NuStar, Anadarko, WellPoint, Toyota, Simon Property price in high grade; notes firm in trading

By Andrea Heisinger and Cristal Cody

New York, Aug. 9 - NuStar Logistics, LP, Anadarko Petroleum Corp., Simon Property Group, LP, WellPoint, Inc., Toyota Motor Credit Corp., Bank of America Corp. and Orange & Rockland Utilities Inc. sold bonds in the high-grade primary on Monday in a continuing trend of a busy start to the week.

Split-rated Anadarko Petroleum was the last deal to price for the day and also the largest. The deal was upsized to $2 billion of seven-year notes - up from $1.5 billion. The notes were sold off the high-grade syndicate desk at the tight end of price guidance.

This was one of three split-rated sales for the day, and there are more expected in the next few days, a source said.

Toyota Motor Credit priced $1 billion of three-year medium-term notes.

Indianapolis-based WellPoint priced an upsized $1 billion of long bonds in two tranches. The size was increased by $250 million.

Oil and natural gas pipeline NuStar Logistics sold an upsized $450 million of 10-year notes.

Orange & Rockland Utilities was one of the first sales to get done. The utility subsidiary of Consolidated Edison priced $170 million of notes in two tranches under Rule 144A.

Simon Property upsized its deal due 2021 to $900 million from $750 million.

Split-rated Developers Diversified sold an upsized $300 million of 10-year notes off the high-grade syndicate desks. The sale was increased in size by $50 million.

Bank of America priced a two-tranche deal of InterNotes that amounted to $91.172 million.

An upcoming deal was announced late in the day by International Lease Finance Corp. The airline leasing company is planning a $2.5 billion sale of notes in three tranches for Wednesday.

A majority of the day's sales was upsized due to lingering demand for investment-grade paper, one source said.

"It's kind of leftover from last week, but we've seen a lot on the books for a couple of weeks now," a syndicate source said.

Most of the deals were only upsized by $50 million to $250 million, with the Anadarko Petroleum sale increased by $500 million.

"We should see more of this," the source said of the clamoring for bonds from highly rated companies.

Volume in secondary trading rose on Monday on the new debt. Overall investment-grade Trace volume gained 6% to about $10 billion, according to a source.

The new notes from Toyota Motor Credit, Simon Property Group and NuStar firmed in the secondary, traders said.

The CDX Series 14 North American investment-grade index tightened 2 bps to a spread of 102 bps, according to a source.

Treasuries moved little on light volume ahead of the Federal Reserve meeting on Tuesday.

The yield on the benchmark 10-year note rose 1 bp to 2.83%. The yield on the 30-year bond rose 2 bps to 4.02%.

Toyota arm sells short bonds

Toyota Motor Credit sold $1 billion of 1.375% three-year notes (Aa2/AA) by mid-afternoon at a spread of 62 bps over Treasuries, an informed source said.

This was at the tight end of price talk in the 65 bps area.

UBS Investment Bank, Barclays Capital Inc. and HSBC Securities were bookrunners.

The company last sold three-year notes in a $250 million deal on Jan. 25, 2010. Its last bond sale was $125 million of one-year floaters priced on June 22.

The new notes were seen trading earlier in the day in the gray market at 61 bps bid, 58 bps offered, a trader said.

Later in the afternoon, the notes firmed in secondary trading to 60 bps bid, 57 bps offered, a source said.

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

Anadarko's $2 billion deal

Anadarko Petroleum priced an upsized $2 billion of 6.375% seven-year notes late in the day at par to yield 6.375%, an informed source who worked on the sale said.

The notes were priced tighter than talk in the 6.5% yield area. The size was initially $1.5 billion, but was increased by $500 million when the deal was launched.

The notes (Ba1/BBB-/BBB-) sold at a spread of Treasuries plus 415.6 bps.

J.P. Morgan Securities Inc. and Barclays Capital were active bookrunners.

Proceeds are going to repay an outstanding $1.3 billion of a Midstream subsidiary note, with any remainder used for general corporate purposes.

Anadarko's outstanding high-grade debt was active in secondary trading, according to a source. The 6.95% notes due 2019 were quoted trading at 375 bps over Treasuries, while the 5.95% notes due 2016 were seen at 420 bps.

The oil and gas exploration and production company is based in The Woodlands, Texas.

Successful day in high grade

There may not have been a rush of huge deals in the market today, as there was the previous Monday that had $11.5 billion of sales, but there was still more than $5.9 billion of bonds priced. That was spread among eight deals, with five of them upsized at least slightly.

The good vibe is expected to last for the remainder of the week as some lower-rated issuers tap the market.

"We have some coupon hunters out there," a market source said at the end of the day.

There is one upcoming deal that could break coupon records for its maturity, she said. An issue of three-year notes priced by International Business Machines Corp. the previous week was thought to have broken the record for lowest coupon for that maturity at 1%.

