HSBC, National Retail sell as Greece austerity vote looms; Nokia 15 bps better; telecoms firm

By Andrea Heisinger and Cristal Cody

New York, June 28 - Rioting leading up to a vote on austerity measures in Greece on Tuesday left the primary side of the high-grade market with a small amount of bond sales.

National Retail Properties, Inc. priced an upsized $300 million of 10-year notes. The deal size was increased from $250 million.

HSBC Bank plc brought a sale of three-year covered bonds totaling $1.25 billion. The bonds were priced under Rule 144A.

The tone of the primary took a beating on Monday as investors remained wary of investment-grade paper - although four new corporate deals got done, including a $3 billion sale from Amgen, Inc.

There wasn't much difference in the market by the close on Tuesday, a source who worked on one of the day's sales said.

"It's pretty much the same as yesterday," he said. There is little-to-no new issuance expected on Wednesday or Thursday as austerity votes are taken by parliament in Greece.

"The rest of the week is going to be pretty dull," a market source said. "Everyone's just waiting to see [what happens]."

Overall trading volume jumped 40% to more than $13 billion, and spreads were tighter, but trading overall seemed slow, traders said.

"Slow day for me, very slow," one trader said.

The Markit CDX Series 15 North American Investment Grade index firmed 2 basis points to a spread of 98 bps, according to Markit Group Ltd.

No secondary market activity was immediately seen in HSBC Bank's new notes. National Retail's new notes traded 3 bps tighter.

Amgen's new notes firmed in secondary trading, according to a source. Kilroy Realty LP's notes firmed 2 bps also in trading.

Carpenter Technology Corp.'s notes due 2021 widened on the bid side, a trader said Tuesday.

"It's been very quiet. It's all tighter, but there hasn't been a ton of activity going through," the trader said.

Nokia Corp.'s bonds were among the more active of the day and firmed 15 bps in the secondary market, a trader said.

Dallas-based AT&T, Inc.'s 5.35% bonds due 2040 closed the day 5 bps better at 145 bps bid, 140 bps offered.

"The whole telecom sector is 2 to 5 better," the trader said. "Sprint [Nextel Corp.]'s bonds have been lagging a little bit. They're up maybe a eighth to a quarter."

Treasuries fell as investors left safer-haven debt. The yield on the 10-year benchmark note climbed to 3.30% from 2.93%. The 30-year bond yield rose 3 bps to 4.32%.

National Retail upsizes

National Retail Properties sold an upsized $300 million of 5.5% 10-year senior notes (Baa2/BBB/BBB) to yield 265 bps over Treasuries, an informed source said.

The deal size was increased from $250 million. The notes were priced in line with talk in the 265 bps area.

Bank of America Merrill Lynch and Wells Fargo Securities LLC ran the books.

Proceeds are being used to repay borrowings under a credit facility, to fund future property acquisitions and for general corporate purposes.

In the secondary market, the new notes traded at 262 bps bid, a trader said.

The real estate investment trust for retail properties is based in Orlando.

HSBC Bank's covered bonds

HSBC Bank sold $1.25 billion of 1.625% three-year covered bonds in the Rule 144A market, a source close to the sale said.

The notes (Aaa/AAA) were priced at mid-swaps plus 58 bps.

The bookrunners were BNP Paribas Securities Corp., HSBC Securities (USA) Inc., RBS Securities Inc. and Societe Generale.

The financial services company is based in London.

Amgen tighter

Amgen's three tranches priced on Monday traded tighter on Tuesday, a source said.

The $750 million of 2.3% notes due 2016, which priced at a spread of Treasuries plus 90 bps, firmed to 85 bps bid, 83 bps offered.

A second tranche of $1 billion of 4.1% 10-year notes priced at a spread of 120 bps over Treasuries. The notes traded tighter on Tuesday at 116 bps bid, 114 bps offered.

The last tranche the company sold, $1.25 billion of 5.65% notes due 2042 at Treasuries plus 140 bps, also firmed to 136 bps bid, 134 bps offered.

The issuer is based in Thousand Oaks, Calif.

Kilroy firms

Kilroy Realty's new notes firmed to 263 bps bid, 261 bps offered in the secondary market on Tuesday, a trader said.

The company priced an upsized $325 million of 4.8% seven-year notes (Baa3/BBB-) at a spread of 265 bps over Treasuries on Monday.

The deal is guaranteed by parent company and real estate investment trust Kilroy Realty Corp., which is based in Los Angeles.

Carpenter mixed

Carpenter Technology's new debt widened on the bid side in trading, a trader said.

The company sold $250 million of 5.2% 10-year senior notes (Baa3/BBB) to yield 230 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission. The notes were seen in the secondary at 235 bps bid, 230 bps offered.

The developer, manufacturer and distributor of stainless steel and alloy metals is based in Reading, Pa.

Nokia narrows

Nokia's bonds tightened about 15 bps across the curve in the secondary market on Tuesday, a trader said.

"Nokia bonds are really active today."

The 5.375% notes due 2019 were seen closing 15 bps better at 290 bps bid, 280 bps offered. On June 17, the notes were quoted at 303 bps bid, 298 bps offered.

The bonds due 2039 also firmed 15 bps to 285 bps bid, 275 bps offered on Tuesday, the trader said.

Nokia's bonds widened after Fitch downgraded the company two notches to BBB- from BBB+ earlier this month.

The mobile phone manufacturer and internet services provider is based in Espoo, Finland.

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