Baxter, MeadWestvaco, HSBC Finance offer notes; new industrials improve, financials struggle

By Andrea Heisinger

New York, Aug. 17 - Deals from Baxter International, Inc. and MeadWestvaco Corp. kicked off the week. The latter was a split-rated sale that was run off the high-grade desk, a syndicate source said.

There was also a deal from HSBC Finance Corp., as part of the financial services company's note program.

Two of the new bonds showed signs of improvement once freed for trading, traders said.

The new Baxter was a little better, with MeadWestvaco making a solid gain. There was little volume on the financial side of the secondary, at trader in that sector said.

Spreads edged wider by late in the day as Treasury yields came in, a source said.

The five-year note was in 10 basis points to 2.4%, with the 10-year note 11 bps tighter at a 3.46% yield.

Baxter offers 10-year

Diversified health care company Baxter International priced $500 million 4.5% 10-year senior notes at Treasuries plus 105 bps.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and RBS Securities Inc.

Proceeds are going for general corporate purposes, including refinancing of debt.

The company is based in Deerfield, Ill.

MeadWestvaco's split-rated bond

MeadWestvaco priced $250 million split-rated 7.375% 10-year notes (Ba1/BBB/) at Treasuries plus 400 bps, an informed source said.

A source on a high-yield syndicate desk said the sale likely didn't have much interest from the junk side. A source close to the sale confirmed it was run exclusively on the high-grade side.

Active bookrunners were Bank of America Merrill Lynch and Barclays Capital, with Citigroup Global Markets Inc. and UBS Investment Bank as passive books.

Proceeds will be used to purchase for cash up to the maximum tender amount of 2012 notes tendered.

The packaging company is based in Glen Allen, Va.

Week starts out dull

New offerings were in short supply Monday, especially when compared to a week ago when a glut of sales hit the primary at the start of the week.

A syndicate source at a smaller desk said it will likely "not pick up a whole lot" for the remainder of the week.

"What we saw [today] was pretty representative," he said of what issuance will look like.

"Baxter was pretty good, but it was small," the source added.

Another syndicate source from a larger desk said he wasn't seeing a lot ahead on the calendar, but "a fair amount of smaller deals."

Those priced Monday didn't crack the $500 million mark, and both priced fairly early and effortlessly.

A source who worked on MeadWestvaco called it a "solid" sale.

"[There's] not much to say about it," he said. "It was a pretty good level."

The source did not know how much interest there was on the junk side of the split-rated offering.

HSBC Finance offers two tranches

HSBC Finance priced $90.846 million senior unsecured notes in two tranches, according to a 424B3 filing with the Securities and Exchange Commission.

The sale consisted of an $81.048 million tranche of 4.5% three-year notes and a $9.798 million tranche of 4.75% five-year notes.

Joint lead managers and agents were Bank of America Merrill Lynch, HSBC Securities and Incapital LLC.

The U.S. branch of the London-based financial services company is based in Mettawa, Ill.

Baxter bond creeps tighter

Baxter International's new 4.5% bond due 2019 was slightly better once freed for trading late in the day, a trader said.

It priced early in the day at 105 bps over Treasuries and was quoted at 102 bps bid, 96 bps offered.

MeadWestvaco 10-year improves

A new 7.375% note due 2019 from packaging company MeadWestvaco was tighter at 389 bps offered, a trader said. The split-rated bond was sold at 400 bps over Treasuries.

Raymond James bounces back

A recent bond from Raymond James Financial, Inc. was improved after widening from its pricing level, a trader in the financial sector said late Monday.

The 8.6% due 2019 was priced at 500 bps over Treasuries and was 5 to 10 bps better at 495 bps bid, 490 bps offered, he said. This was a rebound from Friday's quote of 502 bps bid, 498 bps offered.

Volume was light for the day, the trader added.

CVS, Bank of America bonds top trading

A short floating-rate bond from pharmacy and health care store chain CVS Caremark Corp. was seen at the top of trading early Monday, a trader said.

The bond was a floater due 2010. CVS Caremark was in the news Monday with an Associated Press story about the company spending $2 million to lobby the government about drug and health care issues in the second quarter.

Coming up behind the CVS bond in trading was one from Bank of America Corp. The financial services giant's 7.625% note due 2019 was being heavily traded. The company was in the news for its credit-card defaults dropping in July.

Danaher, Kroger bonds make moves

Outstanding bonds from Danaher Corp. and grocery store operator Kroger Co. were among those making the biggest moves by late afternoon.

A 5.4% bond due 2019 from Danaher advanced more than 20 bps from the previous week. It was in the news for getting a 10% stake in dental products company Align Technology Inc. after settling a patent dispute with a Danaher subsidiary.

Kroger's move was for the worse, with its 7.5% bond due 2014 widening a little more than 25 bps from a week ago. The move was similar to bonds from several financial names like Bank of America, Citigroup Inc. and Morgan Stanley.

Bank, broker CDS stay wider

Credit-default swaps for bank and brokerage names were 5 to 15 bps worse than the previous day, a trader said. The range was true across the board, he said.

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