Hartford, Shell, JPM, Credit Suisse, Axis issue bonds; traders see new bonds, banks activity

By Andrea Heisinger

New York, March 18 - JPMorgan Chase & Co., Credit Suisse AG, New York branch, Hartford Financial Services Group Inc., Shell International Finance BV and Axis Specialty Finance LLC all tapped the bond market on Thursday as demand for high-quality bonds continued.

There remains a lot of cash waiting to flow into the market. This has been a trend in recent weeks, resulting in upsized deals and highly oversubscribed books.

Hartford Financial was the last to price its $1.1 billion of bonds in three tranches. The deal consisted of $300 million in five-year notes, $500 million of 10-year notes and $300 million of 30-year bonds.

Energy and petrochemical company Shell sold $4.25 billion in three tranches, making it the largest deal for the day and one of the biggest so far in 2010. The deal was $2 billion of three-year notes, $1.25 billion of 10-year notes and $1 billion of 30-year bonds.

A $2.75 billion sale in two tranches from JPMorgan Chase was initially announced in one tranche of five-year notes, but was reallocated to add a tranche of 10-year notes. The $1.25 billion sale of five-year notes was a reopening of an issue from 2009.

Credit Suisse sold $1.5 billion of five-year notes through its New York branch. Both this sale and the JPMorgan one came as demand for bank paper in the secondary market has been strong and has caused bonds in the sector to tighten.

A $500 million sale of 10-year guaranteed notes from Axis Specialty Finance was announced in the afternoon and priced under the radar - long amidst the larger sales.

New bonds flowed into the secondary market that has been mostly fixed on bank and financial bonds lately.

None of the new deals dazzled in trading, with most hovering around where they priced, or at slightly tighter levels.

The Hartford bonds priced too late to see trading action, but were improved in the gray.

The new bonds from Shell were all over the board, while JPMorgan Chase and Credit Suisse Securities bonds were improved.

Three bonds priced the previous day by Rockies Express Pipeline LLC were unchanged to tighter, while SLM Corp. lost some of the gains it had made on its split-rated 10-year notes.

A trader said that "other than the new issues, it seemed lethargic" in trading for the day.

The most-traded bonds were scattered, with an outstanding Shell bond popping up and two notes from Bank of America Corp. remaining popular.

Hartford prices bonds to repay TARP

Insurance and financial services company Hartford Financial Services Group priced $1.1 billion of senior notes (Baa1/A/BBB+) in three tranches late in the day, an informed source said.

The deal priced well after 5 p.m. E.T.

The $300 million of 4% five-year notes priced at a spread of Treasuries plus 160 bps.

A $500 million tranche of 5.5% 10-year notes sold 185 bps over Treasuries.

The $300 million of 6.625% 30-year bonds priced at a spread of 205 bps over Treasuries.

They all priced at the tight end of price talk, which was 5 bps higher for each tranche, a market source said.

Goldman Sachs & Co. and J.P. Morgan Securities were active bookrunners.

The Hartford, Conn.- based company plans to use $665 million of the proceeds to pre-fund the maturities of $275 million of notes due on June 15, and $400 million of notes due Oct. 15, 2011. The remaining $425 million, together with the proceeds of common stock and depository share offerings, will be used to repurchase Series E preferred stock from the U.S. Treasury Department.

Shell sells three tranches

Shell International Finance sold $4.25 billion of guaranteed senior notes (Aa1/AA/AA+) in three tranches late in the day, a market source said.

They are guaranteed by Royal Dutch Shell plc.

The $2 billion tranche of 1.875% three-year notes priced at a spread of Treasuries plus 42 bps.

The $1.25 billion of 4.375% 10-year notes sold at Treasuries plus 22 bps.

A $1 billion tranche of 5.5% 30-year bonds priced to yield Treasuries plus 95 bps.

Barclays Capital, Credit Suisse Securities and RBS Securities were bookrunners.

Proceeds are being used for general corporate purposes.

The energy and petrochemical company is based in The Hague, The Netherlands.

Primary perks up

Bond prices and ready cash led to a full primary on Thursday, making it the busiest day of the week yet.

It's unlikely that Friday will see as many deals, but there could be one or two, feeding off the momentum of the previous day, a source said.

"I don't know of anything definite," he said.

The coming week is also looking to have at least a couple of busy days, according to a syndicate source who said he had a "few things" coming up.

"Some could be sizeable," he said.

As for why there were several sizeable deals for the day when the previous day's had been lacking, a market source said he had "no idea."

"The market's good - there are good levels," he said. "Prices are as low as they're going to get."

The Hartford sale was expected, as it was announced on Tuesday that the company planned to issue bonds as well as common stock and convertibles in order to repay bailout money to the government.

Shell issued a large sale at the same time in 2009, and the financials were likely "feeding off the good bank vibe," a source said.

