Week ends on high note as Wal-Mart prices $2.75 billion new issue

By Andrea Heisinger

Omaha, Aug. 17 - Wal-Mart Stores Inc. priced a $2.75 billion issue in two tranches Friday, ending the week on a high note.

"It's a good day when Wal-mart has a new issue," one trader said.

The company's $500 million issue of 5.8% 11-year notes priced at 99.823 with a spread of 150 basis points to Treasury and a yield of 5.823%. The $2.25 billion tranche of 6.5% 30-year notes priced at 99.924 with a spread of 115 bps to Treasury and a yield of 6.506%.

A move by the Federal Reserve to cut its discount rate by half a point benefited investment-grade trading, a market source said.

"It was definitely a lot better today, even from yesterday," the source said. "It was a much better tone and credit spreads were tighter."

Countrywide Financial Corp. and Bear Stearns bonds were trading a little better on the Fed cuts, a secondary source said, while Residential Capital was faring worse.

There were several new issues this past week including $2.6 billion of notes in three tranches from Johnson & Johnson, $2.2 billion in floaters from GE Capital Corp. and $2 billion in floaters from Wells Fargo & Co.

Wachovia Corp. had a couple of new issues, with $1.75 billion in floaters and a $500 million offering of floaters upsized from $250 million.

Safeway Inc. had $500 million in notes and Appalachian Power Co. had a $500 million offering of senior notes in two tranches.

Things could pick up next week if there are a couple of days of stability in the market, a market source predicted, meaning there could be one day where multiple new issues are priced.

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