Barclays, Harris, Wachovia, Bank of NY Mellon price issues to end $35 billion-plus week

By Andrea Heisinger and Paul Deckelman

Omaha, Nov. 30 - Barclays Bank plc, Harris Corp., Wachovia Bank NA and Bank of New York Mellon Corp. priced issues Friday to end a week with more than $35 billion in volume.

Much of the week's issues came on Wednesday and Thursday after a handful of issuers successfully braved the market Tuesday.

This offered encouragement to others who had been holding off on issuing during the volatility of the last couple of weeks, sources said.

The pace slowed Friday.

Wachovia brings $2.5 billion

Wachovia priced $2.5 billion in 6.6% 30-year subordinated bank notes at 99.792 to yield 6.615% at a spread of Treasuries plus 220 basis points via Wachovia Securities.

Harris priced $400 million in 5.95% 10-year notes at 99.652 to yield 5.997% at a spread of Treasuries plus 200 bps.

Banc of America and Morgan Stanley were bookrunners.

Barclays priced $1 billion, or 40 million, of 7.75% perpetual non-cumulative preference shares at par of $25 each.

Barclays, Citigroup, UBS and Wachovia were bookrunners.

Bank of New York priced $375 million in three-month Libor plus 35 bps two-year floaters at par, via Lehman Brothers and Merrill Lynch.

The week's long list of issuers included Anheuser-Busch Cos. Inc., Barclays Bank plc, CIT Group Inc., Virginia Electric & Power Co., Prudential Financial, Nucor Corp., Nordstrom, Inc., EnCana Corp., Kellogg Co., Bank of America Corp., General Electric Co., Walt Disney Co., PepsiCo Inc., Aetna Inc., Manufacturer's & Traders Trust Co., Pacific Gas & Electric Co., E.I. duPont de Nemours & Co., Rockwell Automation, Inc., Southwestern Electric Power Co., New York State Electric & Gas Corp., Marks & Spencer and Textron Inc.

Mortgage lender Freddie Mac priced $6 billion in fixed to floating rate preferred stock that generated interest from both high-grade and high-yield names, although a source close to the deal said most were high grade.

Goldman Sachs Group, Inc. reopened $295 million of 6.75% 30-year subordinated notes priced at 98.275.

This brought the total size to $2.795 billion, adding to the $2.5 billion issued on Oct. 3.

Busy week possible

The week ahead promises to be busy, especially if stability continues.

One market source predicted a slow start Monday, with much more of the backlog coming out Tuesday and during the middle of the week.

"It's not like the backlog all got eaten up this week," another source said. "There's still a healthy amount to come out if market conditions are right."

Friday's tone was strong, which could carry over into Monday, the source said.

"There may not be quite as many issuers as this week, but if things stay strong we could definitely see more days like we had this week," a source said.

New deals better

The major focus of the investment-grade secondary market Friday remained the cascade of new deals seen over the past several sessions, with trading in the more established bonds taking a back seat.

"The new issues from [Thursday] tightened up pretty good," a trader said, adding that they were helped by market speculation that federal officials and mortgage industry companies are working on a plan to help subprime borrowers avoid defaulting on their loans.

He saw General Electric's 5¼% 10-year notes, which had priced at 140 basis points over Treasuries, tighten to 124 bps over, while Bank of America's new 10-years, which had priced Thursday at 190 bps over, tightened as low as 174 bps before "giving a little back at the end of the day" to go home trading in a 177 bps context.

He said the new Wachovia 6.6% 30-year notes, after pricing at 220 bps over were left at 220 bps bid, 218 bps offered.

Overall, though, he said "things had a much better tone with oil being down and the stock market having a positive tone. Spreads had a much better tone."

He also saw the new Prudential Financial deal that priced earlier in the week tighter by "a couple of beeps."

Another trader agreed that "most new issues were up. He said that Textron Corp., whose 5.6% 10-year notes priced at 165 bps over on Thursday, "hung in there" around issue, as did Pacific Gas & Electric's new bonds. Other new bonds, he said were "5 to 10 basis points tighter."

The new bonds, he declared "remain the main high-grade focus. Most activity has been in the new issues."

He added that "all the new issues that come keep repricing the market one way or another - usually wider" from where they were several weeks or months ago.

Yet another trader said he saw the new Walt Disney 4.70% notes due 2012 having come in to 127 bps bid, 133 bps offered, versus Thursday's 135 bps issue price. He also saw DuPont's 5% notes due 2013 "continuing to get better," tightening to 145 bps bid, 141 bps offered from 147 bps bid, 143 bps offered on Thursday and well in from their 158 bps issue price Wednesday.

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