Time Warner, Atmos, ConEd, Northwestern Energy, Praxair, Illinois Tool sells bonds; spreads tighten

By Andrea Heisinger

New York, March 23 - A new bank bailout plan announced Monday morning helped draw several names to the high-grade primary market, including Time Warner Cable Inc., Atmos Energy Corp., Consolidated Edison Co. of New York, Inc., Northwestern Energy Corp., Illinois Tool Works Inc. and Praxair Inc.

Other companies announced deals but did not price them. Offerings backed by the Federal Deposit Insurance Corp. are planned by Citigroup Inc. and MetLife Inc.

Bacardi Ltd. is planning an offering of five- and 10-year notes, with pricing Tuesday.

Many of the day's issues priced too late for secondary trading, but those from Illinois Tool Works, Northwestern Energy and Atmos Energy were each seen tighter after pricing.

Spreads remained tighter late Monday as Treasury yields were slightly wider than the previous day's level. The five-year note was 3 bps wider to yield 1.68%.

ConEd unit taps primary

Consolidated Edison Co. of New York priced $750 million of debentures in two tranches, both of which priced wider than talk, a source said.

The $275 million of 5.55% five-year notes priced at Treasuries plus 387.5 bps, which was farther out than the 375 bps talk.

The $475 million of 6.65% 10-year notes priced at Treasuries plus 400 bps, also decidedly wider than the 388 bps talk.

The New York City-based utility, and subsidiary of Consolidated Edison, Inc., is using the proceeds for purposes including repayment of short-term debt.

Barclays Capital Inc., Morgan Stanley & Co. Inc. and Wachovia Capital Markets LLC were the bookrunners.

Time Warner Cable sells $3 billion

Time Warner Cable sold $3 billion in senior unsecured notes in two tranches late Monday, an informed source said, with the deal not getting done until after 5:30 p.m. ET.

The tranches both came in under price guidance, he said.

The $1 billion of five-year notes priced to yield Treasuries plus 595 bps, with talk in the 600 bps area.

The $2 billion of 10-year notes priced to yield Treasuries plus 570 bps, with guidance in the 575 bps area. Guidance had a margin of plus or minus 12.5 bps, the source said.

Term sheets were not available at press time Monday because of the lateness of pricing.

Banc of America Securities, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., UBS Investment Bank and Wachovia Capital Markets were the bookrunners.

The cable company, based in New York City, is using part of the proceeds to repay all borrowings under a $1.932 billion term loan facility used to fund, in part, a special cash dividend to stockholders of Time Warner Cable paid on March 12.

Illinois Tool Works prices

Diversified manufacturer Illinois Tool Works priced $1.5 billion in five- and 10-year notes via Rule 144A.

The $800 million of 5.15% five-year notes priced at Treasuries plus 350 bps, while the $700 million 6.25% 10-year notes priced at Treasuries plus 360 bps.

The company is based in Glenview, Ill.

Banc of America Securities and HSBC Securities were the bookrunners.

Atmos upsizes 10 year

The $450 million offering from Atmos Energy was increased from the original $400 million, a source close to the deal said.

The 8.5% 10-year notes priced to yield Treasuries plus 587.5 bps, which was in line with talk, the source said.

The natural gas company is based in Dallas and plans to use proceeds to redeem $400 million of 4% senior notes due 2009.

Banc of America Securities, Goldman Sachs & Co., RBS Greenwich Capital and SunTrust Robinson Humphrey ran the books.

Praxair downsizes sale

Praxair, the industrial gas supplier based in Danbury, Conn., sold a downsized $300 million of 4.375% five-year notes at Treasuries plus 275 bps.

The original amount was $400 million, a source said.

The company is primarily using proceeds to repay debt incurred to repay 2.75% notes due 2008.

Banc of America Securities and Citigroup ran the books.

"The Treasury rally provided a good opportunity to lock in attractive rates to fund our long term growth," said Michael J. Allan, Praxair's vice president and treasurer, in a news release.

