Boeing, Morgan Stanley, AMB, Vodafone bring deals; Morgan Stanley trades firmly; spreads ease

By Andrea Heisinger and Paul Deckelman

New York, Nov. 17 - Boeing Co., Morgan Stanley, AMB Property, LP, Scana Corp., Idaho Power Co., Total Capital, European Investment Bank, US Bancorp, Private Export Funding Corp. and Vodafone Group plc all sold bonds on Tuesday as volume showed no signs of decreasing in the investment-grade primary market.

United Air Lines, Inc. also announced terms for its split-rated class A and B pass-through certificates that priced late the previous day.

An upcoming sale of 10-year senior notes was announced by HRPT Properties Trust, with pricing expected on Wednesday.

Boeing priced one of the largest deals of the day, totaling $1.2 billion in two tranches. The notes each priced in line with, or better than guidance.

AMB Property also sold two tranches of senior unsecured notes, which totaled $500 million. This sale was done late in the day.

A $500 million sale of six-year notes came from London-based Vodafone Group. That deal was also done late.

The largest offering came from Morgan Stanley, which priced $2 billion in five-year notes. They were accompanied in the financial sector by US Bancorp, which priced $500 million in five-year notes.

EIB sold $1 billion of seven-year notes early in the Rule 144A private placement market.

One of the smallest sales was a $130 million deal of first mortgage bonds due in 2020 from Idaho Power.

There was a reopening of six-year notes from Total Capital, a branch of French oil and gas company Total SA. It added $300 million.

Two deals held over from the previous day were also priced.

Electric and natural gas utility Scana priced $150 million of enhanced junior subordinated notes due in 2065. That size was increased slightly.

Pefco priced $300 million of 12-year global notes late in the day.

Issuance is not set to die down, at least not in the coming day.

"I'm not sure beyond that," a syndicate source said. "I'd be surprised if it's dead any day [this week]."

Among the established issues in the secondary arena on Tuesday, a market source said the CDX Series 13 North American high-grade index was 1 basis point wider, moving to a mid bid-asked spread level of 100 bps, after having held steady at 99 on Monday.

Advancing issues continued to lead decliners, by around an 11-to-eight ratio.

Overall market activity, reflected in dollar-volume totals, rose by 23% from Monday's pace.

Spreads in general were seen a little wider, in line with modest tightening in Treasury yields; for instance, the yield on the benchmark 10-year government note pushed downward by 2 bps Tuesday to 3.34%

The big new Morgan Stanley deal was seen to have tightened modestly from the spread over comparable Treasuries at which the bonds had been issued.

Boeing sells at guidance

Aerospace company Boeing priced $1.2 billion of senior unsecured notes in two tranches by early afternoon.

The $700 million tranche of 1.875% three-year notes priced at a spread of Treasuries plus 80 bps. This was tighter than initial talk of 85 bps, a source said.

A $500 million tranche of 3.75% seven-year notes priced at 115 bps over Treasuries. The tranche priced in line with guidance.

Barclays Capital, Citigroup Global Markets and RBS Securities were tapped as active bookrunners for the Chicago-based issuer.

Proceeds are going for general corporate purposes.

AMB prices two tranches

Industrial property manager and developer AMB Property priced $500 million of senior unsecured notes in two tranches late in the day.

The $250 million of 6.125% seven-year notes priced at a spread of Treasuries plus 337.5 bps, as did the $250 million of 6.625% 10-year notes.

The notes are guaranteed by San Francisco-based parent company AMB Property Corp.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities and Morgan Stanley.

Proceeds will be used to pay the purchase price and interest for 2013 and 2011 notes tendered. The company also may repay borrowings under a $230 million term loan due in 2010 and reduce a $500 million unsecured revolving credit facility.

Morgan Stanley offers $2 billion

Morgan Stanley priced $2 billion of 4.2% five-year notes at 205 bps over Treasuries.

Morgan Stanley ran the books.

The financial services company is based in New York City.

Volume decrease not seen

Despite the heavy volume of deals already priced in the first two days of the week, there isn't much talk of a reprieve until the coming week.

A market source called Tuesday's tone "all right," and said not much had changed since the previous day.

The source also didn't give any indication of the flow of new deals letting up on Wednesday.

"It's not looking like it," he said, adding "I'll believe it when I see it," about a possible quieting of the primary.

A source at a different desk said that they had "not much volume left" for the remainder of the week.

Issuers have crowded into the market in the past week, trying to raise funds ahead of Thanksgiving.

A neutral market has aided in that goal.

"We should see more [on Wednesday]," the second source said. "You know there's more supply."

Total reopens six-year notes

Oil and gas company Total SA subsidiary Total Capital reopened its issue of 3.125% notes due 2015 to add $300 million, an informed source said.

