World Bank, Newell Rubbermaid, Sunoco, Berkshire Hathaway sell bonds; spread widen; John Deere gains

By Andrea Heisinger and Paul Deckelman

New York, March 26 - The primary market was busy, but didn't have much for standout issues Thursday as World Bank was the only one to crack $1 billion. Also pricing were Newell Rubbermaid Inc., Sunoco, Inc. and Berkshire Hathaway.

A deal from Australia's ANZ also priced late in the day, a market source said.

In the secondary sphere on Thursday, a market source said the widely followed CDX Series 12 North American high-grade index was tighter on the day at a mid bid-asked spread level of 179 basis points, versus 182 bps on Wednesday.

Advancing issues moved back ahead of decliners, by a nearly three-to-two ratio.

Overall market activity, reflected in dollar volumes, was marginally up from the levels seen on Tuesday.

Spreads in general were seen a little wider, in line with lower Treasury yields; for instance, the yield on the benchmark 10-year note fell by 5 bps to 2.74%.

The new Newell Rubbermaid bonds, after pricing at a discount to par, were seen having firmed by several points.

Tightening was also seen in the John Deere Capital Corp. issue which came to market on Wednesday

And some of last week's Pfizer Inc. bonds remain at or near the top of the most-actives list.

Berkshire unit sells bonds

A financing arm of Berkshire Hathaway priced an upsized $750 million of 4% three-year notes at Treasuries plus 282 bps.

The size was increased from $400 million, a source close to the deal said.

Price talk was in the 285 bps area, he said, with the issue coming in at the tight end of that.

The deal for the Omaha, Neb.-based holding company was priced via Rule 144A.

Bookrunners were Goldman Sachs & Co. and Morgan Stanley.

Sunoco prices six-year

Petroleum refining and chemical manufacturing company Sunoco sold $250 million of 9.625% six-year senior unsecured notes at Treasuries plus 800 bps.

The proceeds are going to repay short-term borrowings and for other general corporate purposes.

The Philadelphia-based company tapped Barclays Capital, Credit Suisse Securities and J.P. Morgan Securities as bookrunners.

Newell Rubbermaid sells 10-year

Consumer and commercial products company Newell Rubbermaid priced $300 million 10.6% 10-year notes to yield 11%. The spread was Treasuries plus 825.4 bps.

Proceeds are going for general corporate purposes including repayment of debt.

J.P. Morgan Securities was active bookrunner.

World Bank prices $6 billion

The World Bank priced $6 billion of 2% three-year global notes at Treasuries plus 82.2 bps, a source close to the deal said.

Books have been open for the deal since Tuesday when it was announced.

Citigroup Global Markets, HSBC Securities, J.P. Morgan Securities and RBS Greenwich Capital ran the books for the lender to developing countries. It is based in Washington, D.C.

JPMorgan gives FDIC deal terms

JPMorgan Chase & Co. released terms for its Federal Deposit Insurance Corp.-backed deal priced late Wednesday.

The $2.1 billion sale of two-year floaters priced at par to yield three-month Libor plus 13 bps.

The financial services company is using proceeds for various purposes including repaying debt, investments in subsidiaries, financing possible acquisitions, business expansion or redemption of securities.

J.P. Morgan Securities was bookrunner for the New York City-based company.

ANZ sells $1 billion

A market source said late Thursday that Australia's ANZ bank had priced $1 billion of bonds. No further information was available at press time.

The company, also known as Australia New Zealand Banking Group Ltd., is based in Melbourne, Australia.

Pace not set to slow

As financial names continue to make use of the FDIC's Temporary Liquidity Guarantee Program, it is not likely that issuance will slow any time soon, a source said Thursday.

"It's either going to be this or a bunch of regular companies," he said. "A lot of the high-quality names already did their [deals]."

Two of Thursday's deals from industrial issuers were triple-B rated and priced at yields rather than to a spread, as is standard practice in the investment-grade market.

