Weaker session sees Capital One, CDP Financial price; spreads soften; Goldman, Verizon better

By Cristal Cody and Aleesia Forni

Virginia Beach, July 21 – Capital One Bank NA and CDP Financial Inc. were among the issuers to bring new deals to Monday’s primary market.

Ongoing geopolitical tensions contributed to the market seeing a “weaker session overall” on Monday, a source said.

CDP Financial sold the largest trade of the day, pricing $2 billion of senior notes due 2024.

Meanwhile, Capital One priced a $1.25 billion offering of seven-year senior notes.

Both deals sold at the tight end of talk, sources said.

In other primary action, ConAgra Foods, Inc. brought an upsized offering of two-year floaters to market, while Liberty Mutual Group Inc. sold $750 million of 30-year bonds.

In total, the session saw $4.55 million of notes price to kick off the week.

Following one of the slowest weeks the market has seen so far this year, with only $10.8 billion of issuance, sources are expecting around $15 billion of supply for this week.

Investment-grade bond spreads opened the session softer and headed out weaker, according to a market source.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 60 bps.

Bank and financial paper traded mostly higher in price on Monday, a source said.

Goldman Sachs Group, Inc.’s 3.85% notes due 2024 climbed on Friday and held onto the gains over the session.

Verizon Communications Inc.’s 6.55% bonds due 2043 have rallied since the issue priced in September, according to a market source.

CDP brings $2 billion

The primary market saw CDP Financial sell a $2 billion offering of 3.15% 10-year senior notes (Aaa/AAA/) with a spread of Treasuries plus 73 bps, according to an informed source.

The notes sold at the tight end of talk.

Pricing was at 99.626 to yield 3.194%.

The joint bookrunners were BofA Merrill Lynch and Morgan Stanley & Co. LLC.

The subsidiary of public pension plan provider Caisse de depot et placement du Quebec develops public financing programs and is based in Quebec.

Capital One prices tight

Also on Monday, Capital One Bank priced $1.25 billion of 2.95% seven-year senior notes (A3/BBB+/A-) at Treasuries plus 87 bps on Monday, a market source said.

The notes sold at 99.718 to yield 2.995%.

Pricing came at the tight end of talk, which was set in the area of Treasuries plus 90 bps.

The bookrunners were BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley and RBS Securities Inc.

Proceeds will be used for general corporate purposes.

The financial services company is based in McLean, Va.

Liberty Mutual sells 30-years

Liberty Mutual Group came to market with a $750 million offering of 4.85% 30-year senior bonds (Baa2/BBB/) at Treasuries plus 160 bps, a market source said.

Pricing was at 99.92 to yield 4.855%.

The notes were sold via Rule 144A and Regulation S.

The bookrunners were BofA Merrill Lynch and Citigroup Global Markets Inc.

Proceeds from the offering will be used to repay debt and for general corporate purposes.

Liberty Mutual is a Boston-based property and casualty insurance company.

ConAgra upsizes

ConAgra Foods sold an upsized $550 million offering of floating-rate senior notes (Baa2/BBB-/BBB-) due 2016 at the tight end of talk to yield Libor plus 37 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

The bookrunners were RBS Securities and Wells Fargo Securities LLC.

The company plans to use proceeds from this offering for general corporate purposes, including the repayment of outstanding commercial paper and other debt.

ConAgra is an Omaha-based maker of prepared foods.

Goldman Sachs rises

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) edged up to 101.81 to yield 3.627% on Monday, according to a market source.

The notes climbed on Friday to 101.73 to yield 3.637% from 100.27 to yield 3.817% in Thursday’s session.

Goldman sold $2.25 billion of the notes at 99.868 to yield 3.866% on June 30.

The financial services company is based in New York City.

Verizon gains

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) remained higher on the day, according to a market source.

The notes headed out at 125.85 to yield 4.878%, up from where the bonds last traded at 125.60 to yield 4.892% on Friday.

Verizon sold $15 billion of the bonds at 99.883 to yield 6.559% on Sept. 11.

The telecommunications company is based in New York City.

Bank/brokerage CDSs 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 were flat at 69 bps bid, 72 bps offered. Citigroup Inc.’s CDS costs were also unchanged at 66 bps bid, 69 bps offered. JPMorgan Chase & Co.’s CDS costs remained flat at 56 bps bid, 59 bps offered. Wells Fargo & Co.’s CDS costs rose 1 bp to 46 bps bid, 51 bps offered.

Merrill Lynch’s CDS costs were unchanged at 73 bps bid, 77 bps offered. Morgan Stanley’s CDS costs were also flat at 66 bps bid, 71 bps offered. Goldman Sachs Group’s CDS costs increased 1 bp to 72 bps bid, 77 bps offered.

Paul Deckelman contributed to this review.

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