Morgan Stanley, General Mills enter high-grade primary; JPMorgan firms; Verizon rallies

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 21 - Morgan Stanley & Co. Inc., JPMorgan Chase & Co. and General Mills Inc. were among the issuers pricing new deals to kick off the holiday-shortened week.

Morgan Stanley came to market with a $2.75 billion two-part issue of five-year notes in fixed- and floating-rate tranches on Tuesday.

The sale included $750 million of floating-rate notes due 2019 priced to yield Libor plus 85 basis points and a $2 billion tranche of 2% notes due 2019 sold at 95 bps over Treasuries.

General Mills was also in the market, selling $750 million of senior notes sold in two tranches.

There was a $250 million tranche of three-year floaters sold to yield Libor plus 20 bps.

A $500 million issue of 3.65% 10-year notes priced at Treasuries plus 85.

Meanwhile, National Rural Utilities Cooperative Finance Corp. priced an upsized $600 million two-part issue of collateral trust bonds on Tuesday.

The company brought a $300 million tranche of 1.1% collateral trust bonds due 2017 at Treasuries plus 33 bps and a $300 million tranche of 2.15% five-year collateral trust bonds at 53 bps over Treasuries.

In other market action, Canada sold $400 million of floating-rate notes due Jan. 27, 2017

at par to yield Libor minus 8 bps.

JPMorgan also came to market on Tuesday to price $5.25 billion of senior notes in five tranches, though full details were not available at press time.

The sale follows the bank's $2 billion issue of 6.75% series S fixed-to-floating-rate perpetual preferred stock, which priced last week.

FMS Wertmanagement sold a $500 million issue of two-year senior notes on Tuesday at par to yield Libor plus 1 bp.

Blizzard conditions pummeling the east coast may take their toll on the high-grade primary market as the week moves forward.

"With the snowstorm, we had some people headed out early today," a market source said.

Sources had predicted around $25 million for the Martin Luther King holiday-shortened week, though now that number seems somewhat optimistic.

One market source said he is expecting around $15 billion to $20 billion.

Investment-grade bonds ended the day flat to slightly weaker after trading better at the start of the session, according to market sources.

The Markit CDX North American Investment Grade series 21 index eased about 0.5 bps to a spread of 66 bps.

Going out in aftermarket trading, JPMorgan's 4.85% bonds due 2044 tightened more than 2 bps on the offered side, a trader said.

The bank's notes due 2019 traded at 76 bps bid, 74 bps offered, according to a trader.

The notes due 2024 headed out at 113 bps bid, 111 bps offered. The 4.85% bonds due 2044 tightened to 110 bps offered, the trader said.

General Mills' 3.65% notes due 2024 edged 1 bp wider on the bid side in the secondary market.

National Rural's two tranches of notes due 2017 and 2019 and Morgan Stanley's notes due 2019 priced late in the day and were not immediately active in aftermarket trading, a source said.

In other trading, Verizon Communications Inc.'s bonds rallied more than a point on Tuesday following the company's earnings release, according to a market source.

Verizon reported a fourth-quarter profit of $7.92 billion, or $1.76 per share, compared with a loss of $1.93 billion, or $1.48 per share, in the fourth-quarter period of 2012. For the 2013 fiscal year, Verizon reported earnings of $23.55 billion, or $4.00 per share, compared with $10.56 billion, or 31 cents per share, for the year ended 2012.

Morgan Stanley sells two-parter

Morgan Stanley priced a $2.75 billion two-part offering of five-year notes (Baa2/A-/A-) in fixed- and floating-rate tranches on Tuesday, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The bank sold a $750 million issue of floating-rate notes due 2019 at par to yield Libor plus 85 bps.

A $2 billion tranche of 2% notes due 2019 sold at 95 bps over Treasuries, at the tight end of the Treasuries plus 100 bps area talk.

Morgan Stanley & Co. LLC is the bookrunner.

The financial services company is based in New York City.

General Mills' $750 million

General Mills priced a $750 million issue of senior notes in two tranches on Tuesday, according to a market source and a 424B5 filing with the SEC.

The offering included a $250 million tranche of floating-rate notes due 2016 priced at par to yield Libor plus 20 bps.

A $500 million tranche of 3.65% notes due 2024 sold with a spread of Treasuries plus 85 bps, or 99.84, to yield 3.669%.

Going out in aftermarket trading, General Mills' 3.65% notes due 2024 traded at 86 bps bid, 84 bps offered, a trader said.

Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley were the joint bookrunners.

Proceeds will be used for general corporate purposes and to repay a portion of outstanding commercial paper.

The maker of consumer food products is based in Minneapolis.

National Rural upsizes

National Rural sold an upsized $600 million two-part issue of collateral trust bonds (A1/A+/A+) on Tuesday, according to a market source and two separate FWP filings with the SEC.

The sale included $300 million of 1.1% collateral trust bonds due 2017 priced with a spread of Treasuries plus 33 bps, or 99.941, to yield 1.12%.

A second tranche was $300 million of 2.15% five-year collateral trust bonds, which were sold at 53 bps over Treasuries.

Pricing was at 99.957 to yield 2.159%.

J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA) Inc., RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc. and RBS Securities Inc. were the bookrunners.

Proceeds will be used for general corporate purposes, including repayment of short-term debt, primarily consisting of commercial paper, and, along with cash on hand and other funding, to repay $250 million of floating-rate notes due 2014 and $450 million of 4.75% collateral trust bonds due 2014.

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

FMS new issue

FMS Wertmanagement priced $500 million of two-year senior notes (Aaa/AAA/AAA) at par to yield Libor plus 1 bp on Tuesday, according to a market source.

Credit Suisse Securities, Nomura Securities and Societe Generale were the joint bookrunners.

The financial services company is based in Munich.

Canada sells floaters

Canada priced a $400 million issue of floating-rate notes due Jan. 27, 2017 on Tuesday, according to a 424B2 filing with the SEC.

Pricing was at par to yield Libor minus 8 bps.

RBC Capital Markets was the distributor.

Verizon rallies

Verizon's 5.15% notes due 2023 rose to 109.33 on Tuesday from 108.02 on Friday, according to a market source.

Verizon sold $11 billion of the 5.15% notes due 2023 at 99.676 to yield 5.192% as part of a $49 billion eight-part offering priced on Sept. 11.

The telecommunications company is based in New York City.

Bank/brokerage CDS costs flat

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

Bank of America Corp.'s CDS costs were flat at 75 bps bid, 78 bps offered. Citigroup Inc.'s CDS costs were unchanged at 69 bps bid, 72 bps offered. JPMorgan Chase & Co.'s CDS costs ended unchanged at 65 bps bid, 67 bps offered. Wells Fargo & Co.'s CDS costs were flat at 39 bps bid, 41 bps offered.

Merrill Lynch's CDS costs closed unchanged at 77 bps bid, 82 bps offered. Morgan Stanley's CDS costs were flat on the day at 85 bps bid, 88 bps offered. Goldman Sachs Group, Inc.'s CDS costs ended unchanged at 91 bps bid, 93 bps offered.

Paul Deckelman contributed to this review.

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