Simon Property, BP Capital, Duke Realty, Svensk, Macquarie offer bonds; new Citi bond better

By Andrea Heisinger

New York, Aug. 6 - Two investment-grade bond issues were upsized and another was a somewhat surprising addition to the market Thursday as Simon Property Group LP, BP Capital Markets plc, Duke Realty LP, Swedish Export Credit Corp. and Macquarie Group sold bonds.

The BP Capital sale was announced in early morning, although it didn't pop up on most radars until early afternoon. Both Simon Property and Duke Realty added to the amount of their offerings.

New deals were somewhat better once they hit secondary trading, although most didn't improve massively. The recent Citigroup Inc. sale was one of the best performers, while the new BP Capital bonds went nowhere.

Spreads were mixed by late Thursday as some Treasury yields were slightly wider and others were minimally tighter. The five-year note was in 1 basis point from the previous day to yield 2.71%. The 10-year note was out 1 bp to yield 3.76%.

Simon Property upsizes notes

Simon Property Group reopened its 6.75% notes due 2014 to add $500 million, upsized from $250 million, a market source said.

The notes priced at a spread of Treasuries plus 275 bps.

Total issuance is $1.1 billion, including $600 million issued May 15 at Treasuries plus 497 bps.

The sale went very well, a source close to the deal noted.

Bookrunners were Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and UBS Investment Bank.

Proceeds will be used for general corporate purposes.

The developer and owner of retail properties is based in Indianapolis.

BP Capital does quick sale

BP Capital Markets sold $2 billion of senior notes in two tranches early Thursday, a market source said. The deal priced quickly and was announced "early morning, around 8 or 9 [a.m. ET]," a source close to the sale said. Despite this, it remained largely off the radar until it priced by early afternoon.

The $750 million of 1.55% two-year notes priced at Treasuries plus 40 bps.

The company also reopened its 3.875% notes due 2015 to add $1.25 billion. They priced at a spread of Treasuries plus 75 bps.

Total issuance for the reopened tranche of notes is $2 billion, including $750 million priced on March 5 at 210 bps over Treasuries.

The sale went "very well" and is a "good name that was very oversubscribed," the source said. He added that it "traded tighter at the break."

Bookrunners were BNP Paribas Securities Corp., Deutsche Bank Securities, Morgan Stanley & Co. Inc. and RBS Securities Inc.

The oil and gas company is based in London.

Issuance streak not done

Despite the large amount of new deals hitting the high-grade market in the past few days, there doesn't seem to be a completely dead day on the horizon, a source said.

"There's still a lot of money out there," he said. "That's a good thing, right?"

It's unclear how many deals may pop up on Friday, although it's "likely there could be a couple," a market source said.

Nearly all of the recent sales have been oversubscribed and improved once they hit the secondary market.

"Investors want good paper," a source said. "We're seeing a lot of that with Dow, BP, Citi."

Both the Dow and Citigroup sales have been popular in trading.

Duke Realty adds tranche to deal

Duke Realty priced an upsized $500 million of senior notes in two tranches, upsizing from the original one tranche totaling $250 million.

A $250 million tranche of 7.375% bonds due 2015 priced at Treasuries plus 479.2 bps.

An added $250 million tranche of 8.25% 10-year notes priced at Treasuries plus 463.3 bps.

Morgan Stanley, UBS Investment Bank and Wells Fargo Securities ran the books.

Proceeds are going to reduce outstanding debt and for general corporate purposes.

The real estate investment trust is based in Indianapolis.

Macquarie offers 10-year

Macquarie Group sold $500 million 7.625% 10-year notes at Treasuries plus 395 bps.

They were sold via Rule 144A.

Bank of America Merrill Lynch, HSBC Securities and RBS Securities were tapped as bookrunners.

The financial and banking company is based in Sydney, Australia.

Swedish Export Credit sells $1 billion

The Swedish Export Credit offered $1 billion of five-year floating-rate notes priced at par to yield three-month Libor plus 75 bps, according to an FWP filing with the Securities and Exchange Commission.

Goldman Sachs was the bookrunner.

The government-owned company provides financial support for export companies and is based in Stockholm.

BP bonds unchanged

The two tranches of new and reopened notes from BP Capital were mostly unchanged after pricing, a trader said.

The 1.55% due 2011 was sold at 40 bps over Treasuries and was at that level in trading. A 3.875% bond due 2015 that was reopened didn't fare much better, tightening to 73 bps bid, 71 bps offered from the 75 bps price over Treasuries.

New Citi bond makes headway

The 6.375% bond due 2014 from Citigroup continued to gain from its pricing and trading levels Wednesday, a trader said.

The bond was sold at 380 bps over Treasuries and was quoted at 353 bps bid, 352 bps offered late Thursday. This was better than its 360 bps bid, 355 bps offered quote from the previous day.

Macquarie 10-year improves

Macquarie Group's new 7.625% due 2019 was about 10 bps better once it was seen trading late in the day, a trader said.

The issue was priced at Treasuries plus 395 and was quoted at 384 bps bid.

The trader said he initially did not see the bond trading.

Reopened Simon Property better

Simon Property Group's 6.75% bond due 2014 was nicely improved once it hit trading after pricing at Treasuries plus 275 bps. A trader said it was at 247 bps offered with no bid.

AGL Capital loses ground

The 5.25% bond due 2019 from AGL Capital Corp. made slight inroads after pricing Wednesday but had slipped back to near its issue price of Treasuries plus 162.5 bps. The bond was at 162 bps bid, 160 bps offered by late afternoon, a trader said, which was worse than its 160 bps bid, 155 bps offered from Wednesday.

Reopened Magellan Midstream stagnates

Magellan Midstream Partners, LP priced a 6.55% bond due 2019 Wednesday at Treasuries plus 185 bps, and it initially tightened to 179 bps bid, 175 bps offered. That was the same level it was late Thursday, a trader said.

Mack-Cali 10-year trades up

A 7.75% bond due 2019 from Mack-Cali Realty, LP traded up from its dollar price of 99.145, a trader said. It was at 101 bid, 101.5 offered.

Dow Chemical bonds draw investors

Two new bonds from Dow Chemical Co. were among the most traded as of early afternoon, a trader said.

A floating-rate bond due 2042 from Wachovia Capital Trust III sat at the top of trading, with the Dow bonds trailing behind.

The Dow bonds - a 4.85% due 2012 and 5.9% due 2015 - were priced Tuesday and have done well since. They have tightened solidly in the following days.

The bonds were part of a three-tranche deal from Dow that totaled $2.75 billion.

Bank, broker CDS tighter

Credit-default swaps for bank and brokerage names were better across the board by late afternoon, a trader said.

Bank names were 3 to 5 bps tighter, while brokers were 5 bps better.

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