Cliffs Natural, Blackstone, Harsco, JPMorgan, Wyndham among sellers; Amgen notes widen

By Andrea Heisinger and Cristal Cody

New York, Sept. 15 - Cliffs Natural Resources, Inc., Blackstone Holdings Finance Co. LLC, JPMorgan Chase & Co., Harsco Corp., SVB Financial Group, BRE Properties, Inc., Alleghany Corp., J.B. Hunt Transport Services, Inc. and Wyndham Worldwide Corp. priced deals on another full day in the investment-grade bond market.

Only one of the sales hit $1 billion, but there was more than enough action in the primary to keep syndicate desks busy.

"I think it's supposed to quiet [down] tomorrow, finally," one source said.

Cliffs Natural had the largest deal of the day with its upsized $1 billion deal in two tranches of long bonds. The size had been announced at $750 million.

Blackstone priced its $400 million issue of 10-year bonds after being announced two days earlier.

There was an issue of floating-rate notes from JPMorgan Chase. The company sold $250 million of five-year floaters.

And Harsco priced its $250 million five-year notes early, while SVB Financial sold its $350 million of 10-year notes later in the day.

Real estate investment trust BRE upsized its notes due 2021 to $300 million. It had been announced at $250 million earlier in the day.

Insurance company Alleghany sold $300 million of 10-year notes "really late today," a source close to the sale said.

One of the last sales to price came from J.B. Hunt, with its $250 million in five-year notes. The deal was announced late in the day. The notes are guaranteed by parent company J.B. Hunt Transport, Inc.

There was also a split-rated sale from Wyndham Worldwide that priced off the high-grade syndicate desk. Wyndham sold $250 million of notes due 2018.

New bonds firm

In secondary trading, Harsco's new bonds firmed, while Amgen, Inc.'s short-dated notes sold earlier in the week weakened, according to sources.

Elsewhere, the industrial sector was mixed in high-grade trading, a source said.

"Utilities and energy continued to soften up, and there was sell pressure on Amgen, while established names like Merck, Pfizer traded up," the source said. "It was all more situational trading."

Overall investment-grade Trace volume fell 4% to about $11 billion, according to a source.

The Markit CDX Series 14 North American investment-grade index was unchanged on Wednesday with a spread of 104 bps, according to Markit Group Ltd.

Short-dated U.S. Treasuries rallied while longer-term debt fell from growing expectations of Japanese purchases of short-term Treasuries and additional quantitative easing by the Federal Reserve.

"The Treasury market rallied all the way into the purchases and that was the high of the day," said John Briggs, strategist at RBS Securities Inc.

The yield on the benchmark 10-year note rose to 2.72% from 2.68%. The yield on the 30-year bond rose 7 bps to 3.87%.

Cliffs Natural upsizes

Cliffs Natural Resources sold an upsized $1 billion of senior unsecured notes (Baa3/BBB-) later in the day in two tranches, according to an FWP filing with the Securities and Exchange Commission.

The size was initially announced at $750 million.

The $500 million of 4.8% 10-year notes sold at a spread of Treasuries plus 210 bps. They priced at the tight end of guidance in the 215 bps area, plus or minus 5 bps.

The second tranche was $500 million of 6.25% 30-year bonds priced at Treasuries plus 250 bps. This tranche also priced at the tight end of talk in the 255 bps area, plus or minus 5 bps.

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

Proceeds are going to repay borrowings outstanding under a revolving credit facility and for general corporate purposes, including funding capital expenditures and acquisitions.

The international mining and natural resources company is based in Cleveland.

Wyndham's split-rated deal

Wyndham Worldwide priced $250 million of 5.75% split-rated senior unsecured notes (Ba1/BBB-) due 2018 off the high-grade syndicate desk to yield Treasuries plus 365 bps, a syndicate source said.

"With interest rates at historic lows, the timing of this bond offering is excellent," said Tom Conforti, chief financial officer of Wyndham Worldwide.

"This debt issuance is a continuation of our ongoing efforts to achieve an optimal capital structure within an investment-grade profile."

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., JPMorgan and RBS Securities ran the books.

Proceeds will be used to reduce outstanding debt.

The hospitality holding company for hotels and resorts is based in Parsippany, N.J.

Market set for slowdown

There is not much for new deals expected in the final two days of the week, although sources said the slowdown is needed to play catch up after a couple of busy days.

"I think we were near double digits [for number of deals] again today," a syndicate source said. "We keep pumping them out."

The day's sales were from a variety of sectors, although several were from financial and insurance names. They, like everyone else recently, were looking for solid coupons.

"I think you saw a little bit of that, but they were mostly BBB [rated] names, so they weren't anything stellar," the source said.

One syndicate source noted that Blackstone Holdings' sale of notes due 2021 and Wyndham's split-rated sale due 2018 had similar coupons. This is notable because Wyndham is a split-rated name, with Moody's Investors Service rating them as junk, and Blackstone is single A rated by two agencies. Blackstone's coupon was 5.875%, while Wyndham's was 5.75%.

