Primary pace continues as BHP, Wal-Mart, BMO price; Verizon firms; Time Warner Cable 'volatile'

By Cristal Cody and Aleesia Forni

Virginia Beach, Va., Sept. 25 - Corporate issuers continued to pour into the high-grade primary bond market on Wednesday.

BHP Billiton Finance (USA) Ltd., Wal-Mart Stores Inc., Bank of Montreal and Rogers Communications Inc. were among the names that priced roughly $16.5 billion of new paper during the session.

The day's largest deal came from BHP Billiton Finance. The company priced brought $5 billion of notes to market in four parts.

Wal-Mart Stores priced a combined $1.75 billion of five- and 30-year notes on Wednesday.

Meanwhile, Bank of Montreal sold $2.5 billion of senior medium-term notes in two tranches, a market source said.

In other primary activity, Rogers Communications sold a $1.5 billion two-tranche notes offer on Wednesday in tranches due 2023 and 2043, according to a market source.

Southern California Edison Co. sold $1.6 billion of new first and refunding mortgage bonds during Wednesday's session.

In another new deal, Enbridge Inc. hit the primary with $1.15 billion of notes in tranches due 2016 and 2023.

American International Group Inc. also brought a new deal on Wednesday, selling $1 billion 4.125% notes due 2024 with a spread of Treasuries plus 150 basis points.

A Rule 144A sale came from News America Inc. during the session. The subsidiary of Twenty-First Century Fox, Inc. sold $1 billion of notes in two parts due 2023 and 2034 during the session.

Rounding out the day's deals, RLI Corp. sold $150 million of 4.875% 10-year senior notes on Wednesday at a spread of Treasuries plus 230 bps.

The week's total has already surpassed sources' original expectations of a $25 billion week.

However, one market source noted that many of the day's deals "priced very late" on Wednesday, which he added could be a sign that the recent spree could be taking its toll on investors.

Bonds ended the day mixed, and the Markit CDX North American Investment Grade series 21 index eased 1 bp to a spread of 80 bps.

Some issues that priced late in the session, including Wal-Mart and Enbridge, were not immediately seen in aftermarket trading, according to sources.

BHP's issues "all are doing well so far in the gray market," one source said.

Southern California Edison's new bonds traded flat to about 2 bps tighter in the secondary market.

In other trading, Verizon Communication Inc.'s record bond offering sold earlier in the month "is a little bit stronger," a trader said. "They're performing well."

Time Warner Cable Inc.'s bonds (Baa2/BBB/BBB) remained "pretty volatile" in secondary trading after widening over the week, with the company's notes as much as 10 bps wider on the day, a trader said.

"Yesterday, Time Warner was 3 to 5 [bps] better but closed 1 to 2 [bps] wider and leaked 2 to 3 [bps] wider today," the trader said.

BHP's four-parter

BHP Billiton Finance came to Wednesday's primary market selling $5 billion of new paper in four tranches, according to an informed source.

The deal included $500 million of three-year floating-rate notes sold at Libor plus 25 bps.

There was also $500 million of 2.05% notes due 2016 priced with a spread of Treasuries plus 70 bps.

A $1.5 billion tranche of 3.85% 10-year notes priced at Treasuries plus 125 bps.

Finally, $2.5 billion of 5% 30-year paper sold at Treasuries plus 130 bps.

BHP's notes due 2018 were quoted in afternoon trading tighter at 68 bps bid, 66 bps offered.

The tranche of notes due 2023 firmed to 121 bps bid, 118 bps offered, a trader said.

The 30-year bonds tightened to 126 bps bid, 121 bps offered.

The notes will be guaranteed by BHP Billiton plc and BHP Billiton Ltd.

Barclays, Goldman Sachs & Co. and J.P. Morgan Securities LLC are the joint bookrunners.

The diversified natural resources company is based in Melbourne, Australia.

BMO sells $2.5 billion

The session also saw Bank of Montreal sell $2.5 billion of senior medium-term notes in two tranches on Wednesday, according to a market source.

The company sold $1.5 billion of floating-rate notes due 2015 at par to yield Libor plus 25 bps.

There was also a $1 billion offering of 2.375% notes due 2019 priced with a spread of Treasuries plus 100 bps.

Pricing was at 99.972 to yield 2.381%.

BMO Capital Markets Corp., Goldman Sachs & Co., Credit Suisse Securities USA LLC and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes.

The financial services company is based in Toronto and Montreal.

Wal-Mart brings two-part deal

There was also a new deal from Wal-Mart Stores. The company priced a combined $1.75 billion of five- and 30-year notes (Aa2/AA/AA) on Wednesday, according to an informed source and an FWP filing with the Securities and Exchange Commission.

The company sold $1 billion of 1.95% five-year notes with a spread of Treasuries plus 60 bps, or 99.81 to yield 1.988%.

The second part was $750 million of 4.75% 30-year notes, which priced at Treasuries plus 110 bps. Wal-Mart sold the notes at 99.304 to yield 4.794%.

BofA Merrill Lynch, Deutsche Bank Securities Inc., RBS Securities Inc., HSBC Securities (USA) Inc. and Wells Fargo Securities LLC were the joint bookrunners.

The discount retailer is based in Bentonville, Ark.

Rogers prices tight

In other primary news, Rogers Communications sold a two-part offering of notes on Wednesday in tranches due 2023 and 2043, according to a market source.

The company priced $850 million of 4.1% 10-year notes with a spread of Treasuries plus 150 bps, or 99.813 to yield 4.123%.

The notes priced at the tight end of talk, which was set at the Treasuries plus 155 bps area.

There was also $650 million of 5.45% 30-year bonds sold at 180 bps over Treasuries.

