Financials reign as JPMorgan, CIBC, John Deere price; bank paper active; JPMorgan bonds firm

By Aleesia Forni and Andrea Heisinger

New York, Jan. 17 - A small crop of bond sales from financial names were in Thursday's market including JPMorgan Chase & Co., which priced a deal after its earnings announcement.

The banking giant sold $6 billion of notes in three tranches for general corporate purposes. JPMorgan announced earnings of $5.7 billion for the fourth quarter of 2012, beating analyst estimates and besting its $3.7 billion of earnings from the same period of 2011.

The amount the bank priced was the same as similar large offerings done by Goldman Sachs Group Inc. on Wednesday and Bank of America Corp. on Jan. 8.

Canadian Imperial Bank of Commerce sold $750 million of five-year senior notes.

There was a $500 million sale of three-year paper from John Deere Capital Corp.

Toyota Motor Credit Corp. sold $250 million of two-year floating-rate notes. The terms of the sale, done via Citigroup Global Markets Inc., were unavailable.

There was also a $1 billion trade of two-year floaters from World Bank member International Finance Corp.

National Rural Utilities Cooperative Finance Corp. sold $350 million of one-year floaters.

Another financial, Royal Bank of Canada, priced $100 million of five-year floaters.

In the preferred stock market, Vornado Realty Trust sold $300 million of $25-par perpetual preferred stock early in the day after the sale went overnight from Wednesday.

The day began with earnings announcements including one from Citigroup Inc. The bank said it made $1.2 billion in the fourth quarter, which was a jump compared to the $956 million reported in the same period of 2011.

However, Citi also took a $2.3 billion writedown for lawsuits and layoffs that took place, and that bit of news left the company's stock down on the day as the earnings missed analyst projections.

The secondary market saw "lots of movement" in financial names on Thursday, one trader said.

The trader quoted JPMorgan's new bonds 2 basis points to 6 bps better on the day, while the bank's existing 6.3% bond due 2019 widened 1 bp.

Wednesday's deal from Goldman Sachs traded tighter during the session.

Issuance is expected to wind down on Friday ahead of the long holiday weekend for Martin Luther King Jr. Day.

"We may see some more FIGs or something, but nothing major," a market source said. "I don't think there are any big earnings out tomorrow."

JPMorgan's $6 billion trade

JPMorgan Chase sold $6 billion of bonds (A2/A/A+) in three tranches, a market source away from the trade said.

The sale included $2 billion of five-year floating-rate notes sold at par to yield Libor plus 90 bps.

A $1.25 billion tranche of 1.8% five-year notes priced at a spread of Treasuries plus 103 bps. The notes tightened 2 bps to 101 bps bid later in the session.

There was $2.75 billion of 3.2% 10-year notes sold at Treasuries plus 133 bps before tightening 6 bps to 127 bps bid.

Pricing was "a little bit tighter than talk - probably in the low 100 bps and 135 [bps] area," the source away from the trade said.

J.P. Morgan Securities LLC was the bookrunner.

The financial services company is based in New York.

CIBC prices tight

Canadian Imperial Bank of Commerce priced $750 million of 1.55% five-year senior notes (Aa2/A+/AA-) at a spread of Treasuries plus 78 bps, a market source said.

The sale was done tighter than guidance in the low 80 bps area, the source said.

The bookrunners were Citigroup Global Markets Inc., CIBC World Markets Corp., JPMorgan and Wells Fargo Securities LLC.

Proceeds are being added to the bank's funds and used for general corporate purposes.

CIBC was last in the U.S. bond market with a $1 billion sale of 0.9% three-year senior notes sold on Sept. 24 at Treasuries plus 57 bps.

The diversified financial institution is based in Toronto.

Deere sells $500 million

John Deere Capital was in the market with a $500 million offering of 0.75% three-year medium-term notes (A2/A/) priced at 40 bps over Treasuries, a source away from the trade said.

The bookrunners were Deutsche Bank Securities Inc. and JPMorgan.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

RBC prices $100 million

Royal Bank of Canada sold $100 million of five-year senior floating-rate notes (Aa3/AA-/AA) priced at par to yield Libor plus 48 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunner was RBC Capital Markets LLC.

The financial services company is based in Montreal.

IFC's floater

International Finance sold $1 billion of two-year floating-rate global medium-term notes at par to yield one-month Libor flat, a market source said.

The notes (Aaa/AAA/) were sold via syndicates Deutsche Bank Securities Inc., Goldman Sachs & Co. and HSBC Securities (USA) Inc.

The World Bank member and lender to the private sector in developing countries is based in Washington, D.C.

National Rural prices floater

National Rural Utilities Cooperative Finance priced $350 million of one-year floating-rate notes (A2/A/) at par to yield Libor plus 8 bps, according to an FWP filing with the SEC.

U.S. Bancorp Investments Inc. was the bookrunner.

The market lender for electric cooperatives is based in Herndon, Va.

Nestle's $400 million

Nestle Holdings Inc. sold $400 million of 1.375% notes due 2018 (Aa2/AA/) to yield mid-swaps plus 43 bps, or Treasuries plus 67.7 bps, an informed source said.

Bank of America Merrill Lynch, BNP Paribas Securities Corp., Mitsubishi UFJ Securities (USA) Inc. and UBS Securities LLC were the bookrunners.

The unit of Swiss food, beverage and pet care company Nestle SA is based in Wilmington, Del.

Vornado's $25-par trade

Vornado Realty Trust brought $300 million of 5.4% $25-par series L perpetual cumulative redeemable preferred stock, according to a market source.

A trader quoted the issue at $24.60 bid, $24.68 offered at midday, down from earlier bids of $24.70. The issue was seen trading at $24.70 for much of the day.

"They were pretty aggressive in pricing," the trader said. "I was surprised they were able to push it," especially considering that other Vornado issues were trading with higher yields.

"It should stay a little soft for a while," he remarked.

The bookrunners were Bank of America Merrill Lynch, Citigroup, Morgan Stanley & Co. LLC, UBS Securities and Wells Fargo.

Proceeds will be contributed to the company's operating partnership in exchange for preferred units. The operating partnership will use proceeds for general corporate purposes, including to redeem or repurchase preferred stock and units.

Vornado, a real estate investment trust based in New York, will apply to list the preferreds on the New York Stock Exchange.

Goldman Sachs firms

A trader saw Goldman Sachs' $2.75 billion of 2.75% five-year notes at 156 bps offered following Wednesday's pricing with a spread of 165 bps over Treasuries.

The $2.25 billion of 3.625% 10-year notes were quoted 7 bps better at 178 bps bid, 173 bps offered.

The notes priced at 185 bps over Treasuries.

The sale also included a reopening of the bank's 1.6% notes due 2015 to add $1 billion.

Goldman Sachs is a New York-based financial services company.

JPMorgan weaker

The secondary also saw the $3 billion 6.3% issue from JPMorgan due 2019 widen 1 bp to 156 bps bid.

JPMorgan priced the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

Stephanie N. Rotondo contributed to this review

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