Portland General Electric, California Water, Toll sell bonds; Portland General firms in trading

By Andrea Heisinger and Paul Deckelman

New York, April 13 - A hangover from the previous week's slow down remained Monday, with the investment-grade market seeing only small sales from Portland General Electric Co., California Water Service Co. and a split-rated offering from Toll Brothers Finance Corp. providing the day's deals.

An offering of five-year bonds from Inter-American Development Bank was announced, but appeared not to have priced by late afternoon, a syndicate source said.

Earnings blackouts and extended vacations will likely make for a slow week in terms of new issuance, sources on syndicate desks said. Some of those earnings began Monday, with Goldman Sachs & Co. announcing a profit for the first quarter of 2009.

In the secondary sphere on Monday, a market source said the CDX Series 12 North American high-grade index tightened on the day to a mid bid-asked spread level of 173 bps, versus 182 bps on Thursday, the last session before the three-day holiday break.

Advancing issues kept their lead over decliners, by a better-than three-to-two ratio.

Overall market activity, reflected in dollar volumes, rose 15% from the levels seen on Thursday.

Spreads in general were seen wider, in line with lower Treasury yields; for instance, the yield on the benchmark 10-year note fell by 8 bps, to 2.85%.

The new Portland General Electric bonds were seen having tightened slightly from the spread over comparable Treasury issues at which they had priced.

Portland utility sells bonds

Portland General Electric sold an upsized $300 million of 6.1% 10-year first mortgage bonds at Treasuries plus 325 basis points.

The size of the deal was increased from $250 million, a source close to it said.

The electric company, based in Portland, Ore., is using the proceeds for purposes including funding capital expenditures and refinancing $142 million of pollution control bonds due 2033.

Price talk was wider than the level the deal came at. Guidance was set at 337.5 to 350 bps, a source close to the sale said. They were "able to lean on the price" due to the size they got done, he said.

Other than that, it was a basic deal. "It was a utility - a small size," he said, "nothing special."

Deutsche Bank Securities and Wachovia Capital Markets were bookrunners for the sale.

Toll Brothers sells split-rated deal

Toll Brothers Finance, a unit of home building and finance company Toll Brothers Inc., sold $400 million of 8.9% senior notes due 2017 to yield 9.25%.

The notes are rated Ba1/BBB-. The company plans to use the proceeds for general corporate purposes including repayment and repurchase of outstanding debt.

Bookrunner was Citigroup Global Markets.

The company is based in Horsham, Pa.

California Water sale done

A couple of days after it was announced, bonds from California Water Service were finally priced.

The sale was announced April 8.

The $100 million deal of 5.875% 10-year first mortgage bonds priced at par to yield 5.875%.

The San Jose, Calif.,-based utility is using proceeds to pay down outstanding short-term borrowings, with the remainder going to general funds.

Robert W. Baird & Co. was bookrunner.

IADB announces five-year offering

Inter-American Development Bank announced a sale of triple-A rated five-year bonds early Monday, but the deal appeared not to have priced by about an hour after the market close, a syndicate source said.

"I am not seeing any terms," he said, adding that it appears to be pricing Tuesday.

Citigroup, Morgan Stanley & Co. and RBS Greenwich Capital are bookrunners.

The bank promotes development in Latin American and Caribbean countries, and is based in Washington, D.C.

Goldman earnings net little impact

There was little impact on the investment-grade primary market after Goldman Sachs' announcement of a $1.66 billion profit for the first quarter, sources said.

"There weren't a lot of deals, so it was hard to say, but I didn't see much," a source said.

Many companies and financials remain in earnings blackout, making it even tougher to feel any change.

"Maybe tomorrow we'll see something," a source said. "A lot of deals were already announced [before Goldman's earnings]."

Goldman's announcement was considered a good sign for the bank sector. Along with the earnings announcement, the company said it will raise $5 billion from the sale of stock to the public. This will be used to pay back $10 billion in government aid it received.

"It's a good sign, definitely," a syndicate source said of the news. "It was kind of the talk today."

Tuesday will likely see more deals like Monday, with a market source predicting "more utilities, small deals."

Portland General issue tightens slightly

When the new Portland General Electric 6.10% notes due 2019 were freed for secondary dealings, a trader saw the issue bid at 322 bps over. That was in slightly from the 325 bps over spread at which the upsized $300 million issue of bonds had priced earlier in the session.

ConAgra bonds seen tighter

Among other recently priced issues, the trader saw both tranches of ConAgra Foods Inc.'s issue from last week quoted at tighter levels from where they had priced.

He saw both bid at 365 bps over, although he did not see an offered side on that.

Omaha, Neb.-based foods producer ConAgra priced $500 million 5.875% notes due 2014 at 400 bps over last Monday.

At the same time, it priced $500 million of 7% notes due 2019, at 412.5 bps over.

Hutchison treads water

The trader further saw Hutchison Whampoa Ltd.'s new 7.625% notes due 2019 failing to gain any secondary traction, quoting them bid at 478 bps over, with no offered side.

The Hong Kong-based conglomerate, whose interests include telecommunications, operating seaports and property development, priced its $1.5 billion of bonds last Monday at 475 bps over.

Pfizer bonds widen

A market source saw Pfizer Inc.'s 6.20% notes due 2019 having widened out by 10 or 12 bps to around the 225 bps over mark in active dealings of more than $40 million traded. However, the New York-based pharmaceutical giant's $3.25 billion of 10-year bonds - which priced on March 17 as part of a massive $13.5 billion five-tranche mega-deal, and which have been actively trading at considerably tighter levels ever since then - remain solidly tighter than the 325 bps level at which they had priced.

Goldman gains on early numbers, stock-sale news

Goldman Sachs Group Inc. - which had been expected to release its latest quarterly numbers on Tuesday - surprised the market by moving that release up by a day, and by doing better than expected.

The big New York-based investment bank turned commercial bank reported a first-quarter profit of $1.66 billion, or $3.39 per share, easily beating Wall Street's expectations of profits of $1.64 per share. The numbers also topped year-ago levels of $1.47 billion, or $3.23 per share, in the quarter ended Feb. 29 of last year, and represent a huge improvement over the $2.29 billion Goldman lost in the fourth quarter. Goldman also announced plans to raise $5 billion in stock to help it pay back government TARP bailout funds.

A trader said that Goldman's hybrid bonds "had a nice little pop to it" on the news, although he acknowledged that the company's bonds were "very thinly traded today."

Still he said, "it does feel - that unless there are some devils in the details there, it feels pretty good right now."

Goldman's 5.625% notes due 2017 were seen firmer at about 625 bps over, while its 6.25% notes due 2017 tightened a bit to the 445 bps over area.

However, a market source saw Goldman's 6.345% bonds due 2034 out by over 20 bps, at about the 715 bps level.

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