"That wasn't too surprising, but still interesting," the source said.

SVB Financial's 10-year deal

SVB Financial Group sold $350 million of 5.375% 10-year senior unsecured notes (A3/BBB) by late afternoon at Treasuries plus 275 bps, a source who worked on the deal said.

The notes were initially whispered in the high 200 bps area and then priced at the tight end of official guidance in the 275 bps to 280 bps range.

Bank of America Merrill Lynch and JPMorgan were the bookrunners.

Proceeds are going fund $250 million of the cash settle portion of a conversion obligation due on the company's 3.875% convertible senior notes due 2011 and otherwise to repay the principal amount of those notes when they become due on April 15, 2011, with the remainder for general corporate purposes, including working capital.

The financial services and bank holding company is based in Santa Clara, Calif.

Blackstone sells privately

Blackstone Holdings Finance priced $400 million of 5.875% senior unsecured notes due 2021 (/A/A+) to yield Treasuries plus 325 bps, a market source said after the close.

The sale had been on the table since Monday but took a couple of days to price. They were sold under Rule 144A and Regulation S.

Bookrunners were Bank of America Merrill Lynch, JPMorgan and Morgan Stanley & Co. Inc.

The notes are guaranteed by the Blackstone Group and Blackstone Holdings I, II, III and IV, LP.

Proceeds are going to general corporate purposes.

The investment and advisory firm is based in New York City.

Harsco offers $250 million

Metal, rail and infrastructure company Harsco sold $250 million of 2.7% five-year senior unsecured notes (Baa1/A-/A-) by early afternoon to yield 130 bps over Treasuries, a source who worked on the sale said.

The notes were talked early on in the mid-100 bps; then talk was whispered at 137.5 bps to 150 bps. The notes priced at the tight end of official talk in the 135 bps area, plus or minus 5 bps.

Citigroup Global Markets and RBS Securities were the bookrunners.

Proceeds are going to repay debt, including borrowings under U.S. and euro commercial paper programs, and the company's 7.25% British pound sterling-denominated notes, and for other general corporate purposes.

Harsco's bonds weren't extremely active but did trade stronger in the secondary market soon after pricing, a trader said.

The bonds were "at least 2 bps better," the trader said.

The issuer is based in Camp Hill, Pa.

Alleghany prices late

Alleghany priced $300 million of 5.625% 10-year senior unsecured notes late on Wednesday at Treasuries plus 295 bps, an informed source said.

The notes (Baa2/BBB) priced at 99.631 with a make-whole call at Treasuries plus 45 bps.

US Bancorp Investments, JPMorgan and Wells Fargo Securities were the bookrunners.

Proceeds are being used for general corporate purposes.

The insurance company is based in New York City.

J.B. Hunt's guaranteed notes

J.B. Hunt Transport Services sold $250 million of 3.375% five-year senior unsecured notes (Baa3/BBB) late in the day at 200 bps over Treasuries, a market source said.

The notes are guaranteed by J.B. Hunt Transport, Inc.

Proceeds are being used to repay $217.1 million of long-term debt outstanding under a revolving credit facility and for general corporate purposes.

Bookrunners were Bank of America Merrill Lynch and Deutsche Bank Securities.

The trucking and transport company is based in Lowell, Ark.

BRE upsizes to $300 million

BRE Properties sold an upsized $300 million of 5.2% senior unsecured notes (Baa2/BBB) due 2021 at 250 bps over Treasuries, a source away from the trade said.

The deal size was announced at $250 million and later upsized due to demand.

Bookrunners were Deutsche Bank Securities, JPMorgan, Mitsubishi UFJ Securities, RBS Securities and UBS Investment Bank.

Proceeds are being used to repay borrowings under a $750 million unsecured credit facility incurred to fund recent acquisitions and for working capital.

The multi-family apartment communities real estate investment trust is based in San Francisco.

JPMorgan prices floaters

JPMorgan Chase sold $250 million of five-year floating-rate notes (Aa3/A+/AA-) early in the day at par to yield three-month Libor plus 112.5 bps, a source away from the deal said.

JPMorgan ran the books.

The financial services company is based in New York City.

Amgen widens

Amgen's new short-dated debt had firmed in secondary trading after the company sold the notes on Monday, but the paper since has moved out, a source said.

The company on Monday sold $1.5 billion of senior unsecured notes (A3/A+/A) in 10-year and 31-year tranches.

The 3.45% notes due Oct. 1, 2020 priced at 77 bps over Treasuries.

"It had gotten as good as 73, 70 the other day. It's going out at 79, 76," the source said.

Amgen is a Thousand Oaks, Calif.-based biotechnology company that develops pharmaceuticals to treat arthritis, anemia, colon cancer and other ailments.

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