Citi, BP Capital, Nordea, Hyatt among sellers in busy primary; new recent deals mostly tighter

By Aleesia Forni and Andrea Heisinger

New York, May 7 - Issuance in the investment-grade bond market accelerated on Tuesday, including offerings from Citigroup Inc., BP Capital Markets plc and Nordea Bank AB.

Citigroup sold $1.25 billion of 10-year subordinated notes. The sale saw about $3.7 billion of demand, an informed source said.

London-based BP Capital priced $3 billion of bonds in three parts. The sale included five-year floating-rate notes that were added prior to the launch, along with fixed-rate tranches with maturities of 2018 and 2023.

Sweden's Nordea Bank priced $2.5 billion of paper due 2016 and 2018 in three tranches via Rule 144A and Regulation S.

The tranche of three-year floaters saw about $1 billion of investor interest, the three-year notes had $900 million of demand, and the five-year notes saw about $2.3 billion of demand, a source said.

Smaller corporate offerings came from S.C. Johnson & Son Inc., Hyatt Hotels Corp. and Public Service Electric & Gas Co.

S.C. Johnson sold bonds for the first time since 2010, in a $400 million trade of 30-year maturity. There was about $2.1 billion on the books for the trade, a source said.

PSE&G tapped the market for $500 million of 10-year secured notes.

Hospitality company Hyatt priced $350 million of 10-year senior notes.

There was a $250 million reopening of notes due 2018 from European Bank for Reconstruction and Development.

The Netherlands' LeasePlan Corp. NV sold $750 million of five-year notes via Rule 144A and Regulation S. A source said that the offering saw about $1.8 billion of investor demand.

There was a slightly upsized $630 million sale of five-year notes from Canada's Harvest Operations Corp. The size was increased from $600 million, a source said.

There was "quite a variety" of issuers in the market for the day, a syndicate source said after the close.

"A lot of industrials came - and financials. [It was] a strong market today," he added.

The Markit CDX North American Investment Grade index was 1 basis point wider at a spread of 69 bps.

In the secondary market, the new two-part deal from BP deal traded 1 bp to 3 bps better near the end of the session.

In other trading, Citigroup's new issue was also quoted tighter in the secondary market.

The bank's existing 6.375% notes due 2014 were flat on the day, while the 8.5% notes due 2019 firmed 1 bp.

Meanwhile, recent deals from Ford Motor Credit Co. LLC and Federal Realty Investment Trust traded tighter during Tuesday's session, one trader said.

Ford, which came to market with a $1.5 billion crossover sale of notes in two parts on Monday, saw its fixed-rate notes firm 10 bps.

Monday's issuance from Federal Realty also firmed on the day, as the trader quoted the $275 million of 10-year notes 1 bp better.

Xcel Energy Inc.'s $450 million deal was quoted 1 bp wider compared to levels seen late Monday.

BP sells $3 billion

BP Capital Markets sold $3 billion of notes (A2/A/) in two parts during the day's session, a market source said.

A tranche of five-year floating-rate notes was added on reverse inquiry prior to the launch, the source said.

There was $250 million of the five-year floater priced at par to yield Libor plus 51 bps.

There was $1.25 billion of 1.375% five-year notes priced at a spread of Treasuries plus 68 bps. Talk was in the 70 bps area.

The notes firmed 3 bps near the end of the session, with a trader quoting them at 65 bps bid, 63 bps offered.

The final part was $1.5 billion of 2.75% 10-year notes sold at 108 bps over Treasuries. Guidance was in the 110 bps area.

The notes were quoted 1 bp better at 107 bps bid, 106 bps offered.

Bookrunners were BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC and SG Americas Securities LLC.

BP was last in the U.S. bond market with a $2 billion trade in three parts on Nov. 1, 2012. That sale included a 1.375% five-year note priced at 65 bps over Treasuries and a 2.5% 10-year note sold at Treasuries plus 85 bps.

The unit of oil company BP plc is based in London.

Citi does 10-years

Citigroup tapped the market for $1.25 billion of 3.5% 10-year subordinated notes (Baa3/BBB+/BBB+) at Treasuries plus 178 bps, an informed source said.

A trader saw the notes at 174 bps offered.

Citigroup Global Markets Inc. was bookrunner.

The financial services company is based in New York City.

Nordea's three-parter

Nordea Bank sold $2.5 billion of notes (Aa3/AA-/AA-) in three tranches, a source close to the sale said.

A $625 million tranche of three-year floating-rate notes was priced at par to yield Libor plus 46 bps.

There was also $625 million of 0.875% three-year bonds sold at a spread of Treausuries plus 60 bps.

The third part was $1.25 billion of 1.625% five-year bonds sold at Treasuries plus 88 bps.

Pricing was done under Rule 144A and Regulation S.

Bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The Stockholm-based financial services company was last in the U.S. bond market with a $1 billion sale of 10-year subordinated notes on Sept. 17, 2012.

