Genworth Holdings, AvalonBay price as strong tone holds; new issues trade better in secondary

By Aleesia Forni

Virginia Beach, Dec. 5 - Genworth Holdings Inc. and Ameren Illinois Co. were among the issuers to bring new deals to the high-grade primary market on Thursday.

Genworth Holdings sold $400 million of 4.8% long 10-year senior notes with a spread of Treasuries plus 195 basis points, an informed source said.

Ameren Illinois priced $280 million of 4.8% 30-year senior secured notes at a spread of Treasuries plus 93 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

Meanwhile, AvalonBay Communities, Inc. was in the market on Thursday with $350 million of 4.2% medium-term notes due Dec. 15, 2023, which sold at 99.806, according to an FWP filed with the SEC.

Netherlands-based Nederlandse Waterschapsbank NV priced a $500 million issue of floating-rate notes due June 12, 2015 on Thursday at par to yield a spread of Libor plus 6 bps, according to a market source.

There was also a three-part sale of notes from BNP Paribas SA, though details were not available at press time.

More than $20 billion of U.S. high-grade deals priced during the week, falling in line with expectations.

With "nothing lined up for tomorrow," the week's supply is expected to remain at that level, a syndicate source said.

In the secondary market, a trader saw Genworth Holdings' new 4.8% long 10-year notes move 1 bp tighter near the session's close.

In other trading, the new 30-year 4.8% issue from Ameren Illinois traded 3 bps better on the day.

"Spreads are mostly unchanged, maybe a little better," a market source said late Thursday.

Genworth brings $400 million

Genworth Holdings priced $400 million of 4.8% senior notes (Baa3/BBB-/) due 2024 at Treasuries plus 195 bps, an informed source said.

Pricing was at 99.895 to yield 4.814%.

The notes were sold at the tight end of talk.

The notes were quoted at 194 bps bid, 191 bps offered in the secondary market.

Deutsche Bank Securities Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the joint bookrunners.

The company plans to use proceeds to make a capital contribution to one or more of its U.S. mortgage insurance subsidiaries to satisfy the higher capital requirements expected to be imposed by government-owned and government-sponsored enterprises as a part of the anticipated revisions to their eligibility standards for qualifying mortgage insurers.

The notes are guaranteed by Genworth Financial Inc.

The financial security company is based in Richmond, Va.

AvalonBay new issue

AvalonBay Communities priced a $350 million sale of 4.2% medium-term notes due Dec. 15, 2023, according to an FWP filed with the SEC.

The notes priced at 99.806.

JPMorgan, Barclays and BofA Merrill Lynch were the joint bookrunners.

Proceeds will be used to repay three outstanding secured debt financings owed to Fannie Mae and to pay related prepayment penalties. Remaining proceeds will be used for general corporate purposes.

The manager and developer of apartment communities is based in Arlington, Va.

Ameren prices tight

In other primary action, Ameren Illinois sold $280 million of 4.8% 30-year senior secured notes (A3/A/BBB+) on Thursday at a spread of Treasuries plus 93 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.464 to yield 4.834%.

The notes sold at the tight end of talk.

In the secondary market, the notes were quoted at 91 bps bid, 89 bps offered.

The notes will be secured by a series of Ameren's first mortgage bonds until the release date.

Proceeds will be used to repay the company's 8.875% senior secured notes due Dec. 15, 2013 and short-term debt.

BNP Paribas Securities Corp., BofA Merrill Lynch, Mitsubishi UFJ Securities and RBC Capital Markets LLC were the joint bookrunners.

SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC, Drexel Hamilton, Samuel A. Ramirez & Co. and U.S. Bancorp Investments Inc. were the co-managers.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

Nederlandse's $500 million

Nederlandse priced a $500 million issue of floating-rate notes due June 12, 2015 on Thursday at par to yield a spread of Libor plus 6 bps, according to a market source.

BNP Paribas Securities and TD Securities were the joint bookrunners.

The issuer provides loans to municipalities and other public programs and is based in the Hague, Netherlands.

Bank, broker CDS costs rise

Investment-grade bank and brokerage CDS prices mostly rose on the day, according to a market source.

Bank of America Corp.'s CDS costs widened 2 bps to 85 bps bid, 89 bps offered. Citigroup Inc.'s CDS costs widened 1 bp to 81 bps bid, 85 bps offered. JPMorgan Chase & Co.'s CDS costs ended 1 bp wider at 74 bps bid, 78 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 47 bps bid, 51 bps offered.

Merrill Lynch's CDS costs closed 1 bp wider at 86 bps bid, 90 bps offered. Morgan Stanley's CDS costs were flat at 98 bps bid, 102 bps offered. Goldman Sachs Group Inc.'s CDS costs widened 1 bp to 102 bps bid, 106 bps offered.

Paul Deckelman contributed to this review.

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