Glencore, Analog Devices, Entergy among corporate trades; Analog weakens; Entergy firms

By Aleesia Forni and Andrea Heisinger

New York, May 22 - Corporate issuers continued to price high-grade bonds in Wednesday's market, led by a sale in five tranches by Switzerland's Glencore Funding LLC.

The unit of Glencore International plc sold $5 billion of bonds in tranches due 2016, 2018 and 2023. The two shorter maturities also had floating-rate tranches. The sale was done under Rule 144A and Regulation S.

The bookrunners were BNP Paribas Securities Corp., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and RBS Securities Inc.

The full terms of the sale were not available at press time.

Elsewhere in the primary, Analog Devices, Inc. and Entergy Arkansas, Inc. also priced bonds.

Analog Devices tapped the market for $500 million of 10-year notes.

A $250 million sale of 10-year mortgage bonds was sold by Entergy Arkansas.

There was also a $1.25 billion sale of five-year covered bonds offered privately by Australia's Westpac Banking Corp.

Sovereign issuers dove into the U.S. market for the second day in a row.

The European Bank for Reconstruction and Development reopened its issue of 1.5% notes due 2020 to add $250 million. This will bring total issuance to $1.25 billion.

Another reopening came from Kommunalbanken AS, which tapped its issue of floating-rate notes due Feb. 20, 2018 to add $250 million.

KfW priced $3 billion of five-year notes early in the day.

In the preferred stock market, National Retail Properties Inc. sold $250 million of $25-par preferred shares. The size was increased from $100 million.

The market watched for reactions to testimony of Federal Reserve chairman Ben Bernanke before the Congressional Joint Economic Committee on Wednesday.

Bernanke made remarks that the Fed's stimulus that has included the purchase of Treasury bonds would continue. There was some mention by Bernanke during questions from Congress that the stimulus could begin tapering in the coming months if the job market improves.

"A lot of markets were down today," a syndicate source said after the close. "I think most [markets] dropped this afternoon, but everything got priced fine. Not much impact that I noticed."

Thursday could see action from issuers looking to price bonds ahead of the long Memorial Day holiday weekend and before Friday, which the source called a "non event" due to the early close.

The investment-grade secondary market was also focused on the comments from Bernanke on Wednesday, with one source noting that the day's headlines regarding the testimony were behind the market's movement.

The Markit CDX Series 20 North American Investment Grade index was 2 basis points wider at a spread of 72 bps.

In other secondary action, Analog's new issue was quoted 2 bps wider by a trader late during the session.

The trader saw Entergy's notes trading 6 bps better.

Investment-grade bank and brokerage credit default swap costs were mostly wider on Wednesday, according to a market source.

Bank of America Corp.'s CDS costs were 3 bps wider at 84 bps bid, 89 bps offered. Citigroup Inc.'s CDS costs were 2 bps wider at 82 bps bid, 87 bps offered. JPMorgan Chase & Co.'s CDS costs rose 1 bp to 75 bps bid, 78 bps offered. Wells Fargo & Co.'s CDS costs were also 1 bp wider at 63 bps bid, 66 bps offered.

Merrill Lynch's CDS costs declined 5 bps to 75 bps bid, 85 bps offered. Morgan Stanley's CDS costs rose 4 bps to 113 bps bid, 118 bps offered. Goldman Sachs Group, Inc.'s CDS costs were also 4 bps wider at 103 bps bid, 108 bps offered.

Analog sells 10-year notes

Analog Devices was in the day's session with a $500 million sale of 2.875% 10-year senior notes (A3/A-/) priced at Treasuries plus 90 bps, according to an FWP filing with the Securities and Exchange Commission.

A source said guidance was in the 100 bps area.

One trader quoted the notes 2 bps wider at 92 bps bid, 88 bps offered.

The active bookrunner was J.P. Morgan Securities LLC. Passives were BofA Merrill Lynch and Credit Suisse Securities (USA) LLC.

