Eastman Chemical, Cigna, St. Jude, IDEX among deals; Citi remarkets; financials mixed

By Andrea Heisinger and Cristal Cody

New York, Dec. 1 - Eastman Chemical Co., Cigna Corp., NiSource Finance Corp., St. Jude Medical, Inc., IDEX Corp. and Texas Eastern Transmission LP all sold bonds in the high-grade market on Wednesday as the decent market tone held.

Citigroup Inc. also priced some notes in a remarketing of a previous offering.

Cardiovascular device maker St. Jude Medical was one of the first to sell its bonds in a $500 million deal of five-year notes. The bonds were priced at the tight end of talk.

Eastman Chemical also priced $500 million, but split evenly between two tranches. The notes have maturities of five and 10 years.

Spectra Energy subsidiary Texas Eastern Transmission priced $300 million of 10-year notes under Rule 144A.

The trend of smaller sales continued, with Cigna pricing $250 million of 10-year notes. Also pricing $250 million was NiSource Finance. The deal of 30-year bonds was guaranteed by parent company NiSource Inc.

Industrial pump and dispenser company IDEX sold $300 million of 10-year notes, in part to repay debt under a bank revolver.

Citigroup did a remarketing of junior subordinated notes and sold $1.875 billion of five-year notes.

Thursday should have some issuance, "but nothing too major," one market source said. "I don't think we're going to see any multi-billion dollar deals."

By day's end, much of the gloom from the previous week had lifted and left more potential issuers confident about pricing in the market, the source said.

"It definitely felt better out there," a syndicate source said. "I think people looked at Portugal as better." The country conducted a successful sale of bonds earlier this week.

Anyone wanting to do issue this week will likely jump into the market on Thursday, the source added. There is more economic data coming out on Friday, including payroll reports, and that usually pushes issuers out of the market, he said.

Corporate bonds were mostly unchanged by the end of the day in secondary trading, according to sources.

New debt from Eastman Chemical and St. Jude Medical firmed in the secondary market, while the financial sector closed slightly better on the day after widening on Tuesday, sources said.

"We walked in the door this morning and everything was 3 to 5 basis points better and with the Treasuries move, it just came off that," a trader said.

Treasuries slid, sending the 10-year benchmark Treasury note yield to nearly 3% as stocks rallied on reports suggesting the U.S. economy is rebounding.

Market movement was attributed to stronger economic data and media reports that indicated the United States would support aid to Europe.

The 10-year note yield went to 2.96% from 2.79%. The 30-year bond yield rose to 4.24% from 4.11%.

Overall investment-grade Trace volume rose 7% to about $13.5 billion, according to a market source.

The Markit CDX Series 14 North American investment-grade index firmed 3 basis points to a spread of 96 bps on Wednesday, according to Markit Group Ltd.

St. Jude Medical five-years

St. Jude Medical priced $500 million of 2.5% five-year senior notes (Baa1/A/A) to yield Treasuries plus 90 bps, said a source who worked on the trade.

Price guidance was in the range of 90 to 95 bps, and the notes priced at the tight end of that.

There was about $1.5 billion of demand for the notes that had a do-not-grow provision on them, a source said.

Bank of America Merrill Lynch, Mitsubishi UFJ Securities (USA) Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of existing debt and repurchase of common stock.

In the secondary market, a trader saw the notes firmer at 86 bps bid, 83 bps offered.

The cardiovascular medical devices maker is based in St. Paul, Minn.

Citi remarkets notes

Citigroup sold $1.875 billion of 4.587% five-year notes in a remarketing of junior subordinated deferrable interest debentures, a market source away from the deal said.

The 6.7% subordinated debentures mature on March 15, 2042. They were priced by Citigroup XXXI.

The new five-year notes (A3/A) priced at a spread of 250 bps over Treasuries.

The notes were priced lower than guidance in the 270 bps area, the source said.

The agent for the remarketing was Citigroup Global Markets Inc.

Proceeds are being used to pay the remarketing agent and purchase an interest-bearing deposit with Citibank NA, and any remainder will be remitted to holders of Upper DECS Equity Units.

The financial services company is based in New York City.

Eastman sells $500 million

Eastman Chemical sold $500 million of senior notes (Baa2/BBB) in two tranches to help finance a tender offer, a market source said.

The $250 million of 3% five-year notes priced at a spread of 140 bps over Treasuries. This was at the tight end of guidance in the range of 140 bps to 145 bps.

A $250 million tranche of 4.5% 10-year notes sold at Treasuries plus 155 bps spread. The notes came in at the tight end of talk in the 160 bps area.

Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and RBS Securities Inc. were bookrunners.

Proceeds are being used to complete a tender offer for up to $500 million of various series of outstanding debt. Any remainder will be used for general corporate purposes.

The notes were freed for secondary trading late afternoon on Wednesday and firmed in trading, a source said.

"It's a couple better from where it priced," a trader said.

The notes due 2015 tightened on the offer side to 140 bps bid, 135 bps offered.

The tranche of 10-year notes was tighter on the offer side at 155 bps bid, 150 bps offered, the trader said.

The global chemical company is based in Kingsport, Tenn.

NiSource's 30-year

NiSource Finance priced $250 million of 6.25% 30-year senior notes (Baa3/BBB-) to yield Treasuries plus 210 bps, an informed source said.

The notes priced tighter than guidance in the 220 bps area.

Deutsche Bank Securities Inc. and RBS Securities Inc. were bookrunners.

Proceeds are being used to pay a portion of the purchase price for a cash tender offer of up to $250 million of outstanding 10.75% notes due 2016 and 6.8% notes due 2019.

The deal is guaranteed by NiSource Inc.

The energy holding company for natural gas and electric subsidiaries is based in Merrillville, Indiana.

Cigna prices $250 million

Cigna sold $250 million of 4.375% 10-year notes (Baa2/BBB) at a spread of Treasuries plus 145 bps, said a market source away from the trade.

Barclays Capital Inc., Goldman Sachs & Co. and J.P. Morgan Securities Inc. were active bookrunners.

Proceeds are going to fund the consideration and costs associated with a tender offer for up to $350 million of outstanding notes due 2019 and for general corporate purposes.

The holding company for health insurance subsidiaries is based in Philadelphia.

IDEX sells $300 million

IDEX sold $300 million of 4.5% 10-year notes (Baa2/BBB/BBB+) at a spread of Treasuries plus 160 bps, a market source said later in the day.

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

Proceeds are being used to repay debt under a domestic multi-currency bank revolver and for general corporate purposes, possibly including strategic acquisitions.

The industrial pumping and dispensing products maker is based in Lake Forest, Ill.

Texas Eastern's 144A deal

Texas Eastern Transmission priced $300 million of 4.125% 10-year notes (Baa1/BBB+/BBB+) to yield 120 bps over Treasuries, a source away from the sale said.

The deal was done under Rule 144A.

J.P. Morgan Securities Inc., SunTrust Robinson Humphrey Inc. and RBS Securities Inc. were bookrunners.

The natural gas transportation and storage subsidiary of Spectra Energy Corp. is based in Houston

Financials mixed in secondary

The financial sector was mixed in trading on Wednesday, mainly from the sell-off in Treasuries, a source said.

"It was definitely wider yesterday and opened this morning 5 basis points better," the source said. "Now, it's just a couple bps wider on the day."

Citigroup Inc.'s 6.375% notes due 2014 (A3/A/), which had moved out 18 bps to 188 bps on Tuesday, firmed 4 bps to 184 bps on Wednesday, a source said.

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