MetLife, Berkshire Hathaway, Motiva, ANZ sell bonds; spreads tighten; Motiva gains in trading

By Andrea Heisinger and Cristal Cody

New York, Jan. 6 - Motiva Enterprises, LLC, Metropolitan Life Global Funding I, Landwirtschaftliche Rentenbank, Berkshire Hathaway Finance Corp. and ANZ Banking Group Ltd. were among those selling bonds on a busy Wednesday in the investment-grade market.

Volume dropped slightly from the previous day when there was more than $25 billion in bonds priced. One source said Tuesday was the second-highest volume day ever in the high-grade market.

On Wednesday, Motiva Enterprises sold $2 billion by late morning in a two-tranche holdover sale from the previous day.

Berkshire Hathaway Finance was one of the last companies to jump into the market for the day, although it fit the trend of financials that have priced so far this week. The company priced $1 billion in two tranches.

MetLife Global Funding sold $2.5 billion in two tranches of short-dated bonds.

Germany's Rentenbank announced and sold its $1.5 billion deal of five-year notes in short order. It followed two other issues from Germany-based names - Deutsche Bank AG and KfW - that came to market on Tuesday.

Australia-based ANZ Banking Group priced $3 billion of notes in three tranches via Rule 144A.

A bond sale was also announced by ING Groep NV. Pricing is set for Thursday, an informed source said late in the afternoon.

In secondary trading, high-grade bonds narrowed on Wednesday, according to sources.

"I.G. spreads continue to grind tighter to 185 bps," one trader said.

Meanwhile, the yield on the 10-year Treasury note eased 6 basis points on Wednesday to 3.82%. The yield on the 30-year bond eased 8 bps to 4.69%.

Also, the CDX Series 13 North American high-grade index tightened 4 bps to a mid bid-asked spread level of 77 bps, according to a market source.

In addition, advancing issues stayed ahead of decliners on Wednesday. A source notes that overall market activity, as reflected in dollar volumes, rose about 7% to more than $16 billion.

A few new deals attracted attention in secondary trading, including that from Motiva Enterprises, while overall the financial sector was weaker, sources said.

Motiva prices two tranches

Motiva Enterprises priced $2 billion of notes in two tranches early in the day. The sale had gone overnight from Tuesday to gain more investors from Asia and Europe, a source close to the offering said.

The $1 billion tranche of 5.75% 10-year notes priced at a spread of 200 bps over Treasuries.

A $1 billion tranche of 6.85% 30-year notes priced at a spread of Treasuries plus 225 bps.

The Rule 144A and Regulation S deal was handled by Credit Suisse Securities and J.P. Morgan Securities.

The oil refining business is a joint venture between Shell Oil Co. and Saudi Refining, and is based in Houston.

Berkshire Hathaway sells $1 billion

Berkshire Hathaway Finance sold $1 billion of senior unsecured notes in two tranches, a source who worked on the sale said.

A $250 million tranche of two-year floating-rate notes priced at par to yield three-month Libor plus 12.5 bps.

A $750 million tranche of 5.75% 30-year bonds priced at Treasuries plus 115 bps.

The source said he was not sure about total demand on the books because of the lateness of pricing.

J.P. Morgan Securities was bookrunner.

Proceeds will be used to retire existing debt.

The deal is guaranteed by parent company Berkshire Hathaway Inc., which is based in Omaha, Neb.

High deal volume continues

The steady amount of deals coming into the market continued on Wednesday, as more financials - both domestic and from abroad - came to the market with large bond offerings.

On Wednesday, not one was less than $1 billion, although the Berkshire Hathaway sale was exactly that amount.

Foreign financials and other issuers are expected to have the high-grade market mostly to themselves for the rest of the week.

"Everyone wants to see how the first week [of the year] shakes out," a syndicate source said. "No one wants to be the first to come in."

The previous day had been nearly dominated by issuers from Europe. There was slightly more diversity on Wednesday, but many of the deals still came from overseas.

"We should see some Yankee stuff next week," another source said. "That's what our docket is looking like anyway."

The source said he was surprised to hear earlier in the day that Tuesday had the second-highest amount of issuance ever for a single day.

"That was kind of strange, but they were all big deals, so it didn't take many," he said.

Spreads in the investment-grade market continued to grind tighter on Wednesday, a secondary source said. They are averaging 185 bps, the source said.

MetLife offers short bonds

MetLife Global Funding priced $2.5 billion of notes in two tranches by mid-afternoon, an informed source said.

