Equity One, Sweden, NY Life sell; Block Financial in market; Goldman, Citi bonds widen

By Aleesia Forni and Andrea Heisinger

New York, Oct. 22 - A mix of corporate and Yankee issuers tapped the high-grade bond market on Monday, including Equity One, Inc. and the Kingdom of Sweden.

Block Financial LLC announced a $500 million sale of 10-year notes in its first bond offering since 2008. It was unclear at press time if the notes had priced or were going overnight to be Tuesday's business.

Sweden priced $1 billion of three-year notes in line with guidance.

There was a $300 million sale of 10-year senior notes by real estate investment trust Equity One. The size was increased from $275 million.

New York Life Global Funding sold $300 million of five-year bonds under Rule 144A and Regulation S.

Norway's Kommunalbanken AS announced a $300 million offering of floating-rate notes due 2016 to be priced on Tuesday.

Citigroup Inc. announced a sale of fixed-to-floating-rate noncumulative preferred stock.

The week is expected to garner about $15 billion in volume, but that is dependent on whether there are any trades from financials like Goldman Sachs Group Inc. or Bank of America Corp., which have recently reported earnings.

"We could have more if any financials decide to come in," a market source said. "It will push the total up, like how last week we had JPMorgan and Morgan Stanley [pricing bonds]."

The Markit CDX Series 18 North American Investment Grade index widened 1 basis point to a spread of 94 bps on Monday.

In the secondary market, bank paper from Goldman Sachs, Citigroup and Bank of America was 7 bps to 12 bps wider.

Investment-grade bank and brokerage credit default swaps costs rose on the day.

Banks were wider. Bank of America's CDS costs widened 2 bps to 147 bps bid, 153 bps offered. Citi's CDS costs were also 2 bps wider at 147 bps bid, 153 bps offered. J.P. Morgan's CDS costs rose 1 basis point to 109 bps bid, 114 bps offered. Wells Fargo's CDS costs were 1 basis point wider at 81 bps bid, 86 bps offered.

Brokers also were wider. Merrill Lynch's CDS costs widened 2 bps to 142 bps bid, 157 bps offered. Morgan Stanley's CDS costs rose 4 bps to 210 bps bid, 215 bps offered. Goldman Sachs' CDS costs widened 2 bps to 176 bps bid, 181 bps offered.

Equity One upsizes

Equity One sold an upsized $300 million of 3¾% 10-year notes at a spread of Treasuries plus 200 bps, an informed source said.

The notes (Baa3/BBB-/) were sold in line with talk in the 200 bps over Treasuries area. The deal size was increased from $275 million with about $630 million on the books.

Bookrunners were Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC.

Proceeds are being used to redeem $250 million of 6¼% senior notes due 2014, including a make-whole premium, to reduce an outstanding balance under an unsecured revolving credit facility and for general corporate purposes.

Equity One was last in the bond market with a $250 million sale of 6¼% five-year notes priced at 437.5 basis points over Treasuries on Dec. 2, 2009.

The real estate investment trust for shopping centers is based in North Miami Beach, Fla.

NY Life sells $300 million

New York Life Global Funding tapped the market for $300 million of five-year notes (Aaa/AA+/) sold under Rule 144A and Regulation S, a source away from the trade said.

The notes were priced at a spread of Treasuries plus 55 bps. This was wider than talk in the 45 bps to 49 bps range.

Full terms were not available at press time.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and UBS Securities LLC were bookrunners.

The unit of mutual insurance company New York Life Insurance Co. is based in New York.

Block Financial's 10-years

Block Financial is expected to price a $500 million offering of 10-year senior notes, a source away from the trade said late on Monday.

The notes (Baa2/BBB/BBB) were talked in the Treasuries plus 375 basis points area early in the day, and the source said after the close that the notes had launched at the same level. It was unclear if the sale was pricing late on Monday or early on Tuesday morning, the source added.

"They said pricing was either Monday or Tuesday. I haven't seen pricing details yet," the source said.

J.P. Morgan Securities LLC is active bookrunner.

Proceeds are being used to repurchase, tender, redeem or repay 7.875% senior notes due 2013 and for general corporate purposes.

The sale is guaranteed by H&R Block, Inc.

Block Financial was last in the bond market with a $600 million sale of 7 7/8% five-year notes priced at 481.9 bps over Treasuries on Jan. 9, 2008.

The tax preparation and financial services company is based in Kansas City, Mo.

Sweden prices $1 billion

Sweden priced a $1 billion offering of 0.375% three-year notes at a spread of mid-swaps minus 7 bps, an informed source told Prospect News.

A syndicate source said there was about $1.5 billion on the books for the sale.

The notes (Aaa/AAA/) were sold in line with guidance in the mid-swaps minus 7 bps area.

The deal was done under Rule 144A and Regulation S.

Barclays, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were bookrunners.

Kommunalbanken floaters

Norway's Kommunalbanken is planning a $300 million sale of floating-rate notes due 2016, a market source said.

The notes (Aaa/AAA/) are being talked in the Libor plus 13 bps area. Pricing is expected on Tuesday.

BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are bookrunners.

The bank provides low-cost funding to municipalities and is based in Oslo.

Citigroup's preferreds

Citigroup announced a sale of series A fixed-to-floating rate noncumulative preferred stock, according to a prospectus filed with the Securities and Exchange Commission.

Price talk on the $1,000-par securities was 6.37% to 6.5%, a trader said.

Dividends will be fixed through January 2023, at which time the rate will adjust to Libor plus an as-of-yet undetermined spread. During the period in which the rate is fixed, the dividends will be paid semiannually in January and July. Once the rate goes to floating, dividends will be paid quarterly in January, April, July and October.

Citi will not list the preferreds on any exchange.

Citigroup Global Markets Inc. is bookrunner.

Proceeds will be used for general corporate purposes.

Citigroup is a New York-based bank.

Bank of America wider

The secondary saw Bank of America's 7 5/8% notes due 2019 widen 10 bps to 137 bps bid.

The bank priced $2.5 billion of the notes on May 8, 2009 at 410 bps over Treasuries.

Goldman 2018 notes

Meanwhile, Goldman Sachs' bond due 2018 widened 12 bps to 193 bps bid on Monday.

The bank priced $1.5 billion 6.15% 10-year bonds in April 2008 at Treasuries plus 237.5 bps.

Citi widens

In other trading, Citigroup's 6.375% notes due 2014 widened 7 bps from Friday's levels to 102 bps bid.

The notes sold at a spread of Treasuries plus 380 bps on Aug. 5, 2009.

Stephanie N. Rotondo contributed to this review

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