Deals yet to come

Issuance for the week may not be over, a syndicate source said.

"I think there's not a lot left, but there should be one or two things coming out tomorrow," he said. "Fridays have not been dead for a while."

There aren't any upcoming sales announced, he said, but that has been the trend for months.

"No one will decide until tomorrow morning," he said.

Newell trades up

When the new Newell Rubbermaid 10.60% notes due 2019 were freed for secondary dealings, a trader quoted them trading at 100.5 bid, 100.75 offered.

That was well up from the 97.592 price at which the bonds came to market, in order to yield 11%. The upsized $300 million of bonds priced at a spread over comparable Treasuries of 825.4 basis points.

The trader meantime said he had not seen any dealings in Sunoco's new 9.625% notes due 2015, $250 million of which priced at 800 bps over.

Deere drives higher

The trader said that the new John Deere Capital Corp. 5.25% notes due 2012 were trading at 384 bps bid, 380 bps offered.

That was in from the 400 bps over level at which the financing arm of the Moline, Ill.-based tractor manufacturer priced its $750 million issue on Wednesday.

Idaho Power bonds little changed

Another Wednesday deal, Idaho Power Co.'s $100 million offering of 6.15% notes due 2019, were quoted Thursday bid at 340 bps over, with no offered levels seen. The utility priced that deal at 340 bps over.

New Staples stays strong

Tuesday's Staples Inc. 7¾% notes due 2011 were being quoted Thursday at 553 bps over. Those bonds had firmed some 130 bps from the 683.4 bps level at which the Framingham, Mass.-based office products retailer priced that $500 million. On a dollar-price basis, the new bonds were seen having firmed to 104.218 bid from 101.875 bid, 102.25 offered on Wednesday and from par at their pricing. Over $20 million of the bonds traded on Thursday.

Time Warner Cable tightens

Another recent deal trading tighter was Time Warner Cable Inc.'s 8.25% notes due 2019, at just over 500 bps over -- in by nearly 70 bps from the 570 bps over level at which the New York-based cable operator priced its $2 million of bonds on Monday, as part of its two-part, $3 billion offering. Some $50 million of the bonds traded on Thursday.

Pfizer remains popular

Even though it came to market last week, New York-based drugmaker Pfizer's multi-tranche mega-deal continued to trade actively in Thursday's secondary market.

A market source saw its 4.45% notes due 2012 having tightened markedly to 202 bps over, well in from the 229 bps level seen on Wednesday, with super-heavy dealings of over $90 million recorded by mid-afternoon.

Those bonds have now tightened over 100 bps from the 305 bps over level at which the company had priced the $3.5 billion issue on March 17, as part of its near-record-setting $13.5 billion, five-part bond sale.

The source also saw Pfizer's 6.20% notes due 2019 trading at 260 bps over, some 30 bps in from the levels those bonds held earlier in the week, and again, well in from the 325 bps over level at which the company had priced the $3.25 billion of 10-year as part of that mega-deal. Over $50 million of the '19s had changed hands by mid-afternoon.

He also saw the new 5.35% notes due 2015 at 249 bps over, little changed from Wednesday's level, with over $26 million traded. Those bonds too had firmed markedly from the 340 bps over level at which the company priced the $3 billion of bonds as part of that five-part mega-deal. Almost $25 million had traded by mid-afternoon.

Financial bonds seen easier

Among the financial names, JP Morgan Chase & Co. Inc.'s 6.625% notes due 2012 were seen having widened out by around 40 bps to the 580 bps level.

Morgan Stanley Inc.'s 4.75% notes due 2014 were about 40 bps wider at the 800 bps over mark.

Financial CDS seen mixed

A trader who watches the credit-default swaps market saw the cost of protecting holders of big-bank paper against a possible event of default 5 bps wider across the board, and saw a similar rise in CDS costs for investment-bank bonds as well.

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