NiSource, Reliance Steel, National Retail price on day of modest volume; bank paper mostly tighter

By Aleesia Forni and Andrea Heisinger

New York, April 9 - There was modest activity in the investment-grade bond market on Tuesday as a handful of mostly smaller sales priced.

There was an upsized $750 million trade of 30-year bonds from NiSource Finance Corp. that is guaranteed by parent company NiSource Inc. The company upsized the sale from $500 million.

Reliance Steel & Aluminum Co. tapped the market for $500 million of 10-year senior notes to help pay for its acquisition of Metals USA Holdings Corp.

National Retail Properties, Inc. priced $350 million of 10-year notes. The size was increased from $300 million.

A private $250 million sale of notes due 2039 was announced by Topaz Solar Farms LLC. Pricing is expected to be done Wednesday under Rule 144A and Regulation S.

Meanwhile, the Netherlands-based European Aeronautic Defense and Space Co. NV sold $1 billion of 10-year notes privately through its financing arm.

France's Caisse d'Amortissement de la Dette Sociale announced a sale of seven-year bonds to be offered under Rule 144A and Regulation S.

The European Investment Bank priced $5 billion of five-year notes by early afternoon.

In the preferred stock market, MFA Financial Inc. gave terms of its $175 million of cumulative redeemable preferreds priced late on Monday.

A trader said the issue had not freed to trade as of midday, but pegged the issue at $24.75. After the bell, a source quoted the paper at $24.75 bid, $24.85 offered.

A source who worked on two of the day's corporate sales said that "we're going into blackout season. It's going to be quiet."

The day's crop of sovereign issuers is "what we could be seeing for the near future," the source added.

The trend of a handful of issuers is set to continue on Wednesday, including a couple of sales that are going overnight to get overseas investors in on the books.

The Markit CDX Series 18 North American Investment Grade index was unchanged at a spread of 85 bps on Tuesday.

The secondary market saw bank and financial paper mixed on the day, with issues from J.P. Morgan and Merril Lynch tightening on the day, while paper from Bank of America traded wider.

NiSource upsizes

NiSource Finance tapped the market for an upsized $750 million of 4.8% bonds due 2044 (Baa3/BBB-/BBB-) to yield Treasuries plus 187.5 bps, according to a market source.

The size was increased from $500 million.

Bookrunners were Barclays, Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC.

Proceeds are being used to repay short-term borrowings under a commercial paper program and for general corporate purposes.

The notes are guaranteed by NiSource Inc.

NiSource was last in the U.S. bond market with a $750 million offering of notes due 2023 and 2043 on June 11, 2012.

The energy holding company is based in Merrillville, Indiana.

Reliance's $500 million trade

Reliance Steel & Aluminum sold $500 million of 4.5% 10-year senior notes (Baa3/BBB/) during the day's session at a spread of Treasuries plus 280 bps, an informed source told Prospect News.

There was a do-not-grow provision on the size of the sale.

Active bookrunners were BofA Merrill Lynch and J.P. Morgan Securities LLC. Wells Fargo Securities LLC was passive.

Proceeds are being used to finance a portion of the acquisition of Metals USA Holdings Corp. and its subsidiaries.

There is a mandatory call at 101 if the acquisition is not closed by Dec. 15, or if a merger termination event occurs.

The trade is guaranteed by the domestic subsidiaries that are a borrower or guarantor under a credit agreement or the company's 6.2% notes due 2016 and 6.85% notes due 2036.

The metals service center company is based in Los Angeles.

National Retail's 10-years

National Retail Properties priced an upsized $350 million of 3.3% 10-year notes (Baa2/BBB/BBB+) to yield 165 basis points over Treasuries, an informed source said.

There was "modest growth possible" on the size of the trade, which started at $300 million, the source said. Price talk was in the Treasuries plus 175 bps area.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC were active bookrunners. Passives were SunTrust Robinson Humphrey and U.S. Bancorp Investments Inc.

Proceeds are being used to repay debt under a credit facility, to fund future property acquisitions and for general corporate purposes.

National Retail was last in the U.S. bond market with a $325 million sale of 3.8% 10-year notes priced at 235 bps over Treasuries on Aug. 7, 2012.

The real estate investment trust for retail properties is based in Orlando.

EADS prices tight

The European Aeronautic Defense and Space Co. NV priced $1 billion of 2.7% 10-year notes (A2/A-/) to yield Treasuries plus 98 bps, an informed source said.

The size was talked in the $750 million to $1 billion range. Initial price guidance was in the 105 bps to 110 bps over Treasuries range.

The sale was done under Rule 144A and Regulation S.

Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were bookrunners.

The seller and manufacturer of several kinds of aircraft is based in Leiden, the Netherlands.

EIB's five-years

The European Investment Bank priced $5 billion of 1% five-year notes (Aaa/AAA/AAA) to yield mid-swaps plus 20 bps, or Treasuries plus 43.05 bps, a market source said.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were bookrunners.

The funding arm of the European Union is based in Kirchberg, Luxembourg.

Caisse plans deal

Caisse d'Amortissement de la Dette Sociale announced a sale of seven-year notes (Aa1//AAA), a market source said.

Initial price talk and size given in Tuesday's Prospect News Investment Grade Early Update was incorrect.

The sale is being done under Rule 144A and Regulation S.

BofA Merrill Lynch, Barclays and Citigroup Global Markets Inc. are bookrunners.

The French debt agency is based in Paris.

Topaz preps notes

Topaz Solar Farms is planning a $250 million sale of series B senior secured notes due 2039 (Baa2/BBB/BBB), a source close to the sale said.

The sale "could take place" on Wednesday, the source said.

Pricing is being done under Rule 144A and Regulation S.

Barclays, Citigroup Global Markets Inc. and RBS Securities Inc. are bookrunners.

The unit of First Solar, Inc. is based in Tempe, Ariz.

MFA's $25-pars

MFA Financial Inc. priced $175 million of 7.5% series B cumulative redeemable preferred stock late Monday, a market source reported.

The stock was priced at par of $25.

Morgan Stanley & Co. Inc., J.P. Morgan Securities LLC, UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used for general corporate purposes, including the redemption of all or part of the 8.5% series A cumulative redeemable preferreds.

There is $96 million of the series A preferreds outstanding.

The company is a New York-based real estate investment trust primarily engaged in investing in residential and non-residential mortgage-backed securities.

Bank of America widens

In trading, Bank of America's 7.375% notes due 2014 weakened 5 bps to 81 bps bid during the session, according to a market source.

The bank priced $3 billion notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

J.P. Morgan firms

The secondary also saw the $3 billion 6.3% issue from J.P. Morgan due 2019 tighten 4 bps to 156 bps bid.

J.P. Morgan priced the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

Merrill Lynch tightens

Meanwhile, Merrill Lynch's 6.875% notes due 2018 firmed 2 bps to 170 bps bid near the end of New York's session.

On April 22, 2008, the bank priced $5.5 billion ten-year notes at 320 bps over Treasuries.

Stephanie N. Rotondo contributed to this review

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