Credit Suisse sells $5 billion; L-Bank, Caterpillar price; Credit Suisse firms; Deutsche flat

By Aleesia Forni and Cristal Cody

Virginia Beach, May 22 - A megadeal from Credit Suisse AG led a quieter session for the high-grade bond market on Thursday.

The bank, acting through its New York branch, sold $5 billion of senior notes in three tranches due 2017 and 2019.

A $1.25 billion tranche of floating-rate notes due 2017 priced at par to yield Libor plus 49 basis points, while a $1.75 billion tranche of 1.375% three-year notes sold with a spread of Treasuries plus 60 bps.

A third tranche was $2 billion of 2.3% five-year notes sold at Treasuries plus 80 bps.

Also on Thursday, Landeskreditbank Baden-Wurttemberg-Forderbank (L-Bank) sold $2 billion of 0.5% two-year notes at mid-swaps plus 4 bps, an informed source said.

Caterpillar Financial Services Corp. priced $250 million of two-year floating-rate medium-term notes yielding Libor plus 10 bps.

The session also saw Deutsche Bank AG price a two-part offering of notes, though details of the sale were unavailable at press time.

More than $7 billion of paper sold on Thursday, and the week's total supply now tops $30 billion.

With the extended Memorial Day holiday weekend looming, the market is expected to calm on the shortened Friday ending the busy week.

"Not expecting much action tomorrow," a source said late Thursday.

Investment-grade bond spreads mostly tightened over the session, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 64 bps.

Deutsche Bank's two tranches of notes were wrapped around issuance in aftermarket trading as the session closed, according to a trader.

The bank's notes due 2017 traded mostly flat at 58 bps bid, 55 bps offered, a trader said, while its notes due 2024 headed out wrapped around issuance at 120 bps bid, 118 bps offered.

Credit Suisse's two-part offering of notes tightened 2 bps on the bid side in secondary trading, a trader said.

Credit Suisse's $5 billion

Credit Suisse AG, acting through its New York branch, priced $5 billion of notes in three fixed- and floating-rate tranches due 2017 and 2019, according to a market source and an FWP filed with the Securities and Exchange Commission.

The sale included $1.25 billion of floating-rate notes due 2017 priced at par to yield Libor plus 49 bps.

A second tranche was $1.75 billion of 1.375% three-year notes priced at 99.971 to yield Treasuries plus 60 bps.

There was also $2 billion of 2.3% notes due 2019 priced at 99.794 with a spread of Treasuries plus 80 bps.

Credit Suisse's 1.375% notes due 2017 firmed to 58 bps bid, 56 bps offered in the secondary market, a trader said.

The 2.3% notes due 2019 tightened to 78 bps bid, 77 bps offered.

Credit Suisse Securities (USA) LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in Zurich.

L-Bank brings two-years

Landeskreditbank Baden-Wurttemberg-Forderbank (L-Bank) priced $2 billion of 0.5% notes due 2016 with a spread of mid-swaps plus 4 bps, according to an informed source.

The notes (Aaa/AAA/AAA) priced at 99.905 to yield 0.548%.

Barclays, Deutsche Bank Securities Inc., RBC Capital Markets LLC and UniCredit were the joint bookrunners.

The financial services provider is based in Karlsruhe, Germany.

Caterpillar new issue

Caterpillar Financial Services priced $250 million of floating-rate medium-term notes, series H, due 2016 at par to yield Libor plus 10 bps, according to an FWP filed with the SEC.

BofA Merrill Lynch and U.S. Bancorp Investments Inc. were the joint bookrunners.

The funding arm of heavy-equipment maker Caterpillar is based in Nashville, Tenn.

Bank/brokerage CDS costs flat to higher

Investment-grade bank and brokerage CDS prices were unchanged to higher, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 69 bps bid, 71 bps offered. Citigroup Inc.'s CDS costs were flat at 70 bps bid, 73 bps offered. JPMorgan Chase & Co.'s CDS costs ended unchanged at 56 bps bid, 59 bps offered. Wells Fargo & Co.'s CDS costs were flat at 36 bps bid, 39 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 73 bps bid, 76 bps offered. Morgan Stanley's CDS costs were flat at 74 bps bid, 77 bps offered. Goldman Sachs Group, Inc.'s CDS costs ended unchanged at 83 bps bid, 86 bps offered.

Paul Deckelman contributed to this review.

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