CAT Financial, USAA, Waste Management price bonds; CAT bonds tighten; National Retail firms

By Aleesia Forni and Cristal Cody

Virginia Beach, May 5 - Caterpillar Financial Services Corp. priced a $2 billion offering of notes during Monday's session, joining a handful of mostly smaller corporate deals entering the day's primary market.

Caterpillar Financial priced the notes in three maturities, including a rare tranche of 50-year bonds.

A $1 billion tranche of 3.4% 10-year notes priced at Treasuries plus 80 basis points, while a $500 million tranche of 4.3% 30-year notes priced at Treasuries plus 95 bps.

The $500 million 50-year tranche of 4.75% bonds priced with a spread of Treasuries plus 137.5 bps.

The session also saw new deals from National Retail Properties, Inc., Appalachian Power Co., Waste Management, Inc. and USAA Capital Corp.

National Retail Properties sold a $350 million offering of 3.9% 10-year notes with a spread of Treasuries plus 132 bps, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 135 bps.

Waste Management was also in the market with a $350 million issue of bonds on Monday.

The company sold the 3.5% notes due 2024 with a spread of Treasuries plus 92 bps, at the tight end of the Treasuries plus 95 bps area talk.

USAA Capital issued $350 million of senior notes due 2019 with a spread of Treasuries plus 45 bps in a Rule 144A deal.

Pricing was at the tight end the 50 bps over Treasuries area talk.

Meanwhile, Appalachian Power priced $300 million of 4.4% bonds due 2044 at Treasuries plus 105 bps.

The issue sold at the tight end of the Treasuries plus 110 bps area talk.

Issuance momentum is expected to carry on this week, with sources expecting around $20 billion of issuance.

Investment-grade bond spreads stayed stable over Monday's session, according to market sources.

The Markit CDX North American Investment Grade series 22 index was unchanged at a spread of 64 bps.

Caterpillar Financial Services' shorter-dated notes traded flat to slightly better in aftermarket trading, while the tranche of 4.75% bonds due 2064 tightened more than 10 bps.

National Retail's 3.9% notes due 2024 tightened 4 bps on the bid side in the secondary market, a trader said.

Appalachian Power's 4.4% 30-year bonds firmed 2 bps on the bid side, according to traders.

Waste Management's 3.5% notes due 2024 traded 2 bps better on the offered side, traders said.

Caterpillar brings $2 billion

Caterpillar Financial priced $2 billion of senior notes (A2/A/A) in three tranches on Monday, according to an FWP filing with the SEC.

The sale included $1 billion of 3.4% notes due 2024, which sold at 99.983 to yield 3.402%, or Treasuries plus 80 bps.

A second tranche was $500 million of 4.3% 30-year notes priced at Treasuries plus 95 bps. The notes sold at 99.298 to yield 4.342%.

A $500 million tranche of 4.75% bonds due 2064 sold at 99.676 to yield 4.767%, or Treasuries plus 137.5 bps.

Caterpillar Financial Services' 3.4% notes due 2024 tightened to 77 bps bid, a trader said.

The 4.3% notes due 2044 headed out wrapped around issuance at 95 bps bid.

The company's 4.75% bonds due 2064 firmed to 126 bps bid, 122 bps offered, a trader said. The 50-year bonds headed out late Monday better at 124 bps bid, 122 bps offered, a trader at another desk said.

Proceeds from the sale will be used for general corporate purposes and to repay debt.

Barclays, BofA Merrill Lynch and J.P. Morgan Securities LLC were the bookrunners.

The funding arm of heavy equipment maker Caterpillar is based in Nashville.

National Retails prices tight

National Retail Properties priced $350 million of 3.9% senior notes (Baa1/BBB/BBB+) due 2024 on Monday with a spread of Treasuries plus 132 bps, according to an informed source and an FWP filed with the SEC.

Pricing was at 99.789 to yield 3.924%.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 135 bps.

National Retail's 3.9% notes due 2024 tightened in secondary trading to 128 bps bid, 127 bps offered, a trader said.

Wells Fargo Securities LLC, Jefferies & Co., RBC Capital Markets LLC, BofA Merrill Lynch, U.S. Bancorp Investments Inc. and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds will be used to repay outstanding debt under the company's credit facility, to fund future property acquisitions and for general corporate purposes.

The real estate investment trust for retail properties is based in Orlando, Fla.

Waste Management new issue

Waste Management priced $350 million of 3.5% senior notes (Baa3/A-/BBB) due 2024 with a spread of Treasuries plus 92 bps, according to an FWP filed with the SEC.

The notes sold at the tight end of the Treasuries plus 95 bps area talk.

Pricing was at 99.748 to yield 3.53%.

Waste Management's 3.5% notes due 2024 traded in the secondary market at 93 bps bid, 90 bps offered, according to a trader late afternoon on Monday.

The notes were seen going out at 90 bps offered, according to a trader at another desk.

The bookrunners were Deutsche Bank Securities Inc., JPMorgan and RBS Securities Inc.

Proceeds will be used to repay borrowings under the company's revolving credit facility.

The notes are guaranteed by Waste Management Holdings Inc.

The waste collection, recycling and disposal company is based in Houston.

Appalachian Power prices 30-years

Appalachian Power priced $300 million of 4.4% 30-year senior notes (Baa1/BBB/), series U, on Monday to yield Treasuries plus 105 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.306 to yield 4.442%.

Appalachian Power's 4.4% 30-year bonds firmed to 103 bps bid, 102 bps offered in the secondary market, according to traders on Monday afternoon.

JPMorgan, Mitsubishi UFJ Securities (USA) Inc. and Wells Fargo Securities were the joint bookrunners.

Proceeds from the sale will be used for general corporate purposes relating to the company's utility business, including the repayment of the company's term credit facility maturing on May 13, 2015.

The Columbus, Ohio-based utility was last in the market with a $275 million issue of one-year floating-rate notes priced at par to yield Libor plus 37.5 bps on Aug. 13, 2012.

USAA new deal

USAA Capital priced $350 million of senior notes (/AA+/) due 2019 on Monday at 45 bps over Treasuries, according to a market source.

Pricing was at the tight end of talk, which was set in the 50 bps over Treasuries area.

BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities and Wells Fargo Securities were the joint bookrunners for the Rule 144A deal.

The issuer offers insurance, banking and credit card services through subsidiaries and is based in San Antonio.

Bank/brokerage CDS rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 65 bps bid, 68 bps offered. Citigroup Inc.'s CDS costs rose 1 bp to 69 bps bid, 72 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 53 bps bid, 56 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 70 bps bid, 74 bps offered. Morgan Stanley's CDS costs eased 1 bp to 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.'s CDS costs rose 1 bp to 83 bps bid, 86 bps offered.

Paul Deckelman contributed to this review.

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