Nissan Motor Acceptance, Nordic, KfW sell bonds, Validus plans offering; new deals tighten

By Andrea Heisinger and Cristal Cody

New York, Jan. 20 - Nordic Investment Bank, Nissan Motor Acceptance Corp. and KfW priced bonds in the high-grade market on Wednesday.

Two other sales were announced, but had not priced at press time.

Vehicle leasing and financing company Nissan Motor Acceptance priced $1 billion of notes with three- and five-year maturities.

Nordic Investment Bank was one of the first to price its deal, selling $1 billion of three-year global notes by early afternoon.

Germany's KfW also got its offering done early, pricing a much larger $4 billion in 10-year notes.

Large banks continued to announce earnings, with Bank of America Corp. posting a loss, and Morgan Stanley making a profit but missing estimates.

The market was described as "the same as yesterday, basically," by a syndicate source late in the day.

Validus Holdings, Ltd. announced a sale of 30-year bonds that was originally expected to price Wednesday, but instead held for Thursday.

Also announced but not priced was a deal by Westpac Securities NZ Ltd. The New Zealand-based company is expected to price its three-year notes on Thursday.

The focus of the high-grade market will be on earnings for "who knows how long," a market source said.

High-grade secondary traders found a few offerings to chew on but nothing that was terribly exciting on Wednesday.

"It was a pretty quiet day," one trader said. "With the equities sell-off, it was relatively quiet. Spreads were wider and things were weaker across the board."

Treasuries tightened as equities took a downturn on Wednesday.

The yield on the 10-year Treasury note tightened 4 bps to 3.65%. The 30-year Treasury bond yield firmed 5 bps to 4.54%.

The CDX Series 13 North American high-grade index, according to a market source, eased 1 bp to a mid bid-asked spread level of 85 bps.

Meanwhile, a source said Trace volume was "decent at just over $8 billion so far. Spreads are mixed depending on the sector."

According to one market source, overall dollar volume in high-grade trading ended up more than 10% to $13 billion.

Meanwhile, sources on Wednesday saw secondary trading in new offerings from Simon Property Group, LP, Nissan Motor Acceptance, Bank of Nova Scotia and Trans-Allegheny Interstate Line Co., with most of them trading better than where they priced.

Nissan funding arm prices two tranches

Nissan Motor Acceptance priced $1 billion of notes in two tranches by mid-afternoon, an informed source said.

The sale went overnight from Tuesday in order to offer the notes to a more diverse group of investors, the source said.

The $250 million of 3.25% three-year notes sold at Treasuries plus 195 bps. The tranche was sold tighter than guidance in the 212.5 bps area, with a margin of plus or minus 12.5 bps.

A $750 million tranche of 4.5% five-year notes priced at a spread of Treasuries plus 220 bps. This tranche also came in below price talk in the 237.5 bps area, plus or minus 12.5 bps.

The deal was priced under Rule 144A.

Bank of America Merrill Lynch, Citigroup Global Markets and Deutsche Bank Securities ran the books.

The financing and leasing company for Nissan vehicles is based in Irving, Texas.

Watching earnings

All eyes were on earnings reports from Bank of America and Morgan Stanley in the morning. The same will be true of Thursday, as Goldman Sachs & Co. announces its highly anticipated numbers.

"That's the news this week," a market source said of the earnings announcements. "Other than that it's pretty dull."

Goldman is expected to report a profit for both 2009 and the last quarter. Bank of America's loss of $2.2 billion for 2009 and $5.2 billion for the fourth quarter didn't affect the market much, said a syndicate source who worked on two of the day's sales.

"I didn't see anything," he said. "It's kind of like Citi yesterday - it was expected."

One syndicate source said his desk had one deal for the rest of the week, but added that it "might be put off until next week."

The focus will be on bank and company earnings for the foreseeable future.

"It's all earnings, all the time," he said. "There's not much else to talk about."

