Textron, CenturyLink, DirecTV offer notes, three sales announced, new deals better in trading

By Andrea Heisinger

New York, Sept. 14 - Textron, Inc., CenturyLink and DirecTV Holdings and DirecTV Financing sold bonds on a fruitful Monday of new deals. There are several others on the agenda for the coming day.

Cenovus Energy Inc., Societe de Financement de l'Economie Francaise and Landwirtschaftliche Rentenbank each have sales held over from Monday announcements. They are all expected to price on Tuesday, sources said.

Two of the day's deals were split-rated, but run off high-grade syndicate desks. One of the biggest successes of the day was the two-tranche deal from DirecTV. The satellite TV subscription service sold $2 billion of bonds in five- and 10-year tranches. Both came tighter than talk, and the deal had about $11 billion on the books.

Textron also sold split-rated bonds in two tranches of notes due 2015 and 2019 that totaled $600 million.

CenturyLink priced two tranches consisting of 10- and 30-year notes. The sale was upsized to total $650 million.

Once freed for trading, both the Textron and the DirecTV bonds improved. Trading levels were not immediately available for CenturyLink's notes because of the lateness of pricing.

DirecTV's tranches tightened between 5 and 20 basis points, while Textron's both came in about 20 bps, a trader said.

Spreads were significantly tighter overall from the previous day as Treasury yields increased. The 10-year government note was 7 bps worse, and the 30-year bond was out 5 bps.

CenturyLink prices two tranches

Communications provider CenturyLink sold an upsized $650 million of senior notes in two tranches, an informed source said.

The $250 million of 6.15% 10-year notes priced at Treasuries plus 275 bps.

An increased $400 million tranche of 7.6% 30-year notes priced at Treasuries plus 337.5 bps. The size was initially $350 million, the informed source said.

Both tranches came in tighter than talk. In the case of the 10-year notes, that was in the 300 bps area, the source said. They launched at 275 bps.

Guidance for the 30-year notes was 350 to 362.5 bps, which the notes beat at pricing. They were launched at 337.5 bps.

"They tightened down a lot," the source said.

There was about $4 billion of interest for the sale, he said.

Bank of America Merrill Lynch, Barclays Capital, J.P. Morgan Securities and Wells Fargo Securities were bookrunners.

Proceeds will be used for general corporate purposes, including debt repayment.

The communications company is based in Monroe, La.

DirecTV sells split-rated notes

DirecTV Holdings and DirecTV Financing priced $2 billion of split-rated notes (Ba2/BBB-/BBB-) in two tranches.

They were sold off the high-grade desk.

The $1 billion of 4.75% five-year notes priced at Treasuries plus 245 bps.

A $1 billion tranche of 5.875% 10-year notes priced at Treasuries plus 255 bps.

Price talk for both tranches was initially in the "high 2[00]s," the source said. It was later brought down to the 262.5 bps area for the five-year notes, he said, and it priced at the tight end of that talk.

Guidance for the 10-year tranche was in the 275 bps area, with the notes pricing tighter than that margin.

There was about $11 billion in interest for the sale, he said, adding that it "definitely went well."

The notes were sold via Rule 144A and Regulation S.

Bookrunners were J.P. Morgan Securities, Citigroup Global Markets and Credit Suisse.

Proceeds are going for general corporate purposes, which may include the repurchase of bonds due 2013.

The broadcast satellite service is based in El Segundo, Calif.

Textron offers upsized split-rated bonds

Textron sold an upsized $600 million of split-rated senior notes (Baa3/BBB-/BB+) in two tranches, a source close to the sale said.

The size was initially $500 million, a market source said in the morning.

The $350 million of 6.2% notes due 2015 priced at a spread of Treasuries plus 387.5 bps.

The $250 million tranche of 7.25% 10-year notes also priced at Treasuries plus 387.5 bps.

Active bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities. Barclays Capital and Citigroup Global Markets were passive bookrunners.

Proceeds are going for general corporate purposes, including debt repayment and repurchase.

The multi-industry company has units including aircraft, defense and finance. It is based in Providence, R.I.

New deals to increase

The week began with a bang as Monday's deals garnered a lot of interest and generally priced at the tight end of, or tighter than, guidance.

Tuesday is expected to be as busy or perhaps more so, a syndicate source said. His desk doesn't have any deals set for the coming day, he said, but has heard of "several away."

