Apache, Delhaize, Vivendi sell as Fed meets; bonds hold in trading; Hartford Financial firms

By Andrea Heisinger and Cristal Cody

New York, April 3 - There were three corporate deals in the high-grade bond market on Tuesday, all from names that haven't priced bonds in the United States since 2010 or earlier.

Apache Corp. sold $3 billion of notes in three tranches to help repurchase debt to pay for an acquisition.

Food retailer Delhaize Group SA/NV priced $300 million of seven-year notes.

There was another multi-tranche offering from French entertainment company Vivendi SA. It totaled $2 billion and was priced under Rule 144A and Regulation S.

France's Caisse d'Amortissement de la Dette Sociale sold $2 billion of five-year paper after upsizing from the $600 million announced along with the deal on Monday.

The preferred stock market saw Hartford Financial Services Group Inc. give terms of its $600 million deal of fixed-to-floating-rate $25-par junior subordinated debentures that was announced and priced on Monday.

MFA Financial Inc. priced $100 million of $25-par notes in the preferred market.

A new deal of $25-par perpetual preferred shares was announced by Aspen Insurance Holdings Ltd.

There were minutes released from the Federal Reserve Federal Open Market Committee meeting in March, but not much news out of it other than no change to key interest rates or any indication of a third round of quantitative easing. There also weren't many signs that those at the meeting think the economy has gotten much better than a couple of months ago.

"The market definitely fell a little, but everything was at least launched by [the Fed announcement]," a syndicate source said.

Some were disappointed that QE3 seems not to be on the table at the moment, another source said, adding that "equities were down. So were Treasuries."

Wednesday's primary is expected to be quiet, the syndicate source said.

"Corporates are holding in pretty well," a trader said.

The Markit CDX Series 18 North American investment-grade index eased 1 basis point to a spread of 91 bps on Tuesday.

No trading activity was seen late afternoon in the new deals from Cades, Vivendi and Apache that were released for secondary trading late in the day.

"Too early," one trader said.

Hartford's 10-year and 30-year bonds sold the previous day traded stronger on Tuesday.

"It's doing better by about 10 basis points," a trader said.

Samsung Electronics America, Inc.'s notes were mostly unchanged in the secondary market.

"It's hanging in there," a trader said.

Daimler Finance North America LLC's notes due 2017 firmed about 3 bps in trading.

Bank and financial paper has been holding in the last few sessions, with no major changes since the previous week, sources said.

"We've been a little quieter. It is a short week," one trader said.

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

Banks were wider. Bank of America's CDS costs rose 3 bps to 229 bps bid, 234 bps offered. Citi's CDS costs traded 5 bps wider at 202 bps bid, 207 bps offered.

Brokers also widened. Merrill Lynch's CDS costs rose 3 bps to 249 bps bid, 259 bps offered.

Morgan Stanley's CDS costs traded 3 bps wider at 311 bps bid, 316 bps offered. Goldman Sachs' CDS costs traded 3 bps weaker at 233 bps bid, 238 bps offered.

Treasuries plunged and yields climbed more than 10 bps on the longer end of the curve. The benchmark 10-year note yield jumped to 2.3% from 2.18%. The 30-year bond yield traded 11 bps higher to 3.43%.

Apache prices $3 billion

Apache sold $3 billion of notes (A3/A-/A-) in three maturities, an informed source said.

In addition to all of the tranches selling tighter than price guidance, the deal was also more than four times oversubscribed with about $13.5 billion total on the books, the source said.

"Orders came in quickly, so we just shut it down," they said.

The $400 million of 1.75% five-year paper priced at a spread of Treasuries plus 70 bps. The tranche was sold tighter than guidance in the 95 bps area.

There was $1.1 billion of 3.25% 10-year notes sold at 100 bps over Treasuries. The paper was priced tighter than talk in the range of 115 to 120 bps, the source said.

A third tranche was $1.5 billion of 4.75% bonds due 2043 priced at Treasuries plus 135 bps. These notes were also sold tighter than talk in the 150 bps area.

Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were active bookrunners.

Proceeds are being used to finance part of the cash portion of the purchase price in connection with the acquisition of Cordillera Energy Partners III LLC and to repay $400 million of 6.25% notes maturing on April 15.

Apache was last in the market with a $1 billion deal in two parts on Nov. 30, 2010. A 3.625% note due 2021 from that offering priced at 95 bps and a 5.25% bond due 2042 priced at 125 bps.

The Houston-based energy company does exploration, transportation and production for natural gas, crude oil and natural gas liquids.

Vivendi's private deal

French entertainment company Vivendi priced $2 billion of notes (Baa2/BBB/BBB) in three tranches, an informed source said.

Books for the trade were more than two times oversubscribed at about $4.75 billion, the source said.

A $550 million tranche of 2.4% three-year paper priced 185 bps over Treasuries. The notes were sold tighter than guidance in the low 200 bps area, the source said.

