National Rural Utilities, Sonoco, Sigma-Aldrich offer bonds; Sonoco debt firms 10 bps

By Andrea Heisinger and Cristal Cody

New York, Oct. 25 - New deals were priced in the high-grade primary on Monday by National Rural Utilities Cooperative Finance Corp., Sonoco Products Co., Sigma-Aldrich Corp. and Barclays Bank plc.

At least three of the offerings were upsized, including those by Sonoco, National Rural Utilities and Sigma-Aldrich.

National Rural Utilities increased the total size of its sale to $650 million from $500 million. The deal was made up of collateral trust bonds due in 2013 and 2015.

Sigma-Aldrich sold $300 million of 10-year notes. The size was increased from a planned $250 million that was announced in a 424B5 filing with the Securities and Exchange Commission.

Consumer and industrial packaging manufacturer Sonoco Products priced $350 million of a 30-year maturity. The size was increased by $50 million from an original $300 million.

Goldman Sachs Group Inc. announced it will price $250 million or more of 50-year bonds at $25 each. The bonds are pricing sometime in the coming week.

United Business Media Ltd. is also planning a deal. The United Kingdom-based business information company is pricing 10-year notes under Rule 144A.

It was an "old-school day" in the investment-grade market with a handful of smaller deals, a syndicate source said. This is a contrast to the previous week in which one or two large, multi-tranche sales would get done.

The market tone was "great" to start the day, a source said. There weren't many negative headlines to affect the market, although that could change overnight, he acknowledged.

There are more high-grade deals to come for the week in addition to the United Business Media and Goldman Sachs offerings. While there will be some highly rated names in the market, sales will mostly come from those in the BBB space, sources said.

"It's going to be smaller deals," a market source said.

The new debt from Sigma-Aldrich and Sonoco firmed in secondary trading, with the deal from Sonoco seen as much as 10 bps tighter, according to sources.

The Markit CDX Series 14 North American investment-grade index narrowed 5 bps to a spread of 93 bps on Monday, according to Markit Group Ltd.

Overall investment-grade Trace volume rose 14% to more than $12 billion, a source said.

U.S. Treasuries were mixed late in the day as yields turned positive following a reopening of $10 billion of five-year Treasury Inflation Protected Securities. Short-dated debt ended the day unchanged, while the longer end of the curve fell as stocks gained. The yield on the 10-year benchmark note was unchanged at 2.56%. The 30-year bond yield fell 2 bps to 3.91%.

Coming up on Tuesday, the Treasury Department will auction $35 billion of two-year notes, followed by auctions of $35 billion of five-year notes on Wednesday and $29 billion of seven-year notes on Thursday.

National Rural's $650 million

National Rural Utilities Cooperative Finance sold an upsized $650 million of collateral trust bonds (A1/A+/A) in two tranches, a source who worked on the sale said.

The size was announced at $500 million early in the day.

A $300 million tranche of 1.125% three-year bonds priced at a spread of Treasuries plus 60 bps.

The second tranche was $350 million of 1.9% five-year notes priced at 75 bps over Treasuries.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Mizuho Securities USA Inc. were active bookrunners.

Proceeds are being used for general corporate purposes, including repayment of short-term debt, which encompasses commercial paper.

The private market lender to electric cooperatives is based in Herndon, Va.

Sonoco sells 30-years

Sonoco Products Co. sold an upsized $350 million of 5.75% 30-year senior notes (Baa3/BBB-) at Treasuries plus 190 bps, an informed source said.

The size was initially $300 million and increased slightly due to demand of "north of $2 billion" on the books, a source said. The issue priced below guidance in the 200 bps area.

Bookrunners were Bank of America Merrill Lynch and Wells Fargo Securities LLC.

Proceeds are being used to purchase any tenders for outstanding notes due 2013, 5.625% notes due 2016 and/or 9.2% debentures due 2021, with any remainder used for general corporate purposes.

In the secondary market, Sonoco's bonds tightened going out, traders said.

The bonds were quoted firmer at 183 bps bid, 178 bps offered. Late afternoon, the notes firmed 3 bps on the bid side to 180 bps.

The maker of consumer and industrial packaging products is based in Hartsville, S.C.

Sigma-Aldrich upsizes 10-year

Sigma-Aldrich priced an upsized $300 million of 3.375% 10-year senior notes (A2/A) to yield 84 bps over Treasuries, a market source away from the deal said.

The deal was announced in a prospectus at $250 million in size.

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

Proceeds are being used for general corporate purposes.

Some secondary activity was seen soon after pricing, with the notes tighter on the offer side at 79 bps, a source said.

The chemical and technology company is based in St. Louis.

Goldman selling 50-years

Goldman Sachs announced a sale of 50-year notes in a 424B2 filing with the SEC.

The notes will be priced at $25 each, and the size is expected to be $250 million or more. The deal is pricing "sometime in the week," a source said.

The securities are callable on or after Nov. 2015.

Goldman Sachs & Co. is the active bookrunner.

The financial services company is based in New York City.

Barclays sells floaters

Barclays Bank priced $80 million of one-year global medium-term floating-rate notes at par to yield one-month Libor plus 50 bps, according to a 424B2 filing with the SEC.

Barclays Capital Inc. was the bookrunner.

The financial services company is based in London.

United Business plans 10-year

United Business Media is planning a sale of 10-year notes, a market source said early in the day.

The notes (Baa3/BBB-) will be sold under Rule 144A "in the next day or two," the source said.

Barclays Capital Inc., Credit Suisse Securities (USA) Inc., HSBC Securities USA Inc. and J.P. Morgan Securities LLC are bookrunners.

The business information services company is based in London and Dublin.

Bank-brokerage CDS contract

A trader saw prices for contracts protecting holders of big-bank paper unchanged on Monday to down 10 bps, with Citi showing the most improvement. Citi was down 10 bps, according to the trader.

The trader also saw brokerage house/investment bank CDS contract prices tighten 5 bps to 7 bps.

Paul Deckelman contributed to this review.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.