American Express unit, American Honda, Credit Mutuel among those issuing; TransAlta gains

By Aleesia Forni and Andrea Heisinger

New York, Nov. 8 - There was a burst of activity in the investment-grade bond market on Thursday with Canadian National Railway Co., American Express Centurion Bank, American Honda Finance Corp. and France's Credit Mutuel-CIC Home Loan SFH among the issuers.

Canadian National Railway priced $500 million in two maturities.

The $1 billion sale of five-year notes from Credit Mutuel was done under Rule 144A and Regulation S.

American Honda sold $750 million of floating-rate notes in two maturities in a private sale.

The day's largest deal came from American Express Centurion, which sold $1.3 billion in two tranches due 2015 - one with a fixed rate, the other floating.

Georgia Power Co. sold $400 million of three-year notes while Paccar Financial Corp. priced $250 million of three-year medium-term paper.

Terms of a $1 billion sale of seven-year covered bonds priced Wednesday by Norway's Sparebank 1 Boligkreditt AS were given early on Thursday.

There was further activity in the preferred stock market as Solar Capital Ltd. priced $100 million of $25-par 30-year senior notes after the size was increased from $75 million.

The flurry of new deals followed a post-Election Day lull on Wednesday when little was priced amid worries about the economy domestically and in Europe.

Those worries persisted in the stock market Thursday, especially worries about the so-called fiscal cliff of debt coming due in the United States. Little change in the make-up of Congress following Tuesday's elections stoked the worries.

"We were a little soft to begin today but bounced back," a market source who followed two of the day's sales said after the close.

Issuers are still eager to price bonds ahead of the holidays and end of the year.

"They only have so much time left," the source said.

Friday could see some activity ahead of the long Veterans Day holiday weekend, market sources said.

The Markit CDX Series 18 North American Investment Grade index widened 4 basis points to a spread of 104 bps on Thursday.

The secondary market saw Monday's issuances from Interpublic Group of Cos. Inc. and Boardwalk Pipeline LP widen during trading.

Dow Chemical Co.'s $2.5 billion notes were also quoted weaker on Thursday.

In other trading, TransAlta Corp.'s 4.5% senior notes due 2022 traded 3 bps better, while the 0.8% notes due 2022 from Bank of Montreal were quoted wider during the session.

Investment-grade bank and brokerage credit default swaps costs were wider on Thursday.

Bank of America's CDS costs widened 4 bps to 165 bps bid, 170 bps offered. Citi's CDS costs were wider by 4 bps at 160 bps bid, 165 bps offered. JPMorgan's CDS costs rose 1 bp to 106 bps bid, 111 bps offered. Wells Fargo's CDS costs were 2 bps wider at 83 bps bid, 88 bps offered.

Merrill Lynch's CDS costs widened 4 bps to 165 bps bid, 175 bps offered. Morgan Stanley's CDS costs rose 1 bp to 224 bps bid, 229 bps offered. Goldman Sachs' CDS costs were wider by 1 bp at 186 bps bid, 191 bps offered.

American Honda's floaters

American Honda Finance sold $750 million of notes (A1/A+/) in two maturities on Thursday, a source close to the sale said.

There was $300 million of one-year floating-rate notes priced at par to yield Libor plus 3 bps.

The second part was $450 million of two-year floaters sold at par to yield Libor plus 22 bps.

There is no call option.

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

Bank of America Merrill Lynch, Loop Capital Markets LLC and Wells Fargo Securities LLC were the bookrunners.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

AmEx Centurion prices

American Express Centurion Bank sold $1.3 billion of notes (A2/A-/) in two parts, a market source said.

A $550 million tranche of three-year floating-rate notes sold at par to yield Libor plus 45 bps.

The $750 million of three-year fixed-rate notes priced at a spread of Treasuries plus 55 bps.

Full terms were unavailable at press time.

Bookrunners were Barclays, Goldman Sachs & Co. and RBS Securities Inc.

Proceeds will be used for general corporate purposes, including for debt refinancing.

The financial services company is based in New York City.

Railway sells two tranches

Canadian National Railway sold $500 million of notes (A3/A-/) in tranches due 2022 and 2042, a market source said.

The sale included $250 million of 2.25% 10-year notes priced at a spread of Treasuries plus 67 bps.

There was also $250 million of 3.5% 30-year bonds sold at a spread of Treasuries plus 77 bps.

Bookrunners were Bank of America Merrill Lynch, RBC Capital Markets LLC and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, including redemption and refinancing of outstanding debt.

Canadian National was last in the U.S. bond market with a $700 million sale of notes in two parts on Nov. 7, 2011. The offering included a 2.85% 10-year note priced at 95 bps over Treasuries.

The railway transportation company is based in Montreal.