Northwestern Energy sells bonds

Northwestern Energy priced $250 million of 6.34% 10-year first mortgage bonds at Treasuries plus 370 bps. The bonds were sold via Rule 144A.

Banc of America Securities and J.P. Morgan Securities were bookrunners.

Bacardi plans two-tranche sale

Bacardi announced a two-tranche sale of notes Monday, set to price under Rule 144A. The sale is Tuesday's business, a source said.

The notes from the spirits company, based in San Juan, Puerto Rico, will be in five- and 10-year tranches, the source said.

Banc of America Securities, Citigroup and RBS Greenwich Capital are the bookrunners.

Citi plans FDIC issue

Citigroup announced in a 424B2 filing with the Securities and Exchange Commission that it plans to price medium-term senior notes backed by the FDIC. The financial services company is based in New York City.

Citigroup is the bookrunner.

MetLife announces FDIC sale

MetLife announced it has begun an offering of senior notes due 2012 that will be backed by the FDIC, according to an 8-K filing with the SEC. The company may issue up to $397 million under the guarantee.

Proceeds will be used for general corporate purposes.

The company is pricing the deal now in light of the program's fee increase starting April 1, according to the SEC filing.

Bank plan spurs new deals

Many companies had already made a "go call" Monday morning, a source said, and the announcement of a further bank bailout plan only made the day more productive.

"It was definitely a good thing to come in on a Monday and see something good for a change," the source said. "Usually it's something bad has happened."

The government plan seeks to pair with private investors to buy up to $1 trillion in so-called "toxic" assets from financial names in the hope of getting credit flowing again. The move sent the stock market up and was viewed somewhat favorably by busy syndicate desks.

"We're kind of too busy to worry about it today," a source said. "I think it maybe brought in a couple more names."

The remainder of the week is on a day-to-day basis, a syndicate source said, as has been the trend for several months. Judging by Monday, and the previous week, he added, it "should be a busy one."

Atmos bonds tighten

The new 8.5% notes due 2019 from Atmos Energy were seen tightening the most among the new issues by late Monday afternoon.

The bonds priced at 587.5 bps over Treasuries and were quoted at 572 bps offered, a trader said.

Illinois Tool in 5 bps

The new five- and 10-year note issues from Illinois Tool Works were each seen 5 bps tighter in trading, a trader said.

The 5.15% notes due 2014 were at 345 bps bid, in from the 350 bps price over Treasuries.

The 6.25% notes due 2019 were at 355 bps bid, tightening from the 360 bps price.

Northwestern Energy comes in

The 6.34% mortgage bonds due 2019 from Northwestern Energy priced at Treasuries plus 370 bps and were 5 bps to 30 bps tighter after selling, a trader said.

The bonds were seen at 365 bps bid, 340 bps offered.

Recent deals top traded

Two issues from the previous week from Pfizer Inc. and Barrick Gold Corp. were at the top of the most-traded list early Monday afternoon.

Pfizer's 4.45% notes due 2012 were on top, retaining the spot they held Friday.

The second most-traded bonds were the 6.95% bonds due 2019 from Barrick Gold.

Bank, broker CDS tighten

Bank and broker names saw their credit-default swaps tighten by late Monday afternoon, a trader said.

Bank names were seen 5 bps to 20 bps tighter, while broker names were 10 bps to 15 bps tighter.

Simon Property bonds unchanged

The 10.35% bonds due 2019 priced Friday by Simon Property Group, LP were seen mostly unchanged late Monday, a trader said.

The bonds priced at 97.578 and were trading at 97.5 to 97.75.

Financial spreads gain big

Outstanding issues from financial names were seen making big swings versus the previous week's levels.

HSBC Finance and Merrill Lynch were each had bonds that tightened about 230 bps. It was a 5.7% due 2011 in the case of HSBC and a 6.22% due 2026 in the case of Merrill Lynch.

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