BP, Ralph Lauren, Standard Chartered hit primary; new deals trade better in secondary market

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 23 - BP Capital Markets plc, Ralph Lauren Corp., Standard Chartered Bank and Ventas Realty LP were among the issuers to bring new deals to Monday's primary session.

The day's largest deal came from BP, which sold a three-part $2.4 billion offering.

The company sold $750 million of five-year floaters at par to yield Libor plus 63 basis points and $900 million of 2.241% five-year notes at Treasuries plus 80 bps.

There was also a $750 million tranche of 3.994% 10-year notes sold at Treasuries plus 130 bps.

Both fixed-rate tranches sold at the tight end of talk.

Standard Chartered also came to market on Monday, pricing a $1 billion 5.2% subordinated note at Treasuries plus 250 bps, according to a market source.

The notes priced at the tight end of talk.

Meanwhile, Ventas sold $850 million of senior notes during the session.

The two-part offer included $550 million of 1.55% notes due 2016 sold at Treasuries plus 90 bps and $300 million of 5.7% 30-year bonds priced at 195 bps over Treasuries.

In another new deal, Ralph Lauren priced a $300 million offering of 2.125% senior notes with a spread of 68 bps over Treasuries.

Elsewhere on Monday, preferred stocks were "holding in well," a trader said during the session.

The primary market was continuing to show signs of life as Allstate Corp. announced plans to sell at least $200 million of series C fixed-rate noncumulative perpetual preferreds.

In the secondary space, Citigroup Inc. preferreds were dominating trading with reports that the company's third-quarter earnings - which are slated to be released on Oct. 15 - could include a decline in bond-trading revenue.

New issues priced in the high-grade bond market on Monday traded better in the aftermarket late in the day, sources said.

Ventas Realty's two tranches tightened 6 bps to 7 bps as the session closed, according to a trader.

"BP is two [bps] better," one trader said.

Another trader saw BP's fixed-rate tranches 1 bp to 2 bps tighter going out.

Ralph Lauren's 2.125% notes traded about 1 bp better on the bid side, a trader said.

The Markit CDX North American Investment Grade series 21 index ended the day unchanged at a spread of 80 bps.

BP prices tight

In primary action on Monday, BP Capital Markets priced a $2.4 billion three-part offering of notes, according to a market source.

The deal included $750 million of five-year floating-rate notes priced at par to yield Libor plus 63 bps.

There was also $900 million of 2.241% five-year notes priced at par with a spread of Treasuries plus 80 bps.

A 10-year tranche of $750 million of 3.994% 10-year notes sold with a spread of Treasuries plus 130 bps.

Pricing was at par.

BP's notes traded 1 bp to 2 bps better in the secondary market, according to traders.

The 2.241% notes firmed to 78 bps bid, 77 bps offered, one trader said. The 3.994% notes tightened to 129 bps bid, 128 bps offered.

Proceeds will be used for general corporate purposes.

J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. and HSBC Securities (USA) LLC are the joint bookrunners.

The unit of oil company BP plc is based in London.

Standard Chartered prices

Standard Chartered priced $1 billion of 5.2% subordinated notes due 2024 with a spread of Treasuries plus 250 bps, according to a market source.

The notes priced at the tight end of talk.

Pricing was at 99.912 to yield 5.212%.

The deal was done under Rule 144A and Regulation S.

BofA Merrill Lynch, Barclays, Deutsche Bank Securities Inc. and Standard Chartered were the joint bookrunners.

The bank and financial services company is based in London.

Ventas Realty's two-parter

Also on Monday, Ventas came to market selling an $850 million two-tranche issue of senior notes, according to a filing with the Securities and Exchange Commission.

The company sold $550 million of 1.55% senior notes due 2016 with a spread of Treasuries plus 90 bps, or 99.91 to yield 1.581%.

There was also a $300 million tranche of 5.7% 30-year bonds priced at 195 bps over Treasuries.

The bonds sold at 99.628 to yield 5.726%.

Ventas Realty's 1.55% notes due 2016 tightened to 83 bps bid, 81 bps offered, according to a trader. The 5.7% bonds due 2043 firmed to 189 bps bid.

BofA Merrill Lynch, Goldman Sachs, JPMorgan, UBS Securities LLC, Barclays, Credit Agricole Securities (USA) Inc. and Morgan Stanley & Co. LLC were the joint bookrunners.

Proceeds will be used to repay debt under the company's unsecured revolving credit facility and for working capital and other general corporate purposes, including the funding of future acquisitions or investments.

The notes are guaranteed by Ventas, Inc.

The real estate investment trust for housing and health care properties is based in Chicago.

Ralph Lauren's $300 million

There was also a $300 million offering of notes from Ralph Lauren. The company sold the 2.125% five-year senior notes with a spread of Treasuries plus 68 bps, according to an FWP filing with the SEC.

Pricing was at 99.896 to yield 2.147%.

The notes went out slightly tighter at 67 bps bid, 60 bps offered, a trader said.

Joint bookrunners were BofA Merrill Lynch and JPMorgan.

Ralph Lauren plans to use the proceeds for general corporate purposes, which may include the repayment of its €209.2 million of 4.5% notes due Oct. 4, 2013.

Ralph Lauren is a New York-based company engaged in the design, marketing and distribution of lifestyle products.

AllState prices preferreds

The preferred stock market saw AllState price a $350 million offering of 6.75% series C fixed-rate noncumulative perpetual preferred stock (Baa3/BBB-/) on Monday, according to a market source.

The preferreds will be issued as depositary shares representing a 1/1,000th interest. Pricing came on top of talk.

Wells Fargo Securities LLC, BofA Merrill Lynch, Goldman Sachs, JPMorgan, Morgan Stanley and UBS Securities are the joint bookrunning managers.

When declared, dividends will be paid on the 15th day of January, April, July and October, beginning Jan. 15, 2014. However, the company will be prohibited from declaring any such dividend, except out of the net proceeds of common stock issued in a 90-day period prior to the date of declaration, should it fail to meet certain capital adequacy, net income or shareholders' equity levels.

The preferreds can be redeemed prior to Oct. 15, 2018 in whole within 90 days of a rating agency event. Such a redemption could include a make-whole redemption amount.

After Oct. 15, 2018, the preferred shares can be redeemed at any time at par plus accrued dividends.

Proceeds will be used for general corporate purposes, including to prefund the repayment of $650 million of 5% senior notes due 2014 and $300 million of 6.2% senior notes due 2014.

Allstate is a Wilmington, Del.-based insurance company.

Bank/brokerage CDS costs widen

Investment-grade bank and brokerage CDS costs widened on Monday, according to a market source.

Bank of America Corp.'s CDS costs eased 2 bps to 100 bps bid, 104 bps offered. Citigroup Inc.'s CDS costs widened 3 bps to 93 bps bid, 97 bps offered. JPMorgan Chase & Co.'s CDS costs rose 3 bps to 84 bps bid, 88 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 60 bps bid, 64 bps offered.

Merrill Lynch's CDS costs went out 3 bps wider at 94 bps bid, 99 bps offered. Morgan Stanley's CDS costs eased 3 bps to 129 bps bid, 133 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 5 bps to 121 bps bid, 125 bps offered.

Paul Deckelman and Stephanie N. Rotondo contributed to this review

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