Lockheed Martin, Thermo Fisher sell bonds; Universal eyes split-rated sale; new deals flat

By Andrea Heisinger

New York, Nov. 13 - Lockheed Martin Corp. and Thermo Fisher Scientific Inc. each priced bonds on a Friday that was slower than any other day of the week.

Universal Corp. announced an offering of five-year split-rated notes in a filing with the Securities and Exchange Commission. The deal is pricing in the coming week.

Lockheed Martin was the largest deal priced to end the week. The defense company sold $1.5 billion of notes in 10- and 30-year tranches.

Two tranches also came from Thermo Fisher Scientific. The scientific equipment maker did shorter bonds, pricing $750 million in tranches due in 2012 and 2014.

Sources said on Friday that the coming week is also expected to be full of new deals, beginning on Monday. Volume never let up in the past week.

New and recent bonds didn't move much in trading by late in the day, a trader said.

Both tranches of the Lockheed Martin deal hovered around the levels at which they were sold, with the 10-year note quoted as straddling the issue price.

One tranche of the Thermo Fisher deal did slightly better than the other, although both made restrained gains.

A bond from the large, three-tranche Cisco Systems Inc. deal from the top of the week was seen trading at high volume by early in the afternoon.

Spreads were unchanged to a little wider, as some Treasury yields moved tighter. The five-year note was unchanged to yield 2.25%. The 30-year bond made the biggest jump and tightened 4 basis points to a 4.35% yield.

Thermo Fisher sells two tranches

Scientific equipment maker Thermo Fisher Scientific priced $750 million of senior notes in two tranches, a syndicate source away from the sale said.

The $350 million of 2.15% three-year notes priced at a spread of 90 bps over Treasuries.

A $400 million tranche of 3.25% five-year notes priced at Treasuries plus 100 bps.

The notes were sold under Rule 144A and Regulation S, with proceeds going to refinance outstanding debt.

Bank of America Merrill Lynch and Barclays Capital Inc. ran the books for Waltham, Mass.-based company.

Lockheed Martin prices $1.5 billion

Security and defense contractor Lockheed Martin sold $1.5 billion of unsecured notes in two tranches, a source close to the sale said. Proceeds are being used for general corporate purposes.

The $900 million of 4.25% 10-year notes priced at a spread of Treasuries plus 93 bps.

A $600 million tranche of 5.5% 30-year notes priced at Treasuries plus 120 bps.

Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Bank of America Merrill Lynch and Morgan Stanley & Co. ran the books for the issuer based in Bethesda, Md.

Week ends quietly

A hectic four-day week ended on a much quieter note than where it began. That slow spell is not expected to last long, as new deal volume is set to ramp up again on Monday.

"We are looking at a busy one," a syndicate source said of the top of the coming week.

"Companies are still coming out of earnings [blackout], and it's just busy. I'm not complaining."

This constant flow of deals is expected to continue up until the Thanksgiving holiday.

The coming week could have "a few big deals," a market source said, but is mostly expected to be similar to the past week that had a large amount of small sales.

"I think it will be more of the same," the source said. "Nothing's really set yet."

Universal plans split-rated sale

Leaf tobacco producer and processor Universal announced an offering of split-rated five-year senior unsecured notes (Ba2/BBB-), according to a 424B5 filing with the SEC.

The offering is being run off the high-grade syndicate desk and is "next week's business," a source close to the sale said.

The bookrunner is Deutsche Bank Securities Inc.

Proceeds will be used to repay debt, including notes payable and overdrafts incurred to pay a recent medium-term note maturity.

The issuer is based in Richmond, Va.

Lockheed Martin bonds unmoved

The two bonds priced by Lockheed Martin were quoted as mostly unchanged by late afternoon, according to a trader.

The 5.5% bond due 2039 was offered at a level unchanged from its 120 bps price over Treasuries. The 4.25% note due 2019 moved slightly but hovered around its Treasuries plus 93 bps price. It was quoted at 94 bps bid, 90 bps offered.

Thermo Fisher bonds in slightly

Two short bonds priced by Thermo Fisher Scientific were improved in trading - one more than the other.

A trader quoted the 2.15% note due 2012 at between 5 and 10 bps tighter than its price of 90 bps over Treasuries. It was quoted at 84 bps bid, 83 bps offered.

The 3.25% note due 2014 was only slightly better at 99 bps bid, 95 bps offered. It priced at 100 bps over Treasuries.

Secondary volume stable

Although there was "nothing much going on" in the high-grade secondary market on Friday, as a trader said, volume has remained up thanks to the amount of new deals pricing.

"Secondary business has been steady," he said. "I think people are just playing catch up [today] from the day off in the middle of the week."

Business is expected to remain that way into the coming week, he said.

Quest Diagnostics bonds better

The tranches of bonds priced on Thursday by Quest Diagnostics Inc. were quoted as a little tighter late Friday.

The 4.75% notes due 2020 slightly outperformed the 5.75% notes due 2040, a trader said.

The tranche due 2020 priced at 150 bps over Treasuries and was quoted at 146 bps bid, 143 bps offered. The tranche due 2040 was quoted tighter at 152 bps bid, 149 bps offered.

Zimmer bonds tighten

Zimmer Holdings Inc. saw its two tranches of notes tighten slightly in the secondary a day after selling. The 4.625% note due 2019 was quoted by a trader at 112 bps bid, with no offer. The price was 118 bps over Treasuries.

A 5.75% tranche of notes due in 2039 performed similarly, pricing at 135 bps over Treasuries and tightening a little to 133 bps bid.

New Cisco bond tops trading

One of the three new bonds from Cisco Systems was at the top of trading volume by early afternoon, a trader said.

The company priced bonds in five-, 10- and 30-year tranches on Monday.

It was the 4.45% bond due 2020 that was trading hands heavily.

Another new 7.35% bond due 2019 from CNA Financial Corp., also sold on Monday, was also popular with investors.

Beyond the new bonds trading heavily, there was an outstanding note from Burlington Northern Santa Fe Corp. trading behind the Cisco bond.

The railroad and transportation company has been in the news after investor Warren Buffett announced his company was buying Burlington Northern Santa Fe's remaining shares.

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