Hartford, Samsung, Daimler sell largely oversubscribed deals; new bonds mixed in trading

By Andrea Heisinger and Cristal Cody

New York, April 2 - Several recognizable names tapped the high-grade bond market on Monday at the beginning of a shortened holiday week.

Samsung Electronics America, Inc. sold $1 billion of five-year notes while another foreign company, Daimler Finance North America LLC offered $1.75 billion of paper in three tranches.

The Hartford Financial Services Group, Inc. priced $1.55 billion of senior notes in three parts as well as a concurrent offering of fixed- to floating-rate junior subordinated debentures to be priced at $25 each.

France's Caisse d'Amortissement de la Dette Sociale sold $600 million of five-year bonds under Rule 144A and Regulation S. Terms of the deal were not available at press time.

There was also a $225 million sale of three-year floating-rate notes from National Rural Utilities Cooperative Finance Corp.

There were deals announced in the preferred stock market including one from MFA Financial.

The market was busy for a Monday, as the primary is expected to see most of its new deals in the first two days of the week, sources said.

"There wasn't anything terrible [in the headlines], so they jumped in," one source said.

"Definitely top heavy this week."

The majority was from companies based overseas as earnings blackout has begun domestically. The shortened holiday week before Passover and Easter were also contributors.

"We had [U.S.] manufacturing [data] today, but it wasn't bad. Things will start to thin by Wednesday," the source said.

The Markit CDX Series 18 North American investment-grade index firmed 1 basis point to a spread of 90 bps on Monday.

Daimler Finance's three- and five-year tranches firmed 2 bps to 3 bps in the secondary market.

The tranche of notes due 2017 that Hartford Financial Services priced traded flat.

Samsung's notes edged 1 bp wider in trading.

Investment-grade bank and brokerage credit default swaps costs were higher on the day.

Bank CDS costs traded up 1 bp to 3 bps, while broker CDS prices widened by 3 bps on the day.

Treasuries traded higher on the day pushing yields down across the curve. The benchmark 10-year Treasury note yield fell 3 bps to 2.18%. The 30-year bond yield fell 2 bps to 3.32%.

Hartford sells $1.55 billion

The Hartford Financial Services Group priced $1.55 billion of senior notes (Baa3/BBB/BBB-) in three tranches, an informed source said.

The $325 million of 4% notes due 2017 sold at Treasuries plus 300 bps. The tranche sold at the tight end of talk in the 305 bps area, plus or minus 5 bps.

A $800 million tranche of 5.125% 10-year paper priced at Treasuries plus 300 bps. The notes also sold at the tight end of talk in the 305 bps area, plus or minus 5 bps.

There was a $425 million tranche of 6.625% 30-year bonds sold at 330 bps over Treasuries. The bonds priced at the low end of guidance in the 335 bps area, plus or minus 5 bps.

The informed source said there was about $750 million on the books for the three-year notes, $3.25 billion for the five-year paper and $2.25 billion for the 30-year tranche for a total of roughly $6.25 billion.

The deal is being done concurrently with a sale of $25 par 30-year fixed- to floating-rate junior subordinated debentures.

Citigroup Global Markets Inc. and Goldman Sachs & Co. were active bookrunners.

Proceeds of this and the concurrent offering are being used to repurchase 10% debentures, or if that does not take place, for general corporate purposes.

Hartford was last in the market with senior notes in a $1.1 billion offering in three tranches on March 18, 2010. The 4% five-year paper from that deal sold at 160 bps over Treasuries, a tranche of 5.5% 10-year notes sold at 185 bps and 6.625% 30-year bonds priced at 205 bps.

In the secondary market, the new tranche of notes due 2017 traded flat at 300 bps bid, one trader said.

No activity was seen initially in the other tranches, another trader said.

The insurance and financial services holding company is based in Hartford, Conn.

Daimler prices three tranches

Daimler Finance North America priced $1.75 billion of notes (A3/A-/A-) in three tranches, a market source away from the deal said.

The $600 million of two-year floating-rate notes priced at par to yield Libor plus 78 bps.

A $650 million tranche of 1.65% three-year paper sold at a spread of 118 bps over Treasuries. The paper priced at the tight end of talk in the 120 bps area, a source said.

The third part was $500 million of 2.4% five-year notes priced at Treasuries plus 138 bps. The tranche sold at the tight end of guidance in the 140 bps area.

Barclays Capital Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc. and Mizuho Securities USA Inc. were bookrunners.

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

Daimler Finance North America last priced notes in a $1.65 billion, three-tranche deal on January 4. The 2.3% three-year notes from that offering priced at 195 bps over Treasuries and the 2.95% five-year notes at 210 bps over Treasuries.

Daimler Finance's three- and five-year tranches traded tighter in the secondary market, sources said.

The notes due 2015 firmed to 116 bps bid, 111 bps offered in early trading after pricing late afternoon, according to traders.

The tranche of notes due 2017 traded at 135 bps bid, 132 bps offered.

The financing unit of automaker Daimler AG is based in Stuttgart, Germany.

Samsung prices $1 billion

Samsung Electronics America priced $1 billion of 1.75% five-year notes (A1/A/) to yield Treasuries plus 80 bps, a source close to the trade said.

The paper sold tighter than guidance in the 90 bps area, the source added. There was about $4.5 billion on the books.

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

Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Samsung were bookrunners.

The proceeds are being used for the expansion of semiconductor fabrication facilities in the United States and for general corporate purposes.

The notes are guaranteed by Samsung Electronics Co. Ltd.

Samsung's notes due 2017 traded soon after pricing at 76 bps offered, a trader said.

Late afternoon, a trader on another desk saw the notes trading at 81 bps bid, 76 bps offered.

The U.S. division of the South Korean electronics and home appliance products maker is based in Ridgefield, N.J.

National Rural taps floaters

National Rural Utilities Cooperative Finance priced $225 million of two-year floating-rate notes (A2/A/) at par to yield Libor plus 25 bps, according to an FWP filing with the Securities and Exchange Commission.

RBC Capital Markets LLC ran the books.

The market lender for electric cooperatives is based in Herndon, Va.

Hartford preps hybrids

The Hartford Financial Services Group will price fixed- to floating-rate $25 par junior subordinated debentures due 2042, according to a prospectus filed with the Securities and Exchange Commission.

The interest rate will be fixed until April 15, 2022. After that date, there will be a floating-rate based on three-month Libor that will be reset quarterly.

Hartford will apply to list the notes on the New York Stock Exchange.

Citigroup Global Markets Inc. and Goldman Sachs & Co. are bookrunners.

The proceeds from the sale will be used toward a planned repurchase of 10% fixed- to floating-rate junior subordinated debentures due 2068.

Hartford Financial is an insurance and financial services company based in Hartford, Conn.

MFA sells $25 par bonds

MFA Financial is selling at least $75 million of $25 par 30-year senior notes, a market source said.

Price talk is 8% to 8.125%.

The company will apply to list the notes on the New York Stock Exchange under the ticker symbol "MFO."

Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC are bookrunners.

The proceeds will be used to acquire mortgage-backed securities consistent with the firm's investment policy and for working capital, which may include the repayment of repurchase agreements.

MFA is a New York-based real estate investment trust engaged in the business of investing, on a leveraged basis, in residential agency and non-agency mortgage-backed securities.

Stephanie N. Rotondo contributed to this review

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