Pricing was in line with talk that was in the 180 bps area over Treasuries.

The bonds sold at 99.401 to yield 5.491%.

Active bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC. Passive bookrunners were BMO Capital Markets Corp. and Scotia Capital (USA) Inc.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by Rogers Communications Partnership.

The wireless and cable TV company is based in Toronto.

SoCal Edison mortgage bonds

Southern California Edison sold $1.6 billion of first and refunding mortgage bonds on Wednesday in three tranches, a syndicate source said.

There was $200 million one-year floating-rate notes sold at par to yield Libor plus 5 bps.

A $600 million tranche of 3.5% 10-year notes priced at 99.824 to yield 3.521%, or Treasuries plus 90 bps.

The company also priced $800 million of 4.65% 30-year bonds with a spread of Treasuries plus 100 bps.

Pricing was at 99.312 to yield 4.693%.

In the secondary market, Southern California Edison's notes due 2023 firmed to 88 bps bid, 85 bps offered, a trader said.

The tranche of bonds due 2043 traded wrapped around issuance at 100 bps bid, 98 bps offered.

Barclays, J.P. Morgan Securities LLC, Loop Capital Markets LLC, Mitsubishi UFJ Securities USA, BNP Paribas Securities Corp., BNY Mellon Capital Markets LLC, RBS Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds from the offer will be used to redeem part of the company's outstanding first mortgage bonds, with any remaining proceeds to repay commercial paper borrowings and for general corporate purposes.

The electric utility is based in Rosemead, Calif.

Enbridge's two-tranche offer

Meanwhile, Enbridge priced a $1.15 billion issue of notes in two tranches due 2016 and 2023, according to a market source.

The deal included $350 million of three-year floating-rate notes priced at par to yield Libor plus 65 bps.

The bookrunners for the three-year notes were J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and HSBC Securities (USA) Inc.

There was also $800 million of notes due 2023 sold with a spread of Treasuries plus 150 bps.

BofA Merrill Lynch, Deutsche Bank Securities Inc., J.P Morgan Securities LLC and Morgan Stanley & Co. LLC were bookrunners for the 10-year notes.

Proceeds will be used for capital expenditures and for general corporate purposes.

Enbridge is a Calgary, Alta.-based oil and gas distributor and transportation company.

AIG sells $1 billion

New paper was also sold by American International Group on Wednesday. AIG priced $1 billion of 4.125% notes (Baa1/A-/) due Feb. 15, 2024 with a spread of Treasuries plus bps, according to an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.937 to yield 4.133%.

Proceeds will be used for general corporate purposes.

Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the joint bookrunners.

The insurance company is based in New York City.

News America brings $1 billion

A Rule 144A and Regulation S deal came from News America.

News America priced $1 billion of notes (/BBB+/) in two parts, according to an informed source and a company press release.

The company sold $300 million 4% senior notes due 2023 at 99.397 to yield 4.074%, or Treasuries plus 145 bps.

There was also a $700 million tranche of 5.4% notes due 2043 sold with a spread of Treasuries plus 175 bps.

Pricing was at 99.455 to yield 5.437%.

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

BMO Capital Markets Corp., Goldman Sachs & Co., Credit Suisse Securities USA LLC and J.P. Morgan Securities LLC were the bookrunners.

The subsidiary of media conglomerate Twenty-First Century Fox, Inc. is based in New York City.

RLI Corp. sells 10-years

The day's smallest deal came from RLI Corp., which priced $150 million 4.875% 10-year senior notes on Wednesday with a spread of Treasuries plus 230 bps, according to an FWP filed with the Securities and Exchange Commission.

The notes (Baa2/BBB+/) priced at 99.714 to yield 4.912%.

J.P. Morgan Securities LLC and Keefe, Bruyette & Woods Inc. were the joint bookrunners.

The company plans to use the proceeds to repay its 5.95% senior notes due 2014 before or when they mature in January 2014. Remaining proceeds will be used for general corporate purposes.

RLI is a Peoria, Ill., property and casualty insurance company.

Verizon tighter

Verizon's new bonds traded about 2 bps better across the curve in the secondary market on Wednesday, a trader said.

The tranche of 5.15% notes due 2023 (Baa1/BBB+/A-) firmed to 150 bps bid, 157 bps offered going out on Wednesday, the trader said.

Verizon sold $11 billion of the 10-year notes with a spread of Treasuries plus 225 bps as part of its record $49 billion eight-tranche deal sold on Sept. 11.

The telecommunications company is based in New York City.

Time Warner Cable widens

Time Warner Cable's 4.125% senior notes due 2021 (Baa2/BBB/BBB) widened to 210 bps bid, 202 bps offered late Wednesday, a trader said.

"Yesterday, they were 200, 195," the trader said.

The issue priced in a $700 million offering in 2010 at a spread of 155 bps over Treasuries.

Time Warner Cable's 5% senior notes due 2020 were quoted at 240 bps bid, 232 bps offered. The company sold $1.5 billion of the notes in 2009 at Treasuries plus 188 bps.

The broadband communications company is based in New York City.

Bank/brokerage CDS costs widen

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

Bank of America Corp.'s CDS costs eased 1 bp to 101 bps bid, 105 bps offered. Citigroup Inc.'s CDS costs widened 1 bp to 95 bps bid, 99 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 86 bps bid, 90 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 61 bps bid, 65 bps offered.

Merrill Lynch's CDS costs were 1 bp weaker on the day at 95 bps bid, 100 bps offered. Morgan Stanley's CDS costs eased 1 bp to 130 bps bid, 134 bps offered. Goldman Sachs Group, Inc.'s CDS costs eased 1 bp to 121 bps bid, 125 bps offered.

Paul Deckelman contributed to this review

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