DuPont, Disney, Arrow Electronics, National Fuel hit primary; General Electric bonds active

By Aleesia Forni and Andrea Heisinger

New York, Feb. 12 - Corporate issuers from a variety of sectors were in Tuesday's high-grade market, including E.I. du Pont de Nemours & Co., Walt Disney Co., Arrow Electronics, Inc. and National Fuel Gas Co.

DuPont sold $2 billion in maturities of 2023 and 2043. It was the chemical company's first bond sale since March of 2011.

Disney tapped the market for $800 million of two-year floating-rate notes. The size was increased from $500 million.

New York-based Arrow Electronics sold $600 million of five-year notes and 10-year notes - its first offering since 2010. The size was increased from $500 million, a source said.

National Fuel Gas priced $500 million of 10-year notes to repay debt. The size was increased from $350 million on roughly $2 billion of demand from investors.

The offering did not include a "do not grow" provision, a source close to the sale said at midday, adding that "if the pricing is right, we could see it change."

American Honda Finance Corp. sold $750 million of five-year notes in a private offering that was upsized from $500 million.

A sale of five-year notes was announced by Kommunalbanken AS. Pricing is expected on Wednesday, a source said.

A $150 million sale of $25-par perpetual preferred stock was done by Cullen/Frost Bankers Inc.

Issuers were not rushing to price bonds ahead of Tuesday night's State of the Union address by president Barack Obama, a source who worked on at least one of the day's trades said.

"There wasn't really any negative news," the source said. "I don't think that was why anyone priced bonds today, that I heard."

Wednesday should see some activity, but it's likely not to see any corporate trades to match DuPont's or Monday's $6 billion sale from Vodafone Group plc in size.

"I can't imagine it being an action-packed day," said one syndicate source of Wednesday.

The Markit CDX Series 18 North American Investment Grade index tightened 3 basis points to a spread of 87 bps.

The secondary market saw General Electric Co.'s bonds trade actively on Tuesday, with the company's 5.25% notes due 2017 closing the session 2 bps wider.

In bank and financial paper, Bank of America's 7.375% notes due 2014 closed the session 12 bps tighter, while Goldman Sachs' bond due 2018 firmed 1 bp on the day.

Investment-grade bank and brokerage credit default swaps costs declined on Tuesday.

Bank of America's CDS costs tightened 4 bps to 120 118 bid, 122 bps offered. Citi's CDS costs were 1 bp tighter at 114 bps bid, 118 bps offered. J.P. Morgan's CDS costs declined 2 bps to 84 bps bid, 86 bps offered. Wells Fargo's CDS costs tightened 2 bps to 74 bps bid, 76 bps offered.

Merrill Lynch's CDS costs were 4 bps tighter at 118 bps bid, 123 bps offered. Morgan Stanley's CDS costs declined 7 bps to 146 bps bid, 150 bps offered. Goldman Sachs' CDS costs firmed 6 bps to 136 bps bid, 140 bps offered.

DuPont's $2 billion trade

E.I. du Pont de Nemours sold $2 billion of notes (A2/A/A) in two tranches, according to a market source and FWP with the Securities and Exchange Commission.

There was $1.25 billion of 2.8% 10-year notes priced at a spread of Treasuries plus 82 bps. Pricing was at the low end of talk in the 85 bps area.

A second part was $750 million of 4.15% 30-year bonds sold at 97 bps over Treasuries. Pricing was at the tight end of guidance in the 100 bps area.

Active bookrunners were Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

Proceeds are being used for general corporate purposes and to repay commercial paper and all or a portion of $250 million of 4.125% notes due March 6 and $750 million of 5% notes due July 15, 2013.

DuPont was last in the U.S. bond market with a $2 billion trade in four tranches on March 22, 2011. That offering included a 4.25% 10-year note priced at Treasuries plus 95 basis points.

The chemical company is based in Wilmington, Delaware.

Disney sells floaters

Walt Disney sold $800 million of two-year floating-rate notes (A2/A/A) at par to yield Libor minus 1 bp, a market source said.

The size of the offering was increased from $500 million.

Price talk was in the Libor flat area, with the notes pricing below that level.

Bookrunners were Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc. and RBC Capital Markets LLC.

