Tyco Electronics pulls $1.5 billion deal as effects of shaky market hit investment grade

By Andrea Heisinger

Omaha, July 26 - A $1.5 billion, two-tranche deal from Tyco Electronics was pulled Thursday, a casualty of unfavorable conditions in the debt market, a market source said.

The deal was composed of five and 10-year notes, the source said. Goldman-Sachs & Co. and UBS Investment Bank were joint bookrunners.

Meanwhile Kimberly-Clark Corp.'s new senior notes (A2/A+) "held in there" a source said, with the $950 million of 6.125% 10-year notes trading at a spread of 133 basis points, and the $700 million in 6.625% 30-year notes at a spread of 167 bps. The 10-year notes priced Wednesday at a spread of 128 bps and the 30-year notes at 168 bps, the source said.

Citigroup Global Markets Inc., Lehman Brothers Inc. and JP Morgan Securities Inc. were joint bookrunners on the deal.

On a day when the overall stock market was in a shambles, one market source said in investment grade all they saw were people hitting bids.

"We were already 15-20 (basis points) wider right off the bat this morning," they said.

There's no real money coming into investment grade, the source added.

"There will not be much new issuance coming in until the market gets its footing."

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