The notes priced at a spread of 75 bps over Treasuries.

Total issuance is $1.3 billion, including $1 billion issued on Oct. 2.

Goldman Sachs & Co. and HSBC Securities were bookrunners.

The deal is guaranteed by parent company Total SA, which is based in Courbevoie, France.

Vodafone prices $500 million

Vodafone Group sold $500 million of 3.375% six-year senior unsecured notes late in the day at Treasuries plus 135 bps.

The deal priced in line with guidance.

Deutsche Bank Securities, Goldman Sachs & Co. and Morgan Stanley ran the books for the London-based phone company.

Idaho Power sells mortgage bonds

Idaho Power sold $130 million of 4.5% first mortgage bonds due in 2020 early in the day at 120 bps over Treasuries.

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

The electric subsidiary of Idacorp, Inc. is based in Boise, Idaho.

Scana prices $150 million early

Electric and natural gas utility company Scana priced $150 million of 7.7% enhanced junior subordinated notes early in the day at par of $25, according to an FWP filing with the Securities and Exchange Commission.

The deal was announced on Monday, with the size initially at $100 million, a market source said that day.

The notes are initially due in 2065, but can be extended to 2080 if they are not redeemed between Jan. 30, 2015 and Oct. 30, 2019.

Bookrunners were Bank of America Merrill Lynch, Morgan Stanley and Wells Fargo Securities.

Proceeds will be used to provide funds to subsidiary South Carolina Electric & Gas Co. to redeem outstanding shares of that company's preferred stock and for general corporate purposes.

US Bank sells $500 million

Minneapolis-based financial services company US Bancorp priced $500 million of 2.875% five-year notes at Treasuries plus 80 bps, a source away from the sale said.

Bookrunners were Barclays Capital and UBS Securities.

EIB sells notes via Rule 144A

European Union lender, European Investment Bank, priced $1 billion of 3.125% seven-year notes at 85 bps over Treasuries via Rule 144A, an informed source said.

Barclays Capital, J.P. Morgan Securities and Morgan Stanley ran the books.

The issuer is based in Kirchberg, Luxembourg.

Pefco sells $300 million

Private Export Funding sold $300 million of 4.3% 12-year notes at Treasuries plus 105 bps, an informed source said.

The sale was announced on Monday and went overnight, with Bank of America Merrill Lynch and Citigroup Global Markets on the books.

The company assists with financing U.S. exports through private capital and is based in New York City.

United prices split-rated pass throughs

United Air Lines, Inc. sold $810.337 million in split-rated class A and B pass-through certificates, according to an FWP filing with the Securities and Exchange Commission.

The enhanced equipment trust certificates sale was done off the high-grade syndicate desk.

A $697.731 million issue of 9.75% class A certificates (Ba1/BBB) due 2017 priced at par to yield 9.75%. They have a make-whole spread of 75 bps over Treasuries.

The junk-rated $112.606 million of 12% Class B certificates (B1/BB) priced at par to yield 12%. They also have a make-whole spread of 75 bps.

The certificates are guaranteed by UAL Corp.

J.P. Morgan Securities, Morgan Stanley and Goldman Sachs & Co. were bookrunners.

Proceeds will be held in escrow to acquire equipment notes to buy aircraft.

The holding company for commercial airline United is based in Chicago.

New Morgan Stanley deal tightens

A trader said that Morgan Stanley's new $2 billion note issue was one of the main features of the day on the secondary side.

He quoted the New York-based investment banking giant's 4.20% notes due 2014 as having come in to a context of 200 bps bid, 196 bps offered, with a lock at 198 bps.

That contrasts with the 205 bps level at which the issue had priced earlier in the session.

U.S. Bancorp little changed

The trader also said that U.S. Bancorp 2.875% medium-term notes due 2014 were little changed from their pricing level, guesstimating them at a spread of 79.5 bps or 78.3 bps, adding "it's no fun at all."

The company had priced its $500 million offering of the notes earlier in the session at 80 bps over.

Vodafone tightens ahead of deal . . .

The news that Vodafone was bringing a new $500 million deal to market didn't seem to have much negative effect on the British wireless company's existing bonds.

A market source quoted Vodafone's outstanding 5.45% notes due 2019 as having tightened about 5 or 6 bps on the session to the 135 bps over area.

Another source saw the company's 5.625% notes due 2017 having tightened better than 10 bps on the session to about the 95 level, ahead of the deal.

... but Boeing widens out

The same could not be said for the bonds of Boeing Co., which priced a $1.2 billion two-part offering on Tuesday.

Ahead of that deal, the giant aircraft manufacturer's 5% notes due 2014 were being quoted as much as 20 bps wider on the session, around the 65 bops over mark.

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