Morgan Stanley, Reuters, DDR price amid Fed comments; Dell bonds flat following earnings

By Aleesia Forni and Andrea Heisinger

New York, May 16 - The investment-grade primary took a step back on Thursday with a small number of new trades in the market.

Thomson Reuters Corp. priced $850 million of notes in two parts. The sale included $500 million of three-year notes and $350 million of 30-year bonds.

The total size of the trade was increased from $800 million, a source said.

Morgan Stanley sold $2 billion of 10-year notes.

There was a $300 million crossover offering of 10-year notes from DDR Corp. A source said the sale priced tight to talk.

The Federal Reserve commented Thursday on the possibility of pulling back on quantitative easing efforts, such as bond buyback, that were put in place during the financial crisis.

"Kind of sleepy out there, but we're OK with that," a source said after the close. "We've been absorbing a lot [of new issues] lately."

There was "not much reaction really" in the market to the Fed news, the source said.

"I would imagine it would be more when they're going to actually do it."

In trading of preferred stock, Entergy Louisiana LLC's new $100 million issue of 4.7% first mortgage bonds due 2063 - a $25-par issue - freed early in the day and was pegged at $24.95 at midday.

The notes were called down a dime at $24.90 as of the market's close.

Qwest Corp.'s $750 million of 6.125% $25-par notes due 2053 - a deal that came Tuesday - was also seen at $24.95 at midday.

The paper rallied and put on 34 cents, ending at $24.30, a source said.

A trader remarked that he wasn't even seeing many markets for recent $1,000-par issues from UBS AG and Fifth Third Bancorp. He said he believed both were trading just slightly north of par.

In the secondary market, a trader quoted the new bonds from Morgan Stanley at 228 basis points bid, 225 bps offered.

"Pretty active trading session today," one trader said near the end of the session, adding that spreads in the telecommunications and technology sector were "largely unchanged."

The source added that bonds from Dell Inc. were unchanged following the company's earnings announcement.

The trader quoted the company's 4.65% bonds due 2021 at par bid, 100.75 offered.

Thomson upsizes

Thomson Reuters priced $850 million of notes (Baa1/A-/A-) in two tranches, a market source said.

The source said the size was increased from $800 million.

There was $500 million of 0.875% three-year notes priced at a spread of Treasuries plus 60 bps.

A second tranche was $350 million of 4.5% 30-year bonds sold at 155 bps over Treasuries.

Bookrunners were Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and RBS Securities Inc.

Proceeds are being used for general corporate purposes, including to repay a portion of $750 million of 5.95% notes due in July 2013 and $250 million of 5.25% notes due in August 2013, both upon maturity.

Thomson Reuters was last in the U.S. bond market with a $350 million sale of 10-year notes on Sept. 28, 2011.

The multinational media and information company is based in New York City.

Morgan Stanley's 10-year

Morgan Stanley was in the day's session with a $2 billion sale of 4.1% 10-year global medium-term notes (Baa2/BBB+/BBB+) priced at 99.943, according to an FWP filing with the Securities and Exchange Commission.

A trader quoted the notes at 228 bps bid, 225 bps offered late during the session.

Morgan Stanley was bookrunner.

The financial services company is based in New York City.

DDR prices tight

Real estate investment trust DDR did a $300 million sale of 3.375% 10-year senior notes (Baa3/BBB-/BB+) priced at Treasuries plus 158 bps, a market source said.

Guidance was in the 160 bps area, they added.

UBS Securities LLC was active bookrunner. Passives were Jefferies & Co., RBS, U.S. Bancorp Investments Inc. and Scotia Capital (USA) Inc.

Proceeds will be used to pay part of the cash costs in connection with the acquisition of the Blackstone Joint Venture for 30 shopping centers.

The issuer is based in Beachwood, Ohio.

Stephanie N. Rotondo contributed to this review.

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