Santander prices $500 million of 4.625% notes; Alcoa firms; Best Buy, Gap bonds widen

By Sheri Kasprzak and Cristal Cody

New York, April 14 - High-grade pricing activity fell off sharply compared to the earlier part of the week, but a sellside source said that this was not surprising for a Thursday afternoon.

"It's actually pretty typical," he said of the pattern of many pricings earlier in the week.

"It's not that unusual for things to slow down as the week goes on, but I do think it was a pretty good week. There has been lots of demand; most stuff coming is in line with expectations."

Heading up the light action on Thursday, Santander Holdings USA, Inc. brought $500 million of senior notes, said a term sheet filed with the Securities and Exchange Commission.

The notes (Baa1/A/AA-) are due in April 19, 2016, and have a 4.625% coupon priced at 99.559 to yield 4.725%.

Overall investment-grade Trace volume fell nearly 10% to just over $11 billion, a market source said.

"Very, very light," a trader said. "Pretty much a mixed tone."

In secondary trading, the new five-year notes from Hyundai Steel Co. were slightly firmer.

Alcoa Inc.'s 5.4% notes due 2021, which priced at 195 bps over Treasuries on Wednesday, "got as wide as 199 at one point and now is trading at 198, 196," a trader said.

The new bonds from clothing retailer Gap, Inc., which sold $1.25 billion of 10-year notes on April 7, widened, a trader stated.

Best Buy Co.'s new 10-year notes sold in March also widened, a trader said.

The Markit CDX Series 14 North American investment-grade index was flat at a spread of 95 bps, according to Markit Group Ltd.

Treasuries ended the day down, sending yields up. The 10-year note yield rose 4 bps to 3.5%. The 30-year bond yield edged up 1 bp to 4.55%.

Santander five-years

Santander's five-year non-callables saw their spread come in at Treasuries plus 250 bps.

Goldman, Sachs & Co. and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, including possible acquisitions and funding investments in the company's subsidiaries.

Based in Boston, Santander is the parent company of Sovereign Bank, a federally chartered savings bank.

Alcoa widens

Alcoa's 5.4% notes due 2021, which were as wide as 199 at one point, were seen by another trader at 198 bps offered.

New York-based Alcoa is an aluminum producer.

Hyundai firmer

Hyundai Steel's new 4.625% five-year notes last traded on Thursday afternoon at 243 bps bid, 241 bps offered, a trader said.

Earlier the notes, which priced at 249 bps over Treasuries, were seen at 242 bps bid, 238 bps offered and in the gray markets at 246 bps bid, 242 bps offered, other traders said.

Gap weaker

Gap's 5.95% split-rated 10-year notes (Baa3/BB+/BBB-), which priced at a spread of Treasuries plus 245 bps, traded on Thursday "3 basis points wider," a trader said.

The clothing retailer is based in San Francisco.

Best Buy wider

Best Buy's new 5.5% notes due 2021, which priced on March 8 at a spread of 200 bps over Treasuries, also widened, a trader said.

"Best Buy 21s were 5 wider," the trader said.

The electronics and entertainment retailer is based in Richfield, Minn.

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