There was $650 million of 3.45% five-year notes sold at a spread of Treasuries plus 235 bps. The tranche was sold at the tight end of talk in the 237.5 bps area.

The third part was $800 million of 4.75% 10-year notes priced at Treasuries plus 250 bps. These notes sold at the low end of the guidance range of 250 to 262.5 bps.

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

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

Vivendi last sold bonds in the U.S. market in a $1.4 billion trade in two tranches on April 1, 2008. The 5.75% five-year notes from that offering priced at 325 bps over Treasuries while a 6.625% 10-year note priced at 312.5 bps over Treasuries.

The entertainment company is based in Paris.

Delhaize offers $300 million

Delhaize Group priced $300 million of 4.125% seven-year senior notes (Baa3/BBB-/) to yield 250 bps over Treasuries, a market source said.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC were active bookrunners.

Proceeds are being used to fund the repurchase of a cash tender offer up to €300 million 5.625% senior notes due 2014 and accrued and unpaid interest and premium amounts.

The notes are guaranteed by Delhaize US Holding, Inc., Delhaize America and other U.S. subsidiaries.

Delhaize was last in the U.S. market with a $300 million deal of 5.875% five-year notes priced at 437.5 bps over Treasuries on Jan. 27, 2009.

The food retailer is based in Brussels, Belgium.

Cades sells five-years

Caisse d'Amortissement de la Dette Sociale priced an upsized $2 billion of 2.125% five-year notes under Rule 144A and Regulation S, a market source said.

The deal had been announced on Monday at an initial size of $600 million and went overnight before pricing.

The notes (Aaa/AA+/AAA) were sold at a spread of mid-swaps plus 95 bps, or Treasuries plus 120.5 bps.

Bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC.

The French debt agency is based in Paris.

Hartford's hybrid terms

The Hartford Financial Services Group priced $600 million of 7.875% fixed-to-floating rate $25-par 30-year junior subordinated debentures, according to an FWP filed with the Securities and Exchange Commission.

When the deal was first announced on Monday, it was expected that the company would issue $500 million of notes.

The interest rate will be fixed until April 15, 2022. It will then be based on Libor plus 559.6 basis points. The floating rate will be reset quarterly.

Interest payments can be deferred for up to 10 years without an event of default.

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

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

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's $25-par notes

MFA Financial sold $100 million of 8% $25-par 30-year senior notes, a market source said.

Price talk was 8% to 8.125% and the original size was expected to be at least $75 million.

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 ran the books. 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.

Aspen preps preferreds

Aspen Insurance Holdings intends to sell at least $100 million $25-par perpetual noncumulative preference shares, a market source said.

Price talk is 7.25% to 7.75%.

Aspen Insurance will apply to list the preference shares on the New York Stock Exchange under the ticker symbol "AHLPB."

Citigroup Global Markets Inc., Barclays Capital Markets, UBS Securities LLC and Wells Fargo Securities LLC are bookrunners.

Proceeds will be used for general corporate purposes, including supporting insurance and reinsurance activities through operating subsidiaries, as well as for repurchasing ordinary shares from time to time.

Aspen Insurance is an insurance and reinsurance company based in Hamilton, Bermuda.

Hartford Financial tightens

Hartford Financial's senior notes (Baa3/BBB/BBB-) sold the previous day traded as much as 10 bps better in Tuesday's secondary session, according to a trader.

The tranche of 4% notes due 2017 traded mostly flat at 299 bps bid. Hartford Financial sold $325 million of the notes at Treasuries plus 300 bps.

The tranche of 5.125% notes due 2022 firmed to 291 bps bid, 286 bps offered. The company sold $800 million of the 10-year notes at Treasuries plus 300 bps.

The tranche of 6.625% bonds due 2042 improved to 320 bps bid, 310 bps offered. Hartford Financial sold the $425 million tranche of 30-year bonds at 330 bps over Treasuries.

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

Samsung unchanged

Samsung Electronics America's 1.75% notes due 2017 traded flat on Tuesday at 80 bps bid, 75 bps offered, a trader said.

"It's pretty much right where it priced," the trader said.

Samsung Electronics America sold $1 billion of the five-year notes (A1/A/) to yield Treasuries plus 80 bps on Monday.

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

Daimler Finance improves

Daimler Finance North America fixed-rate notes (A3/A-/A-) sold on Monday traded mostly better on Tuesday.

No bids were seen on the company's 1.65% notes due 2015, but the notes were offered at 110 bps, a trader said.

The $650 million tranche of three-year notes priced at a spread of 118 bps over Treasuries.

The tranche of 2.4% notes due 2017 firmed to 135 bps bid, 127 bps offered.

"There's a slight improvement off the pricing," the trader said.

Daimler Finance sold $500 million of the five-year notes at Treasuries plus 138 bps.

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

Stephanie N. Rotondo contributed to this review

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