The $1 billion of floating-rate notes due 2011 priced at par to yield three-month Libor plus 40 bps.

A $1.5 billion tranche of 2.5% three-year notes priced at Treasuries plus 103 bps.

Both notes were sold via Rule 144A.

Barclays Capital, Deutsche Bank Securities, Morgan Stanley and UBS Securities were bookrunners.

The subsidiary of insurance and financial services provider MetLife Inc. is based in Wilmington, Delaware.

ANZ Banking prices three tranches

ANZ Banking Group priced $3 billion of notes in three tranches later in the afternoon, a source away from the deal said. It was the largest sale on a day when none were less than $1 billion.

The $500 million of 2.4% three-year notes priced at a spread of Treasuries plus 87.5 bps.

A $1.25 billion tranche of 3.7% five-year notes priced 115 bps over Treasuries, while the $1.25 billion of 5.2% 10-year notes priced at 130 bps over Treasuries.

They were sold under Rule 144A.

Goldman Sachs & Co. and J.P. Morgan Securities were bookrunners for the sale from the financial services company based in Melbourne, Australia.

Rentenbank sells $1.5 billion

Rentenbank priced $1.5 billion of 3.125% five-year notes at 99.514, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were Credit Suisse Securities, Deutsche Bank Securities and Goldman Sachs & Co.

Proceeds will be used by the lender for Germany's agriculture and food industry to finance lending activities, including refinancing existing liabilities.

The issuer is based in Frankfurt.

ING plans offering

Dutch financial services company ING Groep announced a sale of notes, with pricing expected on Thursday, a source close to the sale said.

The notes will be priced via Rule 144A. No size or maturity has been set.

Deutsche Bank Securities, Goldman Sachs & Co. and ING Securities are bookrunners.

The issuer is based in Amsterdam, the Netherlands.

Motiva tightens nearly 50 bps

Motiva's bonds did "quite a bit better" once they hit secondary trading, a source said.

The 30-year bonds were at 177 bps bid, 170 bps offered, one trader said. That was improved from 225 bps at pricing.

"And the 10-years are at 158 bps bid without an offering. Those are doing about 40, 50 basis points from where they came." That tranche priced at 200 bps over.

Looking at overall secondary trading in the industrials sector, it was a "little bit better" on Wednesday, a trader said. "There was a general tightening."

MetLife, Berkshire narrow in secondary

ANZ Banking Group's three tranches of new bonds did not seen much action in secondary.

"The three-years were launched at 87.5 bps, the five-years at 115 bps and the 10-years at 132 bps. I haven't seen a follow on that."

New deals from Berkshire Hathaway Finance and MetLife Global Funding also had not shown much activity, according to sources.

"I didn't see much in secondary."

Berkshire Hathaway sold $1 billion in two tranches on Wednesday. Berkshire's 30-year priced at 115 bps over Treasuries. In secondary activity, the bonds were "trading at 106 bid, 102 offered," a source said.

One trader, though, saw MetLife's notes due 2013, which priced at 103 bps over Treasuries, offered at 90 bps over on Wednesday.

"We're still tightening, including in the insurance sector."

Barclays' 10-years tighten 5 bps

New bonds from Barclays Bank plc were trading better Wednesday. The bank had sold $3 billion in 5.125% 10-year notes on Tuesday at 148 bps over.

By Wednesday, the bonds from the London-based financial services company had tightened to 145 bps bid, 140 bps offered, according to a trader.

But overall, the finance sector was a "little weaker," a trader said.

Still, some issuers saw more interest.

Citigroup Inc.'s high-grade bonds came in on Wednesday.

According to one source, Citigroup's 6.375% four-year bonds tightened 20 bps to 240 bps. Also, the New York-based bank's 5.5% bonds due 2014 tightened 30 basis points to 222 bps over on Wednesday.

G.E. Capital bonds firm

Meanwhile, General Electric Capital Corp.'s 5.5% 10-year bonds tightened to 177 bps bid, 174 bps offered, a trader said late Wednesday. The bonds priced on Tuesday at 180 bps over.

G.E. Capital also sold 2.8% 3-year bonds at 130 bps over. On Wednesday, a trader quoted the bonds at 130 bps bid, 127 bps offered.

Another source reported that G.E. Capital's 5.625% bonds due 2018 tightened 8 bps to 137 bps over on Wednesday.

The Fairfield, Conn.-based company is the financing arm of General Electric Co.

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