Wrigley brings new five-part deal; Wrigley's longer-dated notes firm 7 bps; bonds improve

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 16 - Another positive session on Wednesday saw WM. Wrigley Jr. Co. print $3 billion of new paper in five parts, as players felt optimistic that a deal to avoid a debt default would be reached.

All five tranches were sold at the tight end of talk.

The company sold $400 million of 1.4% three-year notes at Treasuries plus 80 basis points and $400 million of 2% four-year notes at Treasuries plus 65 bps.

There was also $550 million of 2.4% five-year notes priced at Treasuries plus 105 bps, while a $750 million part of 2.9% six-year notes priced at Treasuries plus 155 bps.

A $900 million tranche of 3.375% seven-year notes sold with a spread of Treasuries plus 135 bps.

Also on Wednesday, JPMorgan Chase & Co. announced plans to tap its existing issue of $750 million of 5.625% subordinated bonds due 2043, according to a 424B2 filing with the Securities and Exchange Commission.

The original issue sold on Aug. 14.

Investor demand has remained solid for the week's new issues, with roughly $6 billion of new paper priced so far.

Sources had expected roughly $10 billion of issuance for the week.

"Strong tone continues, so [I] would expect more new deals tomorrow," one syndicate source said on Wednesday.

Investment-grade bonds tightened as the session headed toward the close on Wednesday and a deal appeared imminent to reopen the government and avoid a debt default, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 3 bps to a spread of 74 bps.

Investment-grade bank and broker paper credit default swaps costs came in over the day, a source said.

In Wednesday's secondary market, Wrigley's mega offering of five tranches of notes traded about 2 bps tighter on the short end and 7 bps better on the six- and seven-year pieces, a trader said.

Wrigley prices tight

Wednesday's primary saw Wrigley sell $3 billion of new bonds (Baa2/BBB/) in five tranches, according to a source close to the trade.

All five tranches were sold at the tight end of talk.

The deal included $400 million of 1.4% three-year notes priced at Treasuries plus 80 bps. Pricing was at 99.889 to yield 1.438%.

There was also $400 million of 2% four-year notes sold with a spread of Treasuries plus 65 bps, or 99.847, to yield 2.04%.

A $550 million issue of 2.4% five-year notes priced at Treasuries plus 105 bps. The notes were sold at 99.813 to yield 2.44%.

The company also sold a $750 million tranche of 2.9% six-year notes with a spread of Treasuries plus 155 bps, or 99.781, to yield 2.94%.

Finally, $900 million of 3.375% seven-year notes priced at 99.901 to yield 3.391%, or Treasuries plus 135 bps.

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

The candy and food products company is based in Chicago.

Wrigley notes trade better

In the secondary market, Wrigley's notes tightened in aftermarket trading, a source said.

The 1.4% notes due 2016 firmed 2 bps to 78 bps bid.

The tranche of 2% notes due 2017 traded tighter at 63 bps bid.

Wrigley's 2.4% notes due 2018 were seen 2 bps better at 103 bps bid.

The 2.9% notes due 2019 traded about 7 bps tighter at 148 bps bid, the source said.

The company's 3.375% notes due 2020 headed out 7 bps better in the secondary market at 128 bps bid.

JPMorgan eyes add-on

JPMorgan is planning to price a tap of its existing $750 million of 5.625% subordinated bonds due Aug. 16, 2043, according to a 424B2 filing with the SEC.

The original issue sold on Aug. 14 with a spread of Treasuries plus 190 bps.

J.P. Morgan Securities LLC is the bookrunner.

Proceeds will be use for general corporate purposes.

The financial services company is based in New York City.

Bank/brokerage CDS costs firm

Investment-grade bank and brokerage CDS costs tightened on Wednesday, according to a market source.

Bank of America Corp.'s CDS costs firmed 6 bps to 95 bps bid, 99 bps offered. Citigroup Inc.'s CDS costs tightened 5 bps to 87 bps bid, 91 bps offered. JPMorgan Chase & Co.'s CDS costs declined 5 bps to 81 bps bid, 85 bps offered. Wells Fargo & Co.'s CDS costs firmed 3 bps to 54 bps bid, 58 bps offered.

Merrill Lynch's CDS costs firmed 5 bps to 95 bps bid, 100 bps offered. Morgan Stanley's CDS costs closed 6 bps tighter at 123 bps bid, 127 bps offered. Goldman Sachs Group, Inc.'s CDS costs declined 5 bps to 119 bps bid, 123 bps offered.

Paul Deckelman contributed to this review

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