"The way the market is in, and everything continues to grind tighter, it's great," he said.

There are at least three deals, all from issuers based in other countries, which are expected to price on Tuesday.

"It's already looking like a good week," a source said. "There's a lot of demand for good paper out there. Look at DirecTV."

Cenovus plans three-tranche sale

Cenovus Energy announced plans to sell notes privately in three tranches, according to a press release from parent company EnCana Corp.

The deal will be sold in five, 10 and 30-year tranches, a source away from the deal said. Pricing is planned for Tuesday, an informed source said.

Bank of America Merrill Lynch, Barclays Capital and RBS Securities are bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used for the acquisition of assets from parent company EnCana, to be placed in escrow.

Natural gas and oil company EnCana is based in Calgary, Alta.

SFEF plans five-year note sale

Societe de Financement de l'Economie Francaise is planning a sale of five-year notes, a market source said.

The government-backed notes are pricing Tuesday, an informed source said, to "let Asia in on the deal."

The market source said the size is expected to be "several billion."

Bookrunners for the Rule 144A notes are Bank of America Merrill Lynch, BNP Paribas Securities, Citigroup Global Markets, RBS Securities and UBS Investment Bank.

The agency finances the French banking system, and is based in France.

Rentenbank to sell short bond

Landwirtschaftliche Rentenbank is planning a sale of three-year notes backed by the German government, according to a 424B5 filing with the Securities and Exchange Commission.

The deal is expected to go overnight and price Tuesday, a source close to the sale said.

J.P. Morgan Securities, Morgan Stanley and RBC Capital Markets are running the books.

Proceeds are being used to finance lending.

The bank provides financing to the agriculture and food industry in Germany, and is based in Frankfurt.

Split-rated bonds better in trading

Two new bonds sold Monday from split-rated names were tighter once freed for trading by late afternoon, a trader in the non-financial sector said.

The two tranches from DirecTV were performing well, coming in 5 bps or more.

The 4.75% notes due 2014 were sold at 245 bps over Treasuries, and traded at 235 bps bid, 225 bps offered. This was better than the 5.875% tranche due 2019 did after selling at Treasuries plus 255 bps. Those notes came in to 250 bps bid, 242 bps offered, the trader said.

Both tranches of the Textron sale priced the same and were trading at the same level, he said.

The 6.2% notes due 2015 and 7.25% due 2019 each priced at 387.5 bps over Treasuries and were trading at 370 bps bid, 365 bps offered.

Industrials trading light

The non-financial sector of the high-grade secondary saw light volume by the market close, a trader said.

"There's not a lot going on," he said. Levels were not seen for the new CenturyLink bonds soon after pricing.

The trader compared the light volume to the previous week, thinking the coming days will follow the same trend.

"It's kind of like last week," he said. "Monday and Tuesday are slow, and then in the middle of the week it picks up."

GECC, Citi bonds trade heavily

Outstanding notes from financial names were prevalent in trading by Monday afternoon, a trader said.

This came as the one-year anniversary of the collapse of Lehman Brothers was marked.

Lehman bonds were not seen on the list of most-traded.

There was high interest in a floating-rate bond due 2014 from General Electric Capital Corp. This was followed by two bonds from Citigroup Inc.

The financial's 6.375% bond due 2014 and 8.5% bond due 2019 were both seeing a lot of investor interest. The five-year note topped trading on Friday.

Topping the list of the high-yield bond market's most actives was an outstanding 7.625% note due 2016 from DirecTV Holdings and DirecTV Financing. This was ahead of the company's split-rated sale later on Monday.

Bank, broker CDS hold steady

Bank and brokerage credit-default swaps were unchanged to 5 bps tighter, a trader said.

Campbell, Genworth bonds move

Among the biggest moving bonds of the day was one from Campbell Soup Co. The prepared foods maker saw its earnings drop 22% in the fourth quarter, it announced over the weekend.

The soup-maker's 8.875% notes due 2021 were tighter by more than 50 bps from the previous week, a source said late in the afternoon.

Bonds from insurer Genworth Financial Inc. and Genworth Global Funding Trust were two other bonds making shifts by the end of the day.

The company announced a sale of $500 million shares of common stock on Monday. Genworth Global Funding's 5.25% notes due 2012 were about 50 bps tighter. A 4.95% note due 2015 moved the other direction, widening nearly 40 bps from the week before.

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