Bank of America, Comcast do large trades; Ford prices again; Bank of America notes tighten

By Aleesia Forni and Andrea Heisinger

New York, Jan. 8 – Issuance in the high-grade bond market was scaled back slightly on Tuesday from the previous day's volume, but still saw large multi-tranche sales from Bank of America Corp. and Comcast Corp.

Bank of America priced $6 billion of notes in three maturities on the same day it was announced it would sell servicing rights on some of its mortgages. The banking giant was also in the news over a $10.3 billion settlement with government-sponsored mortgage lender Fannie Mae over some home loans sold by Bank of America.

There was a $2.95 billion sale of bonds in three maturities by Comcast, all of which sold at the tight end of talk.

Ford Motor Credit Co. LLC priced $1.25 billion of five-year split-rated notes.

Natural gas company Atmos Energy Corp. sold $500 million of 30-year senior notes.

Connecticut Light and Power Co. was in the market with a $400 million trade of 10-year mortgage bonds.

London-based Standard Chartered Bank sold $2.5 billion of notes in two tranches via Rule 144A and Regulation S. A 30-year bond was added to the sale in addition to the original 10-year tranche. Terms of the trade were not available at press time.

Norway's Kommunalbanken announced a private trade of five-year notes.

European Investment Bank priced $5 billion of five-year global notes in mid-morning.

A sale of five-year notes from Germany's DVB Bank SE was pulled on Tuesday after a lack of investor interest, a source said.

In the secondary market, Bank of America's new notes were trading better near the end of the session, a market source said.

The five-year notes firmed 3 basis points while the 10-year notes were quoted 4 bps tighter.

In recent deals, Monday's new issues from Toyota Motor Credit Corp. and Staples Inc. were seen tighter in trading on Tuesday.

Both tranches from Toyota's $1.5 billion sale were 2 basis points better, while Staples' new deal firmed 10 bps.

Supply is expected to remain strong for the next two months prior to Congressional wrangling over the debt ceiling, a source said late Tuesday.

"I would think we'll have mostly $15 billion or more [a week] for this month," he said.

The issuer focus could shift from the current crop of Yankee issuers and financials, which are trying to get bonds priced while conditions are optimal and before earnings blackouts.

"Everyone knows some headlines are going to pop up and so they're just going now," a syndicate source said.

Comcast prices tight

Comcast was in the market with a $2.95 billion sale of notes (Baa1/BBB+/BBB+) in three tranches, an informed source said.

A $750 million tranche of 2.85% 10-year notes priced at a spread of Treasuries plus 100 bps. The tranche was talked in the Treasuries plus 100 bps to 105 bps range.

There was $1.7 billion of 4.25% 20-year notes sold at a spread of 125 bps over Treasuries. Price guidance was in the 125 bps to 130 bps range.

Finally, a $500 million tranche of 4.5% 30-year bonds sold at Treasuries plus 145 bps. There was talk in the 140 bps to 145 bps range.

Active bookrunners were Barclays, Goldman Sachs & Co. and RBS Securities Inc.

Comcast was last in the market with a $2.25 billion sale of notes in two tranches on June 26, 2012. The offering included 3.125% 10-year note priced at Treasuries plus 150 basis points and 4.65% 30-year bonds sold at Treasuries plus 195 bps.

The telecommunications company is based in Philadelphia.

BofA's $6 billion deal

Bank of America was in the market with a $6 billion sale of notes (Baa2/A-/A) in three maturities, a market source told Prospect News.

There was a $1 billion tranche of three-year notes sold at a spread of Treasuries plus 95 bps.

A $2 billion tranche of five-year notes priced at125 bps over Treasuries.

The third part was $3 billion of 10-year notes priced at a spread of Treasuries plus 150 bps.

Full terms of the trade were not available at press time.

Bank of America's three-year notes were quoted at 88 bps offered, a market source said late in the afternoon.

The five-year notes were trading at 122 bps bid, and the source saw the 10-year notes at 146 bps bid, 143 bps offered late in the session.

Bank of America Merrill Lynch was bookrunner.