Nordic sells global notes

Finland-based Nordic Investment Bank sold $1 billion of 1.625% three-year global notes early in the day at 99.752, according to an FWP filing with the Securities and Exchange Commission.

The sale went overnight from Tuesday to include more investors from Asia and Europe, a source said.

Citigroup Global Markets, Deutsche Bank Securities, HSBC Securities and J.P. Morgan Securities ran the books.

The lender to Nordic countries is based in Helsinki.

KfW offers $4 billion

KfW sold $4 billion of 4% 10-year global notes in the morning at 99.657, according to an FWP filing with the SEC.

This sale also went overnight from Tuesday to include more investors from Asia and Europe, a source said.

Bookrunners were Goldman Sachs & Co., J.P. Morgan Securities and UBS Investment Bank.

The government-owned development bank is based in Frankfurt, Germany.

Westpac to sell short bonds

Westpac Securities NZ is expected to sell $500 million of three-year notes on Thursday, a market source away from the deal said.

Market sources said they were surprised the deal did not price during the day on Wednesday. One source said "maybe it's pricing later tonight."

The deal is being done under Rule 144A.

Goldman Sachs & Co. is running the books.

The unit of financial services company Westpac New Zealand Ltd. is based in Auckland, New Zealand.

Validus plans 30-year bonds

Validus Holdings, Ltd. announced a sale of $250 million in 30-year senior unsecured notes on Wednesday, with pricing expected on Thursday, an informed source said.

The source did not give a reason for the delay.

Goldman Sachs & Co., Deutsche Bank Securities and J.P. Morgan Securities are bookrunners.

Proceeds will be used for general corporate purposes.

The issuer provides reinsurance and insurance through subsidiaries and is based in Bermuda.

Nissan firms

In secondary trading, the 4.5% notes due 2015 that Nissan Motor Acceptance priced earlier on Wednesday had tightened 12 bps by late in the day, a trader said.

The notes were offered at 209 bps over Treasuries. Near the market's close, a trader said "there's a 208 bid" for the notes, which priced at Treasuries plus 220 bps.

The other tranche, Nissan's 3.25% notes due 2013, were seen unchanged late Wednesday after the notes priced at Treasuries plus 195 bps.

Simon Properties tightens

Meanwhile on Wednesday, the previous day's $2.25 billion offering from Simon Property Group tightened in the secondary, a trader told Prospect News.

Simon Property's notes due 2020 were seen at 190 bps bid, 198 bps offered, the trader said.

"Some of the 30-years were in the 200, 195 area."

The 10-year notes priced at Treasuries plus 200 bps, while the bonds due 2040 priced at Treasuries plus 220 bps.

Another trader quoted Simon's 5.65% notes due 2020 early Wednesday at 192 bps bid, 188 bps offered. The notes were seen "later" at 192 bps. The notes priced on Tuesday at Treasuries plus 200 bps.

Also, Simon's 6.75% bonds due 2040 were reported at 203 bps bid, 198 bps offered.

In addition, the 4.2% notes due 2015 were quoted at 162 bps bid, 157 bps offered. The notes priced at a spread of 180 bps over Treasuries.

The Indianapolis-based company owns and develops retail real estate properties.

Trans-Allegheny narrows

Trans-Allegheny Interstate Line's notes tightened in secondary trading a day after the Greensburg, Pa.-based company priced $450 million in 4% senior notes due 2015.

The notes, which priced at Treasuries plus 162.5 bps, were quoted "this morning at 160 bid, 154 offered," a trader said.

The company is a subsidiary of utility holding company Allegheny Energy, Inc.

Scotia tighter in secondary

Also on Wednesday, a trader said the Bank of Nova Scotia's new notes tightened.

The 2.25% notes due 2013 priced on Tuesday at a spread of 83 bps over Treasuries and were seen at 70 bps late Wednesday.

In addition, according to the trader, the Toronto-based financial services company's 3.4% notes due 2015 tightened to 88 bps on Wednesday after the notes were sold at Treasuries plus 98 bps.

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