Verizon Wireless, ING Bank, American Water sell bonds; Thursday's deals gain, Goldman in solidly

By Andrea Heisinger

New York, Jan. 30 - The week ended a bit busier than it began in the investment-grade market, with issues from Cellco Partnership d/b/a Verizon Wireless Capital LLC, ING Bank and American Water Capital Corp. pricing Friday.

The first two priced under Rule 144A and were the largest of the day.

Issues from Thursday were seen making mostly gains in the secondary, with a deal from General Mills, Inc. tightening more than 40 basis points from the pricing level.

The non-government-backed bonds from Goldman Sachs Group Inc. were seen moving in nicely Friday afternoon.

Verizon Wireless prices $4 billion

Cellco Partnership d/b/a Verizon Wireless Capital priced $4 billion in two tranches Friday under Rule 144A.

The $500 million of 5.25% three-year notes priced at 99.673 to yield 5.37%, or Treasuries plus 405 bps.

A $3.5 billion tranche of 5.55% five-year notes priced at 99.357 to yield 5.7%, or Treasuries plus 390 bps.

Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and RBS Greenwich Capital were bookrunners.

The deal priced under the Cellco name because of some outstanding bonds due 2018 that Verizon already had, a source said.

ING sells $6 billion

The banking unit of Netherlands financial name ING priced $6 billion of notes Friday in a deal that was backed by the Dutch government.

It was the first to do so in the new program, a source close to the deal said.

"I think they were encouraged by the success of other companies," he said. "It was an interesting deal."

The issue was announced Thursday but went overnight as many of the government-backed sales have done to give investors in Europe and Asia a chance to buy.

The $5 billion of 2.625% notes due 2012 priced at 99.702 to yield Treasuries plus 143.3 bps.

A second tranche of $1 billion floating-rate notes due 2012 priced at par to yield three-month Libor plus 100 bps.

Both tranches priced under Rule 144A.

Citigroup, HSBC Securities and J.P. Morgan Securities were bookrunners.

American Water prices delayed deal

American Water Capital priced $75 million of 8.25% senior monthly notes two weeks after it was announced in a Securities and Exchange Commission filing.

Edward D. Jones & Co. LP was bookrunner.

There was no word on why the issue took so long to price.

AT&T gives bond terms

AT&T Inc. gave terms Friday for its $5.5 billion issue of notes in three tranches that priced late Thursday.

A $1 billion tranche of 4.85% five-year notes priced at 99.994 to yield Treasuries plus 300 bps.

The $2.25 billion of 5.8% 10-year notes priced at 99.689 with a spread of Treasuries plus 300 bps.

The final tranche was $2.25 billion of 6.55% 30-year notes priced at 99.437 to yield Treasuries plus 300 bps.

All of the notes priced at the tight end of price talk, which was in the low 300 bps area, a source close to the deal said.

Bookrunners were Banc of America Securities LLC, Goldman Sachs & Co., J.P. Morgan Securities Inc. and Citigroup Global Markets.

Coming week seen busy

The coming week is seen having about the same amount of issuance as this week, a syndicate source said.

This week was a little more toned down than anticipated, he said. There were about $38 billion of bonds sold this week.

"At the beginning of the week we had a busy calendar," the source said. "There were a couple of spontaneous deals taking advantage of market conditions after some things [president Barack] Obama did."

The coming week may see about the same amount of issuance, but from more issuers pricing smaller deals.

"The calendar is not as large," he said.

None of Thursday's deals were under $1 billion, adding a large chunk to the week's total.

General Mills bonds in sharply

The 5.65% bonds due 2019 from General Mills were seen more than 40 bps tighter Friday afternoon, a trader said, from their pricing level of 287.5 bps over Treasuries.

The bonds were at 256 bps bid, 253 bps offered, although the trader said "I saw them as low as 235 last night."

Hess tranches trade well

The 7% notes due 2014 from Hess Corp. were seen in 40 bps to 50 bps from their 530 bps pricing level.

The bonds were at 490 bps bid, 480 bps offered, a trader said.

The 8.125% bonds due 2019 fared better at 495 bps bid, 490 bps offered from pricing at 540 bps.

Conoco tighter to unchanged

The three tranches of notes from ConocoPhillips were tighter than their 295 bps pricing, but to varying degrees, a trader said.

The 4.75% notes due 2014 tightened the most, about 20 bps tighter to 274 bps bid, 270 bps.

The 5.75% bonds due 2019 were at 294 bps bid, 288 bps offered.

The 6.5% notes due 2039 performed similarly at 293 bps bid, 289 bps offered.

AT&T shift slightly

After a late-day pricing Thursday, the three tranches of the AT&T Inc. deal moved only slightly in trading, a secondary source said.

They all priced at 300 bps over Treasuries.

The 4.85% notes due 2014 were at 296 bps bid, 294 bps offered.

A tranche of 5.8% bonds due 2018 were at 297 bps bid, 293 bps offered, and the 6.55% bonds due 2039 were at 295 bps bid, 290 bps offered.

Goldman performs nicely

The Goldman Sachs bonds that made waves Thursday by not pricing under the FDIC umbrella, and then became a test case in trading, were seen doing well Friday afternoon.

A trader said the 7.5% bonds due 2019 were at 478 bps bid, 475 bps offered, in about 25 bps from the 500 bps pricing level.

New Verizon tranche tightens

One tranche of the new Cellco d/b/a Verizon Wireless deal was seen active in the secondary Friday after pricing.

The 5.55% notes due 2014 priced at Treasuries plus 390 bps, and were trading at 380 bps offered, a source said.

Trading levels were not seen for the 5.25% bonds due 2012, he said.

Secondary remains active

The secondary was busy Friday with activity from the week's deals keeping everyone busy, a source said.

"We've been pretty busy all week," he said, "just because of all the new stuff coming in."

AT&T, B of A lead trading

Two outstanding bonds from AT&T were at or near the top of the day's most actives by early Friday afternoon.

A 5.6% bond due 2018 and a 5.5% bond due 2018 from the telecom name were seen topping the list, a day after the company successfully sold a $5.5 billion deal.

Also near the top was a 5.65% note due 2018 from Bank of America NA.

The bank remains in the headlines with its financial and personnel shifts.

Weyerhaeuser, Citi top movers

An issue of 5.3% bonds due 2016 from Citigroup Inc. was seen as one of the day's big movers, widening more than 60 bps. The bank continues to take flak over its spending.

Also seen moving significantly late Friday was Weyerhaeuser Co. The company's 6.75% bonds due 2012 tightened more than 63 bps.

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