Bank spreads have been continuing to tighten in the secondary market and have seen favorable headlines recently.

The reopening of five-year notes from JPMorgan priced about 25 bps better than the original notes that priced in September of 2009.

JPMorgan prices new bond, reopens another

JPMorgan Chase sold $2.75 billion of notes (Aa3/A+/AA-) in two tranches, a source away from the deal said.

The sale was originally announced as only the five-year notes.

The bank reopened its issue of 3.7% five-year notes to add $1.25 billion. They priced to yield Treasuries plus 110 bps. Total issuance for the notes is $2.75 billion, including $1.5 billion priced on Sept. 15, 2009, at Treasuries plus 135 bps.

A $1.5 billion tranche of 4.95% 10-year notes sold at a spread of Treasuries plus 127.5 bps.

J.P. Morgan Securities ran the books.

The financial services company is based in New York City.

Credit Suisse sells $1.5 billion

Credit Suisse AG, through its New York branch, priced $1.5 billion of 3.5% five-year senior unsecured notes (Aa1/A+/AA-) to yield Treasuries plus 112.5 bps.

The deal was both whispered and launched "literally right on top of where it priced," the source said.

Credit Suisse Securities ran the books.

Proceeds are being used for general corporate purposes, including the possible refinancing of existing debt outside Switzerland.

The financial services company is based in Zurich, Switzerland.

Axis Specialty sells 10-year quietly

Axis Specialty Finance offered $500 million of 5.875% 10-year senior unsecured notes (Baa1/A-) quietly at 225 bps over Treasuries, a source close to the sale said.

They are guaranteed by Axis Capital Holdings Ltd.

Bookrunners were Barclays Capital, Deutsche Bank Securities and Wells Fargo Securities.

Proceeds will be used for general corporate purposes.

The insurance and reinsurance company has its U.S. operations based in Alpharetta, Ga.

New Shell bonds trade unchanged

The three tranches of notes priced late in the day by Shell International Finance were mostly unchanged to slightly better once hitting the secondary, a source said.

A tranche of 1.875% notes due 2013 priced at 42 bps over Treasuries, and then tightened to 36 bps bid, 33 bps offered. Later, they gave up some gains and were quoted at 38 bps bid, 34 bps offered.

The 4.375% notes due 2020 priced at 77 bps over Treasuries and were initially tighter at 76 bps bid, 75 bps offered. They were later back to the pricing level of 77 bps bid, 74 bps offered.

The longest bond, a 5.5% due 2040, was also the poorest performer. It sold at 95 bps and was slightly wider at first at 96 bps bid, 93 bps offered. Later, they were at 95 bps bid, 92 bps offered.

An outstanding 1.3% bond due 2011 from Shell was also seen as one of the most actively-traded bonds of the day as of mid-afternoon.

Hartford bonds firm in gray

The new bonds from Hartford were not seen trading in the secondary due to the lateness of pricing, but they were somewhat improved in the gray, a trader said.

The 4% bond due 2015 was quoted at an offer of 155 bps after selling at 160 bps over Treasuries.

The tranche of 5.5% notes due 2020 was sold at 185 and was improved at an offer of 177 bps.

The 6.625% due 2040 also tightened slightly to 202 bps bid, 198 bps offered. It priced at 205 bps over Treasuries.

JPMorgan bonds offered tighter

A new bond and a reopened one from JPMorgan Chase each were offered at spreads tighter than where they priced, a trader said.

The reopened 3.7% note due 2015 was offered at 98 bps after being priced at 110 bps over Treasuries.

A new 4.95% bond due 2020 was priced at 127.5 bps and was being offered at 122 bps.

Credit Suisse five-year trades better

A new 3.5% bond due 2015 from Credit Suisse was one of the strongest performers of the new crop of bonds on Thursday. It was priced early in the afternoon at 112.5 bps, and a trader quoted it later at an offer of 101 bps.

Rockies Express bonds give up gains

Three notes priced on Wednesday by Rockies Express Pipeline were mostly wider than where they had traded the previous day, but were still tighter than where they priced.

A 3.9% note due 2015 sold at 155 bps and was trading at 147 bps bid, 140 bps offered. It had tightened to 140 bps on Wednesday.

The 5.625% bond due 2020 was sold at 200 bps over Treasuries and was trading unchanged on Thursday at 200 bps bid, 197 bps offered. They had tightened to 195 bps bid, 190 bps offered the previous day.

The third tranche of 6.875% notes due 2040 were trading at an offer of 227 bps, and priced at 232 bps over Treasuries.

SLM bond moves out

The split-rated 8% bond due 2020 priced Wednesday by SLM Corp., otherwise known as Sallie Mae, had given up some of the previous gains. It priced at 98.318, with a trader quoting it at a bid of 97.5 bps and an offer of 97.875.

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