The financial services company is based in Charlotte, N.C. and was last in the bond market with a $1.5 billion sale of 1.5% three-year notes priced at Treasuries plus 120 basis points on Oct. 4, 2012.

Ford does crossover trade

Ford Motor Credit sold $1.25 billion of 2.375% five-year notes (Baa3/BB+/BBB-) to yield Treasuries plus 168 bps, a market source said.

The source said pricing was at the low end of guidance in the 170 bps area.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc. were bookrunners.

Proceeds are being added to general funds and will be available for purchase of receivables, for loans and for use in connection with debt retirement.

The financing arm of automaker Ford Motor Co. is based in Dearborn, Mich.

Atmos upsizes

Atmos Energy has priced an upsized $500 million of 4.15% 30-year senior notes (Baa1/BBB+/A-) at a spread of Treasuries plus 110 bps, a market source said.

The size of the trade was increased from $350 million, the source said.

J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA) Inc. and U.S. Bancorp Investments Inc. were active bookrunners.

Proceeds are being used to repay $260 million of short-term financing of a facility that expires on Feb. 1, 2013, with any remainder used for general corporate purposes, including repayment of working capital borrowings pursuant to a commercial paper program.

Atmos was last in the U.S. bond market with a $400 million sale of 5.5% 30-year bonds priced at Treasuries plus 125 basis points on June 7, 2011.

The natural gas transportation and storage is based in Dallas.

Connecticut Light's 10-years

Connecticut Light and Power priced $400 million of 2.5% 10-year first and refunding mortgage bonds, 2013 series A, (A3/A-/A) at Treasuries plus 70 bps, according to an FWP with the Securities and Exchange Commission.

Active bookrunners were Barclays, Bank of America Merrill Lynch and RBS Securities Inc. Proceeds are being used to refinance short-term debt.

The electric subsidiary of Northeast Utilities is based in Berlin, Conn.

DVB pulls trade

DVB Bank announced a sale of five-year notes on Monday and, by Tuesday, pulled the sale, which was supposed to be $500 million in size, a market source said.

The notes (/A+/A+) were being sold by syndicates Citigroup Global Markets Inc., J.P. Morgan Securities LLC and UBS Securities LLC.

The source said that the notes were being talked in the Treasuries plus 250 basis points area, adding that this level was "maybe too much for investors - too much risk."

The sale was being done under Rule 144A and Regulation S.

DVB is a transportation financing company based in Frankfurt, Germany.

EIB sells global

European Investment Bank sold $5 billion of 1% five-year global notes (Aaa/AAA/AAA) at a spread of mid-swaps plus 18 bps, or Treasuries plus 32.5 bps, an informed source said.

Bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The funding arm of the European Union is based in Kirchberg, Luxembourg.

Kommunalbanken's five-years

Kommunalbanken Norway announced a sale of five-year notes (Aaa/AAA/AAA), a source away from the trade said.

The sale is being done under Rule 144A and Regulation S.

Bookrunners are BNP Paribas Securities Corp., Daiwa Securities America Inc., J.P. Morgan Securities LLC and RBC Capital Markets LLC.

Kommunalbanken provides funding to municipalities and is based in Oslo.

Toyota notes firm

Toyota Motor Credit's $800 million of 1.375% five-year notes were quoted 2 bps better at 58 bps bid, 53 bps offered.

The notes sold at a spread of Treasuries plus 60 bps on Monday.

The $700 million tranche of 2.625% 10-year notes traded at 78 bps bid, 73 bps offered on Tuesday after pricing at 80 bps over Treasuries.

The funding arm of Toyota is based in Torrance, Calif.

Staples tightens

In other trading, Staples' $500 million tranche of 2.75% five-year notes was seen at 190 bps bid, 185 bps offered following its pricing at a spread of Treasuries plus 200 bps on Monday.

Meanwhile, the company's $500 million tranche of 4.375% 10-year notes was 10 bps tighter at 240 bps bid, 235 bps offered.

The notes priced at a spread of 250 bps over Treasuries.

The office supply chain store is based in Framingham, Mass.

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