Proceeds are being used for general corporate purposes, including repayment of short-term debt.

Disney was last in the U.S. bond market with a $3 billion trade in four tranches on Nov. 27, 2012.

The entertainment and media company is based in Burbank, Calif.

National Fuel's $500 million

National Fuel Gas priced an upsized $500 million of 3.75% 10-year notes (Baa1/BBB/BBB+) to yield a spread of Treasuries plus 180 bps, an informed source said.

There were price whispers in the low 200 bps area with revised guidance in the 185 bps area, plus or minus 5 bps, the source said.

The size was increased from $350 million.

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

Proceeds are being used for general corporate purposes, including refunding $250 million of 5.25% notes due in March and reducing short-term debt.

National Fuel was last in the U.S. bond market with a $500 million offering of 4.9% 10-year notes priced at 295 basis points over Treasuries on Nov. 28, 2011.

The diversified energy company is based in Williamsville, N.Y.

Arrow Electronics upsizes

Arrow Electronics priced an upsized $600 million of senior notes (Baa3/BBB-/BBB-) in two maturities, a market source said.

The size was increased from $500 million, the source said.

The sale included $300 million of 3% five-year notes priced at a spread of Treasuries plus 225 bps. A $300 million tranche of 4.5% 10-year notes sold at 262.5 bps over Treasuries.

BofA Merrill Lynch and J.P. Morgan Securities LLC were active bookrunners.

Proceeds are being used to refinance outstanding 6.875% notes due July 1 and for other general corporate purposes, including acquisitions.

Arrow last tapped the U.S. bond market in a $500 million sale in two tranches on Oct. 29, 2010. The trade included a 3.375% five-year note priced at 230 basis points over Treasuries and a 5.125% 10-year note sold at Treasuries plus 255 bps.

The maker of electronic components and enterprise computing solutions is based in Melville, N.Y.

American Honda's five-years

American Honda Finance sold $750 million of 1.6% five-year notes in a private offering via Rule 144A and Regulation S, an informed source said.

The size of the trade was increased from $500 million, the source said.

The notes (A1/A+/) were sold at a spread of Treasuries plus 75 bps.

Bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBS Securities Inc.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Cullen/Frost's preferreds

Cullen/Frost Bankers reportedly priced $150 million of 5.375% series A noncumulative perpetual preferred stock, a market source said.

The deal was expected to be at least $100 million, with price talk around 5.375%. Pricing was at par of $25.

A trader noted that there was no selling group on the deal.

The trader quoted the issue at $24.73 bid, $24.85 offered in the gray market as of midday.

Morgan Stanley & Co. Inc., Goldman Sachs & Co. and UBS Securities LLC are the joint bookrunning managers.

When declared, dividends will be paid on the 15th of March, June, September and December, beginning on June 15.

The preferreds become redeemable on or after March 15, 2018 or in whole within 90 days of a regulatory capital treatment event. The redemption price is par plus accrued dividends.

The San Antonio-based financial institution has applied to list the new preferreds on the New York Stock Exchange under the ticker symbol "CFRPA."

Proceeds will be used to repurchase stock as it pertains to an accelerated share repurchase agreement.

Kommunalbanken preps

Norway's Kommunalbanken announced a sale of five-year notes, with pricing expected to go overnight to Wednesday, an informed source said.

The notes (Aaa/AAA/AAA) are being sold under Rule 144A and Regulation S.

Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC are bookrunners.

The government-funded lender to municipalities is based in Oslo.

GE weaker

In trading, General Electric's 5.25% notes due 2017 were trading 2 bps wider at 75 bps bid near the end of Tuesday's session.

The company sold $4 billion of the notes at a spread of 140 bps over Treasuries in November 2007.

Bank of America tightens

Bank of America's 7.375% notes due 2014 firmed 12 bps to 85 bps bid during the session.

The bank priced $3 billion notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

Goldman Sachs firms

Meanwhile, Goldman Sachs' bond due 2018 tightened 1 bp to 161 bps bid on Tuesday.

The bank priced $1.5 billion 6.15% 10-year bonds in April 2008 at Treasuries plus 237.5 bps.

Stephanie N. Rotondo contributed to this review

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