S.C. goes long

S.C. Johnson & Son tapped the market for $400 million of 4% 30-year bonds (/A-/A-) at a spread of 110 bps over Treasuries, a source said.

Bookrunners were BofA Merrill Lynch, Barclays and Citigroup Global Markets Inc.

Proceeds will be used for general corporate purposes.

S.C. Johnson last tapped the U.S. bond market with a $550 million sale of 4.8% 30-year bonds at Treasuries plus 130 bps on Aug. 25, 2010.

The consumer products company is based in Racine, Wisc.

Hyatt's bonds

Hyatt Hotels sold $350 million of 3.375% 10-year senior notes (Baa2/BBB/) during the day's session to yield Treasuries plus 65 bps, a market source said.

Goldman Sachs & Co., J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc. were bookrunners.

Proceeds are being used to pay the redemption price in connection with the redemption of notes due 2015 and to repurchase notes due 2019 tendered for in a cash offer, along with accrued interest on the existing notes and related fees and expenses.

The Chicago-based hospitality company last tapped the U.S. bond market with a $500 million offering in two tranches on Aug. 4, 2011. That sale included a 5.375% 10-year note sold at 300 bps over Treasuries.

LeasePlan's fives

LeasePlan has priced $750 million of 2.5% five-year notes (Baa2/BBB+/A-) to yield Treasuries plus 185 bps, a market source said.

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

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and RBS Securities Inc. were bookrunners.

The financial institution specializing in car fleet management is based in Almere, the Netherlands.

Harvest upsizes

Harvest Operations sold an upsized $630 million of 2.125% five-year senior notes (A1/A+/A+) to yield Treasuries plus 145 bps, a source close to the trade said.

The size was initially $600 million, the source said.

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

Bookrunners were BofA Merrill Lynch, Barclays, HSBC Securities (USA) Inc. and RBS Securities Inc.

Proceeds are being used to refinance a $400 million bridge loan.

There is a guarantee from Korea National Oil Corp.

The oil and natural gas company is based in Calgary, Ab.

CAT's reopening

Caterpillar Financial Services reopened its issue of 2.625% notes due 2023 to add $100 million, according to an FWP with the Securities and Exchange Commission.

Pricing was at a spread of Treasuries plus 85 bps.

Total issuance will be $350 million including $250 million sold on Feb. 25 at 83 bps over Treasuries.

Bookrunner was BofA Merrill Lynch.

The funding arm of heavy equipment maker Caterpillar is based in Nashville, Tenn.

PSE&G sells 10-years

Public Service Electric & Gas sold $500 million of 2.375% 10-year secured medium-term notes, series I, (A1/A-/A+) at 99.681, according to an FWP with the SEC.

Bookrunners were BNP Paribas Securities Corp., Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities USA Inc. and Scotia Capital (USA) Inc.

Proceeds are being added to the company's general funds and used for general corporate purposes.

The Newark, N.J.-based utility was last in the U.S. bond market with a $400 million sale of 30-year bonds on Jan. 7.

EBRD's tap

The European Bank for Reconstruction and Development reopened an issue of 1% notes due 2018 (Aaa/AAA/AAA) to add $250 million, a market source said.

Pricing was at a spread of mid-swaps minus 1 bp, or Treasuries plus 22.8 bps.

Total issuance will be $1.25 billion including $1 billion sold on March 19 at the same spread as the reopened notes.

Bookrunners were Deutsche Bank Securities Inc. and TD Securities (USA) LLC.

The lender to banks, businesses and industries is based in London.

Ford notes firm

The secondary saw Ford Motor Credit's $1 billion tranche of 1.7% three-year notes traded 10 bps tighter during Tuesday's session at 130 bps bid, 128 bps offered, a trader said.

The notes were sold at a spread of Treasuries plus 140 bps on Monday.

The sale also included $500 million of three-year floating-rate notes priced at par to yield Libor plus 125 bps.

The company is based in Dearborn, Mich.

Federal Realty trades better

In other trading, Monday's new issue from Federal Realty Investment Trust traded 1 bp better at 111 bps bid, 108 bps offered.

The company priced the slightly upsized $275 million issue of 2.75% 10-year senior notes to yield Treasuries plus 112 bps.

The real estate investment trust for retail and mixed-use buildings is based in Rockville, Md.

Xcel prices tight

Xcel Energy's $450 million of 0.75% three-year notes, which priced at Treasuries plus 42 bps, traded 1 bp weaker compared to levels seen late Monday.

A trader quoted the notes at 40 bpd bid, 38 bps offered.

The Minneapolis-based public utility holding company priced the issue on Monday.

Citi flat to tighter

In other secondary market action, Citigroup's 6.375% notes due 2014 were unchanged on the day at 65 bps bid, according to a market source.

Citi priced the $2.5 billion of five-year notes at Treasuries plus 380 bps on Aug. 5, 2009.

The bank's 8.5% 10-year notes tightened 1 bp to 58 bps bid.

The $1 billion of notes due 2019 sold at Treasuries plus 437.5 bps on June 11, 2009.

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