Enterprise, Kroger, Wells Fargo, Holcim, Viacom offer bonds; spreads ease, new deals trade

By Andrea Heisinger and Paul Deckelman

New York, Sept. 24 - Enterprise Products Operating LLC, Kroger Co., Wells Fargo & Co. and Holcim US Finance and Holcim Capital Corp. and Viacom Inc. sold issues of bonds on Thursday.

Half of the sales were done by early afternoon, with three of them totaling $1 billion or more.

Enterprise Products sold $1.1 billion in tranches of long 10-year notes and 30-year bonds. The size was increased slightly from $1 billion.

Kroger completed a simple sale of $500 million in six-year notes.

Wells Fargo priced $2 billion of five-year notes later in the day. Holcim was one of the last to price, selling $1 billion of long bonds in 10-and 30-year maturities.

Viacom did its deal quietly despite announcing it early in the day and launching in the afternoon. The company did $550 million, including a new six-year note and a reopening of a 10-year note.

The market "felt good," by the end of the day, said a source who worked on multiple deals.

Among the established issues in the secondary arena on Thursday, a market source said the newly rolled CDX Series 13 North American high-grade index widened by 3 basis points to a mid bid-asked spread level of 96 bps.

Advancing issues continued to lead decliners Thursday, by the same nearly 5-to-4 margin which had been seen on Wednesday.

Overall market activity, reflected in dollar-volume totals, rose 4% from Wednesday's pace.

Spreads in general were seen slightly wider, in line with lower Treasury yields; for instance, the yield on the benchmark 10-years narrowed by 4 bps on Thursday to 3.38%.

With a busy new-deal market continuing to crank out deals, secondary activity was again centered around aftermarket trading in such new issues as Kroger Co., Enterprise Products Operating and Holcim U.S. Finance/Holcim Capital Corp.

Viacom sells, reopens notes

Viacom priced $550 million senior unsecured notes in two tranches late in the day, according to an FWP filing with the Securities and Exchange Commission.

The $250 million of 4.25% six-year notes priced at a spread of Treasuries plus 195 bps.

The company also reopened its 5.625% notes due 2019 to add $300 million. They priced at Treasuries plus 200 bps. Total issuance for the notes is $550 million including $250 million issued on Aug. 26.

The sale was announced by mid-morning and priced in the afternoon, a source close to the deal said. It was done quietly.

"Yeah, it was kind of off the radar," a source away from the sale said. "We knew it was out there, but it wasn't that exciting I guess."

Bank of America Merrill Lynch, J.P. Morgan Securities and Wells Fargo Securities were bookrunners.

Proceeds will be used to pay down existing debt, including a revolving credit facility due in 2010 and a commercial paper program.

The entertainment and broadcasting company is based in New York City.

Enterprise Products offers upsized tranches

Enterprise Products Operating priced an upsized $1.1 billion of senior notes in two tranches by early afternoon.

The size was increased from $1 billion, a source said. The deal is guaranteed by Enterprise Products Partners, LP.

The $500 million of 5.25% notes due 2020 priced at Treasuries plus 195 bps.

A $600 million tranche of 6.125% 30-year notes priced at a spread of Treasuries plus 200 bps.

J.P. Morgan Securities, Bank of America Merrill Lynch, BNP Paribas Securities, Morgan Stanley & Co. and Mizuho Securities were bookrunners.

Proceeds will be used to repay $500 million of senior notes due in October at maturity, to reduce borrowings under a multi-year revolving credit facility and for general corporate purposes.

The midstream energy company is based in Houston.

Wells Fargo sells $2 billion

Wells Fargo offered $2 billion of 3.75% five-year notes late in the day at Treasuries plus 145 bps, an informed source said.

The deal "went extremely well, from what I understand," a source away from the deal said. "It was well oversubscribed, and they got $2 billion done."

It was the only bank or financial bond in the market for the day, with little in the way of competition.

"We were pretty happy with it," a source close to the deal said.

Goldman Sachs & Co., Morgan Stanley & Co. and Wells Fargo Securities ran the books.

The financial services company is based in San Francisco.

New deals flow ahead of earnings

Earnings blackouts are coming, sources said Thursday, which may have explained the past week's mostly steady supply of deals.

"We should see another week or so of solid [issuance] and then it will taper," a market source said.

Most of the deals for the day "were unexciting," the source said.

Another market source said "they [companies] were just trying to get them done."

Most were announced, priced and had term sheets out by late afternoon.

"That's what happens when the quarter is done," the second market source said.

Issuance "should be done" for the week, he said, adding that "someone may sneak something in tomorrow."

Kroger prices $500 million

Grocery store retailer Kroger offered $500 million of 3.9% six-year senior notes at Treasuries plus 158 bps. The sale was done by early afternoon.

Bookrunners were Bank of America Merrill Lynch and J.P. Morgan Securities.

Proceeds will be used to repay short-term borrowings and those under a revolving credit facility, with any remainder going to repay or repurchase debt.

The issuer is based in Cincinnati, Ohio.

Holcim units price two tranches

Holcim US Finance and Holcim Capital priced $1 billion of notes in two tranches, an informed source said.

A $750 million tranche of 6% 10-year notes priced at Treasuries plus 280 bps.

The $250 million tranche of 6.875% 30-year notes priced at Treasuries plus 290 bps.

Both were sold via Rule 144A.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets and Deutsche Bank Securities.

The manufacturer and supplier or mineral components and cement is based in Waltham, Mass.

New Kroger bonds better

When the new Kroger 3.90% notes due 2015 were freed for secondary dealings, a trader quoted the Cincinnati-based supermarket company's new paper at a spread over comparable Treasuries of 148 bps bid, 143 bps offered.

That was in contrast to the 158 bps level at which the $500 million bond issue had priced earlier in the day.

Enterprise Products pops in aftermarket

A trader said that Enterprise Products' 5.25% notes due 2020 had tightened to 183 bps bid, 181 bps offered.

That represented a solid gain from the 195 bps level at which $500 million issue was priced.

He also saw the other half of that deal - Enterprise's $600 million of 6.125% bonds due 2039 - at 187 bps bid, 187 bps offered, a bit tighter than the 200 bps over spread.

Holcim heads higher

Holcim U.S. Finance and Holcim Capital Corp.'s $750 million of 6% notes due 2019 were seen going out at 260 bps bid, 255 bps offered, versus their 280 bps level at pricing.

Its $250 million of 2039 bonds were offered at 260 bps with no bid - versus the 290 bps level at which the bonds had priced.

Wells Fargo straddles issue price

Among the financial names, Wells Fargo Corp.'s new 3¾% notes due 2014 were seen by a trader having widened marginally to 147 bps bid, 145 bps offered - versus the 145 bps at which the $2 billion of bonds had priced.

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