A source at a smaller syndicate desk said there is a "fairly active week ahead," adding that it's "not going to be as crazy" as the previous week.

The market source agreed and said that she saw a busy week, but not as heavy with issuance or mega-deals. There were at least two upcoming sales in addition to the International Lease Finance deal, she said.

"I think we have a few more fallen angels getting into the action this week," she said, referring to split-rated or downgraded companies. "We may have a few junky crossovers as well."

WellPoint prices $1 billion

Health benefits company WellPoint priced an upsized $1 billion of notes (Baa1/A-/A-) in two tranches by late afternoon, a source away from the deal said.

The size was increased from $750 million.

A $700 million tranche of 4.35% 10-year notes priced at a spread of 155 bps over Treasuries. The tranche was talked in the range of 155 to 158 bps and priced at the tight end of that.

The second $300 million tranche of 5.8% 30-year notes sold at Treasuries plus 187.5 bps. The notes were talked in the 190 bps area.

Bookrunners were Goldman Sachs & Co. Inc. and UBS Investment Bank.

Proceeds are being used for working capital and general corporate purposes, including repayment of short- and long-term debt.

The issuer is based in Indianapolis.

Simon Property upsizes

Simon Property Group priced an upsized $900 million of 4.375% senior unsecured notes (A3/A-/A-) due 2021 before the market close at a spread of 160 bps over Treasuries, a market source close to the deal said.

The size was initially $750 million.

Bank of America Merrill Lynch, Credit Suisse Securities, Deutsche Bank Securities and J.P. Morgan Securities Inc. were bookrunners.

Proceeds are being used to fund the cash purchase of certain outstanding senior notes tendered pursuant to a purchase offer and for general corporate purposes.

Simon Property's new notes firmed after they were released for secondary trading, according to sources.

The notes tightened to 155 bps offered and firmed late in the day to 158 bps bid, 156 bps offered in the secondary.

The real estate investment trust for malls and shopping centers is based in Indianapolis.

NuStar prices 10-years

NuStar Logistics sold an upsized $450 million of 4.8% 10-year senior unsecured notes (Baa3/BBB-/BBB-) to yield Treasuries plus 200 bps, a syndicate source away from the deal said.

The size was increased by $50 million from $400 million.

The deal is guaranteed by parent company NuStar Energy LP and NuStar Pipeline Operating Partnership LP.

Bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities, J.P. Morgan Securities and Mizuho Securities USA Inc.

Proceeds are going to repay a portion of outstanding principal under a revolving credit facility.

In secondary trading, the notes were seen firmer at 198 bps bid, 195 bps offered, sources said.

The oil pipeline and storage company is based in San Antonio.

Developers prices split-rate deal

Developers Diversified Realty priced an upsized $300 million of 7.875% 10-year split-rated senior unsecured notes to yield 8%, an informed source said.

The size was increased by $50 million, and the deal was more than two times oversubscribed with about $700 million on the books.

The majority of interest was off the investment-grade side, the source said, and it was run entirely off of high-grade syndicate desks.

The notes (Baa3/BB/BB) priced at a spread of Treasuries plus 517.8 bps.

J.P. Morgan Securities Inc. and Wells Fargo Securities ran the books.

Proceeds are being used to repay debt.

The real estate investment trust for shopping and business centers is based in Beachwood, Ohio.

ConEd unit sells bonds

Orange & Rockland Utilities sold $170 million of notes (Baa1/A-/A-) in two tranches by early afternoon, a source close to the deal said.

A $55 million tranche of 2.5% five-year notes priced at a spread of Treasuries plus 100 bps.

The second tranche was $115 million of 5.5% 30-year bonds priced at 150 bps over Treasuries.

They were sold under Rule 144A.

Bookrunner was Citigroup Global Markets.

The size of the deal likely prevented the offering from registering much in secondary trading.

"No markets," one trader said.

The electric and natural gas subsidiary of Consolidated Edison is based in Pearl River, N.Y.

BofA InterNotes

Bank of America sold $91.172 million of senior unsecured InterNotes in two tranches, according to a 424B3 filing with the Securities and Exchange Commission.

A $20.688 million tranche of 3.8% six-year notes priced at par to yield 3.8%. The second $70.484 million tranche of 5% 10-year notes also priced at par, to yield 5%.

Bookrunners were Bank of America Merrill Lynch and InCapital LLC.

The financial services company is based in Charlotte, N.C.

ILFC plans $2.5 billion sale

International Lease Finance is planning a $2.5 billion sale of split-rated senior secured first lien notes (Ba3/BBB-/BBB-) in three tranches, a market source said.

The deal is expected to price on Wednesday.

It consists of $900 million of four-year notes, $800 million of six-year notes and $800 million of eight-year notes.

They are being sold under Rule 144A.

Bank of America Merrill Lynch, Citigroup Global Markets and J.P. Morgan Securities are bookrunners.

Proceeds are being used to refinance a portion of AIG loans.

The aircraft leasing company is based in Los Angeles.

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