SMBC, Swedbank, UBS, St. Jude among new deals; Westar tightens, trading volumes 'very light'

By Aleesia Forni and Andrea Heisinger

New York, March 21 - A trio of sales from the financial sector came to the high-grade bond market on Thursday along with a substantial offering from St. Jude Medical, Inc. and a few smaller trades from other issuers.

Japan's Sumitomo Mitsui Banking Corp. priced $650 million of five-year bonds, Swedbank AB sold $1 billion of three-year notes and UBS AG brought a $1.25 billion sale of three-year covered bonds.

Sumitomo's sale saw $1.9 billion in demand, a source close to the trade said.

Elsewhere in the market, St. Jude Medical priced $1.6 billion of senior notes due 2023 and 2043.

Kansas-based Westar Energy, Inc. sold $250 million of 30-year mortgage bonds.

There was a Rule 144A sale of $250 million in 10-year senior notes from Healthcare Trust of America Holdings, LP.

The Province of Manitoba priced $500 million of five-year global debentures.

The flow of preferred stock sales did not stop on Thursday, with two new ones announced by Texas Capital Bancshares Inc. and Glimcher Realty Trust.

Texas Capital priced $150 million of $25-par noncumulative perpetual preferreds while Glimcher sold $90 million of cumulative redeemable preferreds.

Sources are predicting a quiet end to the week, with one saying that "we're not seeing anything," while another added that "there could be one."

A syndicate source said that there should be some deals popping up at the top part of the coming week, before tapering off on Wednesday and Thursday ahead of the long Easter holiday weekend.

Trading volumes in the secondary market were "very light" during Thursday's session, one trader said.

"Felt like a Friday," the trader added near the day's close.

The trader quoted Westar Energy's notes 2 basis points better near the end of the day's trading, while another market source saw the notes tighten an additional 2 bps at the market's close.

Investment-grade bank and brokerage credit default swaps costs rose on Thursday.

Bank of America's CDS costs widened 2 bps to 120 bps bid, 125 bid. Citigroup's CDS costs were also 2 bps wider at 102 bps bid, 107 bps offered. J.P. Morgan's CDS costs rose 2 bps to 85 bps bid, 89 bps offered. Wells Fargo's CDS costs widened 2 bps to 66 bps bid, 70 bps offered.

Merrill Lynch's CDS costs rose 1 bp to 95 bps bid, 104 bps offered. Morgan Stanley's CDS costs rose 3 bps to 128 bps bid, 133 bps offered. Goldman Sachs' CDS costs also rose 3 bps to 128 bps bid, 133 bps offered.

Sumitomo brings five-years

Sumitomo Mitsui Banking priced a $650 million offering of 1.8% five-year notes (A1/A+/) at Treasuries plus 105 bps during the day's session, an informed source said.

Initial guidance was in the Treasuries plus 110 bps area. The size was expected to be at least $500 million.

The sale was under Rule 144A and Regulation S.

Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were bookrunners.

Sumitomo was last in the U.S. bond market with a $2 billion sale in three tranches on Jan. 10. That offering included a 1.5% five-year note sold at 77 basis points over Treasuries.

The financial services company is based in Tokyo.

St. Jude does two tranches

St. Jude Medical has sold $1.6 billion of senior notes (Baa1/A/A) in two parts, a source close to the trade said.

A $900 million tranche of 3.25% 10-year notes priced at a spread of Treasuries plus 140 bps. Guidance was in the Treasuries plus 140 bps area.

There was also $700 million of 4.75% 30-year bonds sold at 165 bps over Treasuries. The bonds were talked in the 165 bps to 170 bps range.

BofA Merrill Lynch, Wells Fargo Securities LLC and U.S. Bancorp Investments Inc. were bookrunners.

Proceeds are being used to redeem 3.75% notes due July 14, 2014 and 4.875% senior notes due July 14, 2019, of which there is $1.2 billion total outstanding. They may also be used for general corporate purposes.

