Burlington Northern, GATX, Cabot, Brandywine, Ohio Power offer bonds; financials active

By Andrea Heisinger

New York, Sept. 21 - GATX Corp., Cabot Corp., Brandywine Operating Partnership, LP, Burlington Northern Santa Fe Corp., Ohio Power Co., Niagara Mohawk Power Corp. and Seacor Holdings Inc. each sold bonds on a busy Monday.

Nearly all of the deals were $500 million or less in size and had ratings in the low-BBBs.

The Seacor Holdings and Brandywine Operating issues were split-rated and sold off the high-grade syndicate desk. Brandywine sold $250 million notes due 2015 at a yield, and Seacor priced $250 million 10-year notes at a spread.

Burlington Northern clocked in as the largest sale of the day, doing $750 million of 10-year notes priced at the tight end of talk. The deal was initially $500 million. Cabot also upsized its sale to $300 million of seven-year bonds from $250 million.

GATX was one of the first deals to price for the day. It sold $300 million of three-year notes. Ohio Power also priced its $500 million in 12-year notes swiftly.

Trading levels were not available for many of the day's deals, but the focus was on the non-bank bonds since they inundated the primary to start the week.

A trader on the financial side quoted a recent bond from Zions Bancorporation as having moved up at the dollar level, while a new non-FDIC-guaranteed bond from Citigroup Inc. stayed tighter than where it priced.

Spreads were mixed, with some Treasury yields widening and others moving tighter by late afternoon.

The 30-year Treasury bond was 3 basis points wider at 4.24%, and the five-year note moved 1 basis point tighter to 2.44%.

Burlington Northern upsizes 10-year

Burlington Northern Santa Fe sold an upsized $750 million in 4.7% 10-year notes to yield Treasuries plus 125 bps, an informed source said.

The size was originally $500 million, he said. The deal was talked at the 130 bps area, with a margin of plus or minus 5 bps, the source said, adding that there was "north of $2 [billion] on the books."

Bookrunners were Barclays Capital Inc., Goldman Sachs & Co. and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, including funding working capital, funding capital expenditures, to repay debt and commercial paper and to repay at maturity an issue of 7.125% notes due Dec. 15, 2010.

The railroad transportation company is based in Fort Worth.

Brandywine split-rated notes

Brandywine Operating Partnership sold $250 million of 7.5% split-rated notes due 2015 to yield 7.625%, according to an FWP filing with the Securities and Exchange Commission and an informed source.

The notes (Baa3/BBB-/BB+) priced at a spread of Treasuries plus 516.2 bps.

There was no formal price guidance for the sale, a source close to the offering said, adding that it went "straight to the launch" at a yield of 7.625%. It was sold off the high-grade syndicate desk.

It was well-oversubscribed, with more than $2 billion in sales on the books, the source said.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities Inc., Wells Fargo Securities and RBS Securities Inc.

Proceeds will be used to reduce borrowings under a revolving credit facility and for general corporate purposes.

The deal is guaranteed by Brandywine Realty Trust.

The real estate investment trust is based in Radnor, Pa.

Seacor offers split-rated deal

Seacor Holdings priced $250 million of 7.375% split-rated 10-year senior notes (Ba1/BBB-/BBB-) at Treasuries plus 400 bps, an informed source said.

The notes were talked and launched at 400 bps over Treasuries, a source close to the deal said. The deal was done off of the high-grade syndicate desk, with the size staying the same throughout the pricing process.

Bookrunners were JPMorgan and Deutsche Bank Securities Inc.

Proceeds are going to general corporate purposes.

The offshore oil, gas and marine equipment company is based in Fort Lauderdale, Fla.

Cabot upsizes seven-year

Specialty Chemical and materials company Cabot sold an upsized $300 million of 5% seven-year senior unsecured notes at Treasuries plus 200 bps.

The size was initially $250 million, a source said.

JPMorgan and Bank of America Merrill Lynch were bookrunners.

Proceeds will be used to repay debt under a revolving credit agreement and for general corporate purposes.

The issuer is based in Boston.

High-grade bonds retain interest

Investors have remained interested in the high-grade bond market in recent weeks, a market source said late in the day.