Credit Mutuel's $1 billion

Credit Mutuel-CIC Home Loan SFH priced $1 billion of 1.5% five-year covered bonds (Aaa/AAA/AAA) under Rule 144A and Regulation S, a market source said.

Pricing was at a spread of mid-swaps plus 82 bps.

Bookrunners were Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs and J.P. Morgan Securities LLC.

The bank is based in Strasbourg, France.

Paccar prices three-year

Paccar Financial tapped the market with a $250 million offering of 0.7% three-year medium-term notes (A1/A-/A) priced to yield 38 bps over Treasuries, an informed source said.

Barclays and BNP Paribas Securities were the bookrunners.

The provider of retail and commercial truck financing for Paccar Inc. is based in Bellevue, Wash.

Georgia Power taps market

Georgia Power priced $400 million of 0.625% three-year medium-term senior notes (A3/A/A+) at a spread of Treasuries plus 30 bps, a market source told Prospect News.

Bank of America Merrill Lynch, JPMorgan, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities were the bookrunners.

Proceeds will be used to redeem $100 million of 6.05% senior monthly notes due on Dec. 1, 2038 and for general corporate purposes, including the company's continuous construction program.

Georgia Power sold $400 million of 0.75% three-year notes at 42 bps over Treasuries on Aug. 7.

The electric utility and subsidiary of Southern Co. is based in Atlanta.

Sparebank gives terms

Sparebank 1 Boligkreditt priced $1 billion of 1.75% seven-year covered bonds (Aaa//AAA) to yield Treasuries plus 81 bps, a market source said.

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

Bookrunners were Bank of America Merrill Lynch, Barclays, Citigroup and JPMorgan.

The commercial bank is based in Stavanger, Norway.

Solar Capital prices

Solar Capital sold $100 million of 6.75% 30-year $25-par senior notes, the company said in a press release on Thursday.

The deal was upsized from an expected $75 million and came in line with price talk.

But not everyone was ecstatic about the deal.

"Nobody was allowed in; there's no selling group, no syndicate," a trader remarked.

He noted that the company had done a private placement in May of a 5.875% seven-year secured bond.

"An unsecured 30-year senior note for this tiny little company at 6.75% didn't look incredibly attractive to me," he said. "I don't think a lot of people will be playing in it."

He saw a less 35 cent bid for paper early in the session and a less 5 cent offer closer to midafternoon.

The company will apply to list the notes on the New York Stock Exchange.

Bookrunners were Citigroup, Morgan Stanley & Co. LLC, Wells Fargo Securities, Deutsche Bank Securities Inc. and RBC Capital Markets.

Proceeds will be used to pay down debt and for general corporate purposes.

Solar Capital is a closed-end, externally managed, non-diversified management investment company.

Interpublic deal firms

Both tranches of Interpublic Group's recent deal widened on the day.

The $300 million tranche of 2.25% five-year notes were seen trading at 175 bps bid, 170 bps offered.

Interpublic sold the notes at a spread of Treasuries plus 160 bps on Monday.

The $500 million of 3.75% 10-year notes was quoted 15 bps wider. The notes traded at 225 bps bid, 220 bps offered.

The New York City-based global advertising and marketing company sold the notes at 210 bps over Treasuries.

Boardwalk Pipeline tightens

Boardwalk Pipeline's $300 million of 3.375% senior notes due 2023 were quoted at 178 bps bid, 173 bps offered.

The Houston-based natural gas and liquids pipeline and storage company priced the notes on Monday at a spread of Treasuries plus 170 bps.

Dow Chemical widens

Dow Chemical's $2.5 billion two-part sale of notes, which priced on Tuesday, traded 8 bps wider during the session.

The $1.25 billion tranche of 3% 10-year notes was quoted at 153 bps bid, 149 bps offered.

The notes priced at a spread of Treasuries plus 145 bps.

Meanwhile, the $1.25 billion of 4.375% 30-year bonds, which sold with a spread of 160 bps over Treasuries, traded at 168 bps bid, 166 bps offered.

The specialty chemical company is based in Midland, Mich.

TransAlta better

TransAlta's 4.5% senior notes due Nov. 15, 2022 that priced in a dollar deal a week ago firmed 3 bps on the day to 307 bps bid, 297 bps offered, a trader said.

The company sold the $400 million of the notes (Baa3/BBB-/) on Nov. 2 at Treasuries plus 300 bps.

The electricity generation company is based in Calgary, Alta.

Bank of Montreal weaker

Bank of Montreal's 2.55% senior notes due 2022, which priced at a spread of 85 bps over Treasuries, are wider at 102 bps bid, 97 bps offered, a trader said on Thursday.

Bank of Montreal sold $1 billion of the 10-year notes along with $1 billion of 0.8% senior notes due 2015 on Nov. 1.

The financial services company is based in Toronto and Montreal.

Stephanie N. Rotondo and Cristal Cody contributed to this review

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