BNP Paribas closes out busy week of new deals; Archer Daniels, Verizon, Sanofi-aventis firmer

By Andrea Heisinger and Cristal Cody

New York, April 1 - BNP Paribas reopened an issue of floating-rate notes on Friday as a hectic week in the primary ended on a quiet note.

The Paris-based bank added $1.25 billion to its issue of floaters due in January 2014. The new deal priced in line with guidance and brings the issue's total outstanding to $2.25 billion.

A market source said that the coming week "should slow down" as companies enter earnings blackout. This could mean more foreign issuers such as BNP in the market.

Also, heavy issuance in the past two weeks could mean that companies won't need to enter the market to borrow further.

"I mean market conditions are good now but I don't know how much opportunistic [issuance] we'll see," the source said.

A syndicate source made the prediction of "the usual" $15 billion for the coming week's sales.

If the good market tone holds over the weekend, it is likely there could be 'at least a couple" of sales on Monday, the source said.

In trading Friday, overall investment-grade Trace volume dropped 20% to about $10.3 billion, according to a market source.

Secondary market trading was quiet throughout the day, sources said.

"Very slow," one commented.

Telecom bonds traded about 2 bps to 3 bps better, while the oil and gas sector firmed about 2 bps overall, a trader said.

Financials were "mixed" with bonds plus or minus 2 bps, a trader said.

Activity in the new paper from Archer Daniels Midland Co., Verizon Communications, Inc. and Sanofi-aventis SA stayed strong on Friday, according to sources.

Verizon Communications' short tranches priced on March 23 were firmer by 10 bps to 20 bps in trading, while the 30-year bonds widened.

Sanofi-aventis' new paper (A2/AA-) sold on March 22 was mostly stronger in the secondary market, a trader said.

Treasuries ended Friday higher across the curve, sending yields down, after new comments that supported the government's quantitative easing program, dubbed QE2.

The 10-year benchmark Treasury note yield fell 2 bps to 3.44%, while the 30-year bond yield dropped 3 bps to 4.48%.

BNP reopens floaters

BNP Paribas reopened its issue of floating-rate notes due 2014 on Friday to add $1.25 billion, a market source away from the sale said.

The notes (Aa2/AA) priced at 100.2218 with a coupon of three-month Libor plus 90 basis points to yield Libor plus 82 bps. This was directly in line with price talk, the source said.

Total issuance is $2.25 billion including $1 billion priced on Jan. 5 at Libor plus 90 bps.

BNP Paribas Securities Corp. was bookrunner.

Proceeds are being used for general corporate purposes.

The banking group is based in Paris.

Archer Daniels tightens

Archer Daniels Midland's two tranches of debentures sold on Wednesday have stayed stronger in the secondary market, a trader said Friday.

The company sold two tranches of debentures (A2/A/A) on Wednesday, including 10-year notes and 30-year bonds.

The 4.479% 10-year notes, which priced at a spread of 95 bps over Treasuries, firmed to 83 bps bid, 82 bps offered on Friday, the trader said.

The 30-year bonds priced at 120 bps over Treasuries.

"They've moved in about 20 basis points," the trader said. "Definitely priced too cheap."

The Decatur, Ill.-based crop processor priced $1 billion of 5.765% 30-year bonds at 120 bps over Treasuries.

Verizon short notes firm

Verizon's recent mega bond deal (A3/A-/A) was stronger in trading on the short-dated notes, a trader said.

The 4.6% notes due 2021, which priced at 135 bps over Treasuries, traded at a spread of 119 bps, the source said.

The tranche of 2% notes due 2016 also traded tighter at 88 bps bid, 85 bps offered from where they priced at a spread of 105 bps over Treasuries.

The 4.6% notes due 2021, which priced at 135 bps over Treasuries, narrowed to 114 bps bid, 110 bps offered, the source said.

Verizon's longer dated bonds widened in trading Friday. The tranche of 6% 30-year bonds moved out to 144 bps bid, 140 bps offered, but that was still tighter than the original pricing level of 165 bps over Treasuries.

The broadband and telecommunications company is based in New York City.

Sanofi-aventis stronger

The three- and five-year notes that Sanofi-aventis priced tightened in the secondary market, while the tranche of 10-year notes was flat, a trader said Friday.

The 1.625% notes due 2014 sold at Treasuries plus 55 bps and firmed to 43 bps bid, 39 bps offered on Friday, a trader said.

The tranche of 2.625% notes due 2016 priced a spread of 70 bps over Treasuries and traded Friday at 65 bps bid, 61 bps offered.

The last tranche of 4% fixed-rate notes due 2021 were flat in trading at 80 bps bid, 78 bps offered. The notes priced at a spread of Treasuries plus 80 bps.

The pharmaceutical company is based in Paris.

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