AmEx, Daimler, Westpac, RBC bring large deals to primary; Nucor, AmEx notes meet demand

By Aleesia Forni and Andrea Heisinger

New York, July 24 - Four large issues from financial names were among the issuers in the high-grade bond market on Wednesday.

American Express Credit Corp., Daimler Finance North America LLC, Royal Bank of Canada and Australia-based Westpac Banking Corp. all tapped the market.

AmEx sold $3 billion of bonds in three parts. The sale included three-year notes with both fixed rates and floating rates along with five-year notes.

The AmEx sale was "a little over 2.5 times" oversubscribed, a source close to it said, putting the books at about $7.5 billion.

Daimler Finance also priced $3 billion of notes, but did so in four tranches. There were notes with maturities of 2016 and 2018, each with two tranches including floaters.

Westpac Banking sold $1.4 billion of notes in two parts via bookrunners J.P. Morgan Securities Inc. and Morgan Stanley & Co. LLC.

The sale from the Australia-based banking organization included five-year floaters and five-year notes. Pricing details were not available at press time.

Also in the market was RBC, which priced $2 billion of five-year notes, following up a sale of covered bonds the previous week.

In non-financial names tapping the market, Nucor Corp. brought a $1 billion sale in tranches due 2023 and 2043.

American Airlines, Inc. announced a private $1.408 billion sale of class A pass-through certificates.

There was an auction of five-year Treasury notes that saw "OK demand," one source said, adding that they "don't think it really affected anything."

The flow of financial names into the primary doesn't show any signs of slowing as the day's $10.4 billion haul was made up of sales from that sector, save $1 billion of it.

"It's all opportunistic," said one source who worked on a couple of the day's trades. "They're jumping in while they can."

The investment-grade secondary bond market's tone was positive on Wednesday, with the day's new deals meeting strong demand, one trader noted.

The trader saw both tranches of Nucor's new deal trading better in the secondary market near the end of the day.

American Express Credit's notes were also trading tighter to close the session.

Investment-grade bank and brokerage credit default swap costs were higher on the day, according to a market source.

Bank of America Corp.'s CDS costs were 3 bps higher at 106 bps bid, 111 bps offered. Citigroup Inc.'s CDS costs increased 2 bps to 102 bps bid, 107 bps offered. JPMorgan Chase & Co.'s CDS costs were 1 bp higher at 82 bps bid, 87 bps offered. Wells Fargo & Co.'s CDS costs were also 1 bp higher at 65 bps bid, 69 bps offered.

Merrill Lynch's CDS costs rose 3 bps to 95 bps bid, 105 bps offered. Morgan Stanley's CDS costs increased 5 bps to 138 bps bid, 143 bps offered. Goldman Sachs Group, Inc.'s CDS costs were also 5 bps higher at 127 bps bid, 132 bps offered.

AmEx does $3 billion

American Express Credit was in the market with a $3 billion sale of senior notes (A2/A-/A+) in three parts, a market source said.

A $1 billion tranche of 1.3% three-year notes priced at a spread of Treasuries plus 68 bps. Initial price talk was in the 70 bps to 75 bps range over Treasuries.

The notes were quoted 4 bps better at 64 bps bid, 60 bps offered.

There was also $1.2 billion of three-year floating-rate notes sold at par to yield Libor plus 51 bps. Price guidance was at the Libor equivalent to talk on the three-year fixed-rate notes.

Finally, there was $800 million of 2.125% five-year bonds priced at 78 bps over Treasuries. Talk was initially in the low 90 bps area.

Bookrunners were Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities LLC.

The New York-based financial services company was last in the U.S. bond market with a $750 million reopening of 1.75% notes due 2015 on Aug. 14, 2012.

Daimler's four parts

Daimler Finance North America tapped the market for $3 billion of notes (A3/A-/A-) in four tranches sold under Rule 144A and Regulation S, an informed source said.

There was $750 million of three-year notes sold at a spread of Treasuries plus 85 basis points.

A second part was $750 million of three-year floating-rate notes priced at par to yield Libor plus 68 bps.

There was $250 million of five-year floaters sold at par to yield Libor plus 86 bps.

Finally, there was $1.25 billion of five-year notes offered at 105 bps over Treasuries.

Bookrunners were BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Mitsubishi UFJ Securities (USA) Inc.

The sale is guaranteed by Daimler AG.

Proceeds are being used for general corporate purposes, including intra-company loans.

Daimler was in the U.S. bond market with a $3 billion sale in three tranches on Jan. 7. That offering included a 1.25% three-year note priced at 90 basis points over Treasuries and a 1.875% five-year note sold at Treasuries plus 115 bps.

The financing unit of Daimler AG is based in Stuttgart, Germany.

RBC prices tight

The Royal Bank of Canada priced $2 billion of 2.2% five-year senior global medium-term notes (Aa3/AA-/) at a spread of Treasuries plus 83 bps, a source close to the trade said.

Guidance was initially in the high 80 bps to 90 bps range over Treasuries, the source said.

Bookrunners were Goldman Sachs & Co. and RBC Capital Markets LLC.

The sale follows a $1.75 billion sale of three-year covered bonds on July 16.

The financial services company is based in Montreal.

Nucor sells $1 billion

Nucor was in the day's market with a $1 billion sale of senior notes (Baa1/A/) in two parts, a market source said.

A $500 million tranche of 4% 10-year notes sold at a spread of Treasuries plus 140 bps.

A trader quoted the notes at 138 bps bid, 135 bps offered near the end of the day's action.

The second part was $500 million of 5.2% 30-year bonds priced at Treasuries plus 155 bps.

The trader saw the notes at 153 bps bid later during the session.

BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were active bookrunners. Passives were Deutsche Bank Securities Inc. and Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes.

Nucor was last in the U.S. bond market with a $600 million offering of 12-year notes on Sept. 16, 2010.

The maker of steel and steel products is based in Charlotte, N.C.

American plans pass-through

American Airlines announced a $1.408 billion offering of class A pass-through certificates, series 2013-2 in a press release.

The trade is being done under Rule 144A.

The company's pass-through trust holds equipment notes to be issued by American that are secured by 41 currently-owned Boeing 737-823 aircraft, 14 Boeing 757-223 aircraft, one Boeing 767-323ER aircraft and 19 Boeing 777-223ER aircraft.

Proceeds are being used by American to reimburse itself for the repayment of existing financing for the aircraft. That financing includes of an enhanced equipment trust transaction done by American in July of 2009, secured notes financing from July of 2009 and an enhanced equipment trust transaction from Oct. of 2011.

The commercial airline, which is a subsidiary of AMR Corp., is based in Fort Worth, Texas.

Paul Deckelman contributed to this review

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