.

The lender to the general public and Japanese businesses is based in Tokyo.

SEK sells $1 billion

Swedish Export Credit sold $1 billion of 2.125% five-year notes (Aaa/AAA/AAA) to yield Treasuries plus 60 bps, according to an FWP filing with the SEC.

Bank of America Merrill Lynch, Barclays Capital Inc. and Morgan Stanley & Co. Inc. were the bookrunners.

The lender to Sweden's export industry is based in Stockholm.

McCormick 5 bps tighter

McCormick's new 3.9% notes due 2021 firmed to 75 bps bid, 70 bps offered in trading on Wednesday, a trader said.

The company sold $250 million of the 10-year notes (A2/A-) on Tuesday to yield Treasuries plus 80 bps.

The spice and flavoring company is based in Sparks, Md.

General Dynamics firms

General Dynamics' bonds were seen closing the day tighter, a trader said Wednesday.

The company priced $1.5 billion of bonds (A2/A/A) in three tranches the previous day. The tranche of 2.25% five-year notes priced at 60 bps over Treasuries and firmed to 57 bps bid, 55 bps offered in trading on Wednesday.

The tranche of 3.875% 10-year notes firmed to 76 bps bid, 73 bps offered, tighter than the issue spread of Treasuries plus 78 bps.

The aerospace and defense company is based in Falls Church, Va.

Devon Energy better

Devon Energy sold $2.25 billion of senior notes (Baa1/BBB+/BBB+) in three tranches on Tuesday, and all three parts traded tighter in next-day trading, according to a trader.

The $500 million offering of 2.4% notes due 2016 firmed to 73 bps bid, 71 bps offered. The notes were priced at a spread of 77 bps over Treasuries.

A $500 million tranche of 4% notes due 2021 sold at Treasuries plus 97 bps and firmed to 95 bps bid, 92 bps offered.

The $1.25 billion of long-dated bonds also tightened in trading. The 5.6% bonds due 2041 firmed to 95 bps bid, 92 bps offered. The 30-year bonds priced at a spread of Treasuries plus 127 bps.

The natural gas and oil exploration and development company is based in Oklahoma City.

Teck tightens

Teck Resources' new bonds sold on June 29 stayed tight in trading a week after issuance, a trader said on Wednesday.

The company sold $2 billion of senior notes (Baa2/BBB/BBB) in three maturities.

A $300 million tranche of 3.15% notes due 2017 firmed to 140 bps bid, 135 bps offered. The notes priced at a spread of Treasuries plus 150 bps.

Also in trading, Teck's offering of $700 million of 4.75% notes due 2022 traded on Wednesday at 158 bps bid, 153 bps offered, firmer than the 165 bps spread it priced at a week earlier.

The final tranche of $1 billion of 6.25% bonds due 2041 priced a spread of Treasuries plus 190 bps and narrowed 10 bps to 180 bps bid, 175 bps offered.

The diversified resource company for mining and mineral development is based in Vancouver, B.C.

NBC Universal wider

NBC Universal's 4.375% notes due 2021 widened 3 bps to 133 bps bid, 125 bps offered on Wednesday, a trader said. The notes remain stronger than fall's issue price. The 10-year notes (Baa2/BBB+) priced on Sept. 28, 2010 at Treasuries plus 185 bps.

The broadcasting and entertainment company is based in New York.

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