Bank of New York Mellon, ANZ Banking price bonds; Zions sells preferreds; industrials gain

By Andrea Heisinger

New York, June 11 - The Bank of New York Mellon Corp., ANZ Banking Group Ltd. and Zions Bancorporation priced bonds on Friday to end a bottom-heavy week in the investment-grade market.

Bank of New York upsized its sale to $650 million in five-year note from $500 million, while ANZ Banking sold $300 million of one-year floating-rate notes.

Zions Bank announced early in the day that it had priced $125 million in perpetual resettable preferred stock. The deal had been announced on Tuesday in a filing with the Securities and Exchange Commission.

Most desks had already signed off for the day by mid-afternoon as there wasn't much new deal action.

"We're just going to see how [Monday] ends up," a source said. "We could see a couple deals then, but I doubt it."

The past week took a couple of days to get going, with a clump of new issues pricing toward the end of the week.

Secondary muted

On the secondary side of the market, there wasn't much in the way of new deals to trade, and most of the previous day's sales were small and not seen.

"It was a very, very, quiet day," a trader on the industrial side said. What little action there was was in the financials and oil bonds.

A new three-year bond from John Deere Capital Corp. was trading about 5 to 10 basis points tighter in next-day trading, a trader said. Maxim Integrated Products Inc. also saw its three-year bonds trade about 5 bps tighter at the bid.

Meanwhile, two small issues by Wisconsin Power & Light Co. and Interstate Power & Light Co. were "hardly seen trading" after tightening 5 to 10 bps after pricing the previous day. Both were $150 million, and the small size may explain why they disappeared, a trader said.

Treasuries moved tighter after the previous day when they had been out significantly. The five-year notes were in about 6 bps to yield 2.02% while the 10-year was tighter by 9 bps to yield 3.23%. The 30-year bond was quoted at about 8 bps wider to yield 4.15%.

The Markit Series 14 CDX showed that spreads moved slightly tighter than the previous day, a source said. It was at 125 bps after the market close, which was a 1 bp improvement over the 126 bps quote on Thursday.

Bank of New York upsizes

The Bank of New York Mellon priced an upsized $650 million of 2.95% five-year senior medium-term notes (Aa2/AA-) late in the afternoon to yield Treasuries plus 95 bps, an informed source said.

The size was increased from $500 million, the source said, adding that there "wasn't really any price talk."

Bookrunners were Barclays Capital Inc. and UBS Investment Bank.

The financial services company is based in New York City.

New deals not finished

The summer slowdown may hit later than normal this year due to a backlog of deals created by the volatility from the oil spill in the Gulf of Mexico and a bunch of other negativity.

"We'll probably be a little busier next week," a source said. "We have a couple of weeks until the Fourth [of July], so it will probably slow after that."

Many of the week's deals came out on Thursday, but others may have held off until the coming week to see if volatility has lessened.

"It's calmed down a little, but prices are still kind of high for some issuers," a source said.

ANZ Banking prices floaters

ANZ Banking Group priced $300 million of one-year floating-rate notes (Aa1/AA) by early afternoon at par to yield three-month Libor plus 2 bps, a market source away from the sale said.

The notes were priced under Rule 144A.

The bookrunner was Deutsche Bank Securities.

The financial services company is based in Melbourne, Australia.

Zions Bank sells preferreds

Zions Bancorporation priced $125 million, or 5 million shares, of 11% perpetual resettable non-cumulative preferred stock at $25 per share, according to a press release from the company.

The preferreds (/B/BB+) are non-callable before June 15, 2012. They can be redeemed starting on that date and on every second anniversary after. If they are not redeemed, the dividend rate will reset on every second anniversary to equal the two-year Treasury plus 10.22%.

The preferreds have an over-allotment option for 30 days to purchase up to $18.75 million, or 750,000 shares.

Bookrunners were Deutsche Bank Securities, JPMorgan, Macquarie Capital and Zions Direct Inc.

Proceeds are being used for general corporate purposes and may be invested in interest-bearing investment-grade securities in the short term.

The financial holding company is based in Salt Lake City.

Industrial trades light

There was "not much happening" on the industrial side of the secondary market, a trader said late in the afternoon.

"I think everybody took a breather today," he said.

There were virtually no trades in two of the previous day's sales, and a financial bond from the Bank of New York Mellon priced late enough in the day to not really hit trading.

"Everybody's happy to have this week over with," the trader said. "It was a rough one. After about 10 this morning, no one was really doing anything."

John Deere notes tighten

The new 1.875% notes due 2013 from John Deere Capital were doing better in next-day trading, a source said. They were not quoted the previous day because they priced late in the session.

They were sold at 68 bps over Treasuries and were quoted at 62 bps bid and 57 bps offered, the source said.

Maxim three-year moves in

A first-time bond issue by analog circuit maker Maxim Integrated Products moved tighter in next-day trading after being sold late on Thursday.

The 3.45% notes due 2013 were quoted at a bid of 220 bps, a source said, after pricing at 225 bps over Treasuries.

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