Proceeds are being used to redeem about $393 million of notes due 2014 and for general corporate purposes.

Analog Devices was last in the U.S. bond market with a $375 million sale of five-year notes on March 30, 2011.

The maker of circuits for electronic equipment is based in Norwood, Mass.

Westpac's $1.25 billion

Westpac Banking priced $1.25 billion of 1.375% five-year covered bonds (Aaa//AAA) to yield mid-swaps plus 35 bps, or Treasuries plus 51.75 bps, a market source said.

The notes were sold under Rule 144A and Regulation S.

The bookrunners were Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., JPMorgan, RBC Capital Markets LLC and Westpac Securities.

The Sydney, Australia-based financial services company was last in the U.S. bond market with a $2.25 billion sale of notes in two parts on Jan. 7. That offering included a 1.6% five-year note sold at 80 bps over Treasuries.

Entergy prices tight

Entergy Arkansas tapped the market for $250 million of 3.05% 10-year first mortgage bonds at a spread of Treasuries plus 105 bps, according to an FWP filing with the SEC.

Guidance was in the Treasuries plus 105 bps to 110 bps range, an informed source said. There was a do-not-grow provision on the size.

In trading, the notes were quoted 6 bps tighter at 99 bps bid, 95 bps offered.

The bookrunners were Barclays, KeyBanc Capital Markets Inc., RBS Securities and Stephens Inc.

Proceeds are being used to repay $350 million of 5.4% mortgage bonds at maturity on Aug. 1.

The utility company is based in Little Rock, Ark.

EBRD's tap

The European Bank for Reconstruction and Development reopened its issue of 1.5% notes due March 16, 2020 (Aaa/AAA/AAA) to add $250 million, a market source said.

Pricing was at a spread of mid-swaps plus 2 bps.

Total issuance will be $1.25 billion including $1 billion sold previously.

The bookrunners were BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and TD Securities USA Inc.

The lender to banks, businesses and industries is based in London.

KfW sells $3 billion

KfW sold $3 billion of 1% five-year notes (Aaa/AAA/AAA) to yield mid-swaps plus 4 bps, or Treasuries plus 21.3 bps, a market source said.

Pricing was at par to yield 1%.

The sale is guaranteed by the Federal Republic of Germany.

The bookrunners were Barclays, JPMorgan and Nomura Securities International Inc.

The German government-owned development bank is based in Frankfurt.

KBN's $250 million

Kommunalbanken reopened its issue of floating-rate notes due Feb. 20, 2018 (Aaa/AAA/) to add $250 million, a market source said.

The coupon is Libor plus 18 bps. Pricing was at 100.45 to yield Libor plus 15 bps.

Total issuance will be $1.15 billion including $900 million sold in two previous offerings.

Goldman Sachs International was the bookrunner.

The government-funded lender to municipalities is based in Oslo.

National Retail's preferreds

National Retail Properties sold $250 million of 5.7% $25-par perpetual series E cumulative preferred stock, a market source said.

The size was increased from $100 million.

Price guidance was in the 5.75% area, the market source said at midday.

The active bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC. Passive was Raymond James & Associates.

The Orlando-based real estate investment trust for retail properties plans to list the preferreds on the New York Stock Exchange under the ticker "NNPRE" within 30 days.

Proceeds are being used for general corporate purposes including funding future property acquisitions.

Aon gives terms

Aon plc gave the terms of its $250 million of 4.45% 30-year senior notes (Baa2/BBB+/BBB+) sold during Tuesday's session at a spread of Treasuries plus 137.5 bps.

Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners, according to an FWP filing with the SEC.

Proceeds are being used to repay commercial paper and for general corporate purposes.

The sale is guaranteed by London-based Aon Corp.'s subsidiary Aon Delaware.

The professional services company was last in the U.S. bond market with a reopening of 4.25% notes due 2042 to add $90 million.

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