St. Jude was last in the U.S. bond market with a $500 million sale of five-year notes on Dec. 1, 2010.

The maker of cardiovascular medical devices is based in St. Paul, Minn.

UBS prices tight

UBS was in the market with a $1.25 billion sale of 0.75% three-year covered bonds (Aaa//AAA) priced at mid-swaps plus 30 bps, or Treasuries plus 46.5 bps, an informed source said.

Initial price talk was in the mid-swaps plus 30 bps to 32 bps range.

Pricing was done under Rule 144A and Regulation S.

Bookrunners were Barclays, Lloyds Securities, Inc., RBC Capital Markets LLC, Santander Investment Securities Inc., UBS Securities LLC and Wells Fargo Securities LLC.

UBS did a $1.5 billion sale of 1.875% three-year covered bonds in the U.S. market on Jan. 19, 2012 at a spread of mid-swaps plus 135 bps.

The financial services company is based in Basel and Zurich, Switzerland.

Swedbank's $1 billion trade

Swedbank priced $1 billion of 1.375% three-year notes (Aaa/AAA/) at mid-swaps plus 46 bps, or Treasuries plus 64.65 bps, a market source said.

Subsequently a trader quoted the notes at 93 bps bid, 90 bps offered, while another source saw the notes close the session at 91 bps bid

BofA Merrill Lynch, Barclays, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were bookrunners.

The sale was done under Rule 144A and Regulation S.

Swedbank was last in the U.S. bond market with a $1 billion sale of five-year notes on Sept. 24, 2012.

The financial services company is based in Stockholm.

Healthcare upsizes

Healthcare Trust of America Holdings tapped the market for an upsized $300 million of 3.7% 10-year senior notes at Treasuries plus 187.5 bps, a source close to the deal said.

The size was increased from $250 million.

The sale was done under Rule 144A and Regulation S.

Bookrunners were J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay $125.5 million of a senior secured term loan, borrowings under a senior revolving credit facility and for general corporate purposes.

The real estate investment trust for medical office building is based in Scottsdale, Az.

Westar's 30-year bonds

Westar Energy was in the market with a $250 million sale of 4.1% 30-year mortgage bonds (A3/A-/A-) priced at Treasuries plus 95 bps, a market source said.

Bookrunners were BofA Merrill Lynch, BNY Mellon Capital Markets LLC and Deutsche Bank Securities Inc.

Proceeds are being used to provide long-term funds to finance an ongoing capital program.

The electric utility is based in Topeka, Kan.

Manitoba sells global

The Province of Manitoba priced $500 million of 1.125% five-year global debentures (Aa1/AA/) at mid-swaps plus 12 bps, or Treasuries plus 35.5 bps, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were CIBC World Markets Corp., HSBC Securities (USA) Inc., National Bank of Canada Financial and RBC Capital Markets LLC.

Proceeds will be used for advances to the Manitoba Hydro Electric Board and for general government programs.

Texas Capital's preferreds

Texas Capital Bancshares sold $150 million of 6.5% series A noncumulative perpetual preferred stock, according to a press release.

Morgan Stanley & Co. Inc., BofA Merrill Lynch and JPMorgan Securities LLC are the joint bookrunning managers.

Texas Capital has applied to list the new preferreds on the Nasdaq Global Select market under the ticker symbol "TCBIP."

Proceeds will be used for general corporate purposes.

Texas Capital is based in Dallas.

Glimcher's preferreds

Glimcher Realty Trust priced $90 million of 6.875% series I cumulative redeemable preferred shares of beneficial interest, a market source reported.

Wells Fargo Securities LLC and BofA Merrill Lynch are the joint bookrunning managers.

Glimcher will apply to list the new issue on the New York Stock Exchange under the ticker symbol "GRTPI."

Proceeds will be used for a partial redemption of the 8.125% series G cumulative redeemable preferred shares of beneficial interest. Any remaining funds will be used for general corporate purposes.

Glimcher is a Columbus, Ohio-based real estate investment trust.

Stephanie N. Rotondo contributed to this review

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