Boston Properties, Avery Dennison, Worthington price deals; Avery, Worthington up in trading

By Andrea Heisinger and Cristal Cody

New York, April 8 - Boston Properties LP, Avery Dennison Corp. and Worthington Industries Inc. each priced small issues of bonds on Thursday

Office product company Avery Dennison sold $250 million of 10-year notes, with the size staying at the level announced in the morning.

This was followed by a sale of $150 million in 10-year notes from Worthington Industries. The sale also priced at the size that was announced in a filing with the Securities and Exchange Commission in the morning.

The last deal to price came from Boston Properties, and it was also the largest at $700 million in 10-year notes.

Market tone may have suffered after an "only decent" auction of 30-year Treasury bonds. This continued a trend that started earlier in the week with another Treasury auction of shorter-dated bonds scaring some issuers and investors away.

The sleepy tone set at the start of the week isn't expected to change much on Friday, sources said, but the coming week is fair game as people come back from vacations.

"We could see things pick up [next week]," one market source said. "I know we have a couple of possible [deals]."

The new offerings from Worthington Industries and Avery Dennison firmed in secondary trading, while Boston Properties' new notes moved out on the bid, according to sources.

Meanwhile, the overall investment-grade market was mixed.

"Spreads started wider - probably on Greece fears," a source said Thursday. "Markets calmed a bit after comments by [European Central Bank president Jean-Claude] Trichet on Greece and spreads came in a bit."

U.S. Treasuries also were seen weaker on Thursday.

The yield on the 10-year benchmark Treasury note moved out 2 bps to 3.89%, and the yield on the 30-year Treasury bond eased 1 bp to 4.75%.

Elsewhere, the CDX Series 14 North American high-grade index was unchanged at a mid bid-asked spread level of 87 bps, according to a source.

Thursday's high-grade trading volume was "so-so," one trader said.

Overall Trace volume fell 10% to about $11 billion, according to a source.

Avery Dennison sells 10-year notes

Avery Dennison priced $250 million of 5.375% 10-year senior unsecured notes (Baa2/BBB) by early afternoon to yield Treasuries plus 150 bps, a market source away from the deal said.

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

Proceeds are being used to repay a portion of debt under a term loan credit facility of a subsidiary.

The office products and branding company is based in Pasadena, Calif.

Worthington offers $150 million

Worthington Industries sold $150 million in 6.5% 10-year senior unsecured notes (Baa2/BBB) to yield Treasuries plus 262.5 bps, a source close to the sale said.

There no price talk for the deal, the source said, adding that it "went directly to a launch."

The size also did not change, he said, because the company knew exactly how much they wanted to get done. "We knew we weren't going to grow it at all," he said. "It priced where we wanted it to."

The company last issued bonds in 2004, the source said.

Credit Suisse Securities and Wells Fargo Securities were bookrunners.

Proceeds are going to repay borrowings under a revolving credit facility and under a revolving trade accounts receivable securitization facility.

The metal processing company is based in Columbus, Ohio.

Market tone holds following uncertainty

Treasury auctions over the past three days have seen mixed reactions in the high-grade bond market, sources said.

As a three-year note auction was set to take place on Tuesday, some issuers were scared away by fears it would go as badly as those a couple of weeks before. By Thursday, when a 30-year bond auction took place, the auctions had been relative successes and had allayed fears.

"It was a little heavy this morning," a source said, referring to the tone. The 30-year auction "went really well," he said, and issuers stepped up.

"We still had supply."

The day's three sales followed the previous day's six.

A market source said he wasn't sure what was on tap for the coming week, but that it appeared to be "light" in issuance.

Boston Properties prices $700 million

Boston Properties LP sold $700 million of 5.625% senior unsecured notes (Baa2/A-/BBB) due in 2020 late in the day at Treasuries plus 175 bps, a source away from the sale said.

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

Proceeds are going for general corporate purposes, including investments and debt reduction.

The real estate investment trust for office properties is based in Boston.

Avery Dennison better

Avery Dennison's new 5.375% notes due 2020, which priced at Treasuries plus 150 bps, firmed immediately in the secondary, according to traders.

The notes were seen at 144 bps bid, 141 bps offered after the market closed.

In addition, one trader "saw the AVYs offered at 140 bps and an earlier quote of 150 bps bid, 140 bps offered."

Worthington firms

Meanwhile on Thursday, Worthington Industries' notes due 2020 firmed in secondary trading, a source said.

The notes priced at Treasuries plus 262.5 bps and were seen late in the day at 250 bps offered.

Boston Properties

Also in the secondary, Boston Properties' new 5.625% notes due 2020 were seen wider on the bid, traders said.

The notes priced at Treasuries plus 175 bps.

In late trading, the notes were quoted at 177 bps bid, 171 bps offered.

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