"Investors are definitely interested," he said, pointing to two of the day's deals that were heavily oversubscribed.

"There's been a lot of receptivity of late."

Monday's rush of new issues continues the trend of the previous week that had some of the largest amounts of issuance for a single day.

The tone was good to start the week, the source said.

"Credit felt resilient," he said.

The remainder of the week, especially Tuesday and Wednesday, "feels busy," a source said.

"Tuesday we should see a lot of stuff," he said. "Wednesday, it depends on how things go Tuesday."

There has been a glut of bonds pricing that are rated in the low BBBs, but this could change.

"I see a lot of names [pricing] across the spectrum," he said.

GATX sells three-year early

GATX sold $300 million 4.75% three-year senior notes by early afternoon at Treasuries plus 325 bps.

Citigroup Global Markets Inc. and Bank of America Merrill Lynch ran the books.

Proceeds are going to repay commercial paper maturing within 20 days and for general corporate purposes, including working capital and capital expenditures.

The rail, marine and industrial equipment operator and lease company is based in Chicago.

Ohio Power offers 12-year

Ohio Power priced $500 million of 5.375% 12-year senior notes at Treasuries plus 195 bps.

Bookrunners were KeyBanc Capital Markets Inc., RBS Securities and UBS Investment Bank.

Proceeds are being used for general corporate purposes, including repayment of all or a portion of $400 million in floating-rate notes due April 5, 2010 at maturity. Proceeds may also be used to fund working capital, for construction programs and to repay advances from affiliates.

The utility is based in Columbus, Ohio.

Niagara Mohawk sells notes

National Grid electric subsidiary Niagara Mohawk Power quietly priced $500 million 3.553% five-year senior notes at Treasuries plus 110 bps, an informed source said.

The notes were sold via Rule 144A.

Deutsche Bank Securities, JPMorgan and Mitsubishi UFJ Securities were the bookrunners.

The issuer is based in Syracuse, N.Y.

Zions Bank trades up

A 7.75% bond due 2014 priced Friday by Zions Bancorporation had moved up from its dollar price of 86.888, a trader on the financial side said late in the day.

He quoted the bond at 89 bid, 91 offered on Monday.

New Citi bond holds steady

A recently priced bond from Citigroup was holding firm by late afternoon Monday, remaining nicely tighter than it pricing level from the previous week, a trader said.

The 5.5% bond due 2014 priced at 325 bps over Treasuries and was quoted at 302 bps bid, 292 bps offered, he said. This was mostly unchanged to slightly better than its quote on Friday at 303 bps bid, 300 bps offered.

The trader said he "hasn't really been following" a new bond sold the same day by Barclays Bank plc and did not have a quote for it. The financial services company priced a 5% bond due 2016 at 200 bps over Treasuries. It was 20 to 25 bps better on Friday.

Citi, Dow bonds top trading

Outstanding bonds from Citigroup and Dow Chemical Co. were among those being traded at high volume by early afternoon Monday, a trader said.

Citigroup's 6.375% bond due 2014 was at the top of trading, and its 8.5% bond due 2019 was also heavily seen.

The financial services company did two deals the previous week. One was a mega-deal of notes backed by the Federal Deposit Insurance Corp. that totaled $5 billion, and the other was done two days later without the guarantee and totaled $2 billion.

Both performed well in the secondary and pushed most of the company's other outstanding bonds tighter.

Dow Chemical's 8.55% note due 2019 was popular with investors. The company's shares were higher on Friday after the specialty chemical maker announced it had reduced a bridge loan, according to an article from Bloomberg.

A new 5.125% bond due 2019 from Newmont Mining Corp. was also high on the list Monday, less than a week after pricing.

Bonds on the move

Outstanding bonds from Plains All American Pipeline, LP and the Walt Disney Co. were among the day's top-moving bonds, a source said late in afternoon.

Disney saw its 6.375% note due 2012 widen by about 20 bps from a week ago. The bond move follows Friday's resignation of the chairman of Walt Disney Studios, Dick Cook.

Also moving was a 6.65% note due 2037 from Plains All American. The bond tightened by nearly 25 bps from the previous week after the company completed a successful stock offering.

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