Anheuser-Busch, NY Life, Barrick, Deere among deals, high volume surprises; spreads tighten

By Andrea Heisinger and Paul Deckelman

New York, Oct. 13 - Anheuser-Busch Cos. Inc., New York Life Global Funding, American Tower Corp., Barrick Australia Pty. Ltd. and Deere & Co. priced investment-grade bond deals on a surprisingly full Tuesday following a long weekend.

There were more deals came to market than anticipated, sources said.

Meanwhile Inter-American Development Bank and KfW each announced sales of short-maturity bonds expected to price on Wednesday.

IADB is selling three-year notes, while KfW is pricing five-years.

Anheuser-Busch's deal was the largest of the day at $5.5 billion in four tranches. It was also the last to price and was more than two times oversubscribed.

Agricultural and industrial equipment maker Deere sold $1.25 billion in tranches of 10-and-20-year notes. It also priced late in the afternoon.

New York Life Global was one of the many sales for the day done via Rule 144A. The company sold an upsized $500 million of three-year notes, increasing the size from $300 million.

Barrick priced $1.25 billion of notes in 10- and 30-year maturities. The Australian company was one of the many foreign issuers for the day.

American Tower increased its sale of split-rated senior notes due 2015 from $400 million to $600 million. It was one of the first deals to get done for the day and was done off the high-grade syndicate desk.

Among the established issues in the secondary arena on Tuesday, a market source said the CDX Series 13 North American high-grade index was 1 basis point narrower versus Friday's level, at a mid bid-asked spread level of 101 bps.

Advancing issues jumped back ahead of decliners, breaking the latter's two-session winning streak, as the advancers led by around a 10-to-nine ratio.

Overall market activity, reflected in dollar-volume totals, zoomed 57% from Friday's restrained pre-holiday pace.

Spreads in general were seen tighter, in line with higher Treasury yields; for instance, the yield on the benchmark 10-year notes widened by 6 bps on Tuesday to 3.35%.

Anheuser-Busch sells $5.5 billion

Anheuser-Busch sold an upsized $5.5 billion of notes in four tranches late in the day, a market source said. The deal priced after 5 p.m. ET.

The deal was upsized from an original three tranches. There was about $13 billion on the books for the sale, a source away from it said.

The $1.5 billion of 3% three-year notes priced at Treasuries plus 160 basis points.

The $1.25 billion of 4.125% notes due 2015 priced 185 bps over Treasuries, while the $2.25 billion tranche of 5.375% notes due 2020 sold at Treasuries plus 210 bps.

The final tranche was $500 million of 6.375% notes due 2040 priced at Treasuries plus 220 bps.

The deal was done via Rule 144A.

It wasn't a total surprise that the company came to the market with such a large deal, but the timing was "interesting," as one market source said.

"I think everyone had an idea it was coming, but the timing was surprising," he said. "I'm sure they just looked at the market this morning and decided to come."

Bank of America Merrill Lynch, Deutsche Bank Securities and J.P. Morgan Securities ran the books.

The subsidiary of beer maker Anheuser-Busch InBev is based in St. Louis.

Deere prices two tranches

The parent company of John Deere products, Deere & Co., sold $1.25 billion of senior notes in two tranches late in the day, but before the Anheuser-Busch deal.

The $750 million tranche of 4.375% 10-year notes priced at Treasuries plus 115 bps. This was at the tight end of guidance of 115 bps.

A $500 million tranche of 5.375% 20-year notes priced at 125 bps over Treasuries. They also came in at the tight end of talk of 125 bps.

Citigroup Global Markets, Deutsche Bank Securities and J.P. Morgan Securities were bookrunners.

Proceeds will be used for general corporate purposes.

The manufacturer and distributor of agricultural and industrial equipment is based in Moline, Ill.

New York Life upsizes three-year

New York Life Insurance Co. subsidiary New York Life Global Funding sold an upsized $500 million of 2.25% three-year notes at Treasuries plus 93 bps, a market source said.

The size was increased from $300 million on the deal that was sold by the New York City-based company via Rule 144A.

A source away from the sale called it the "best print of the day.

"It got done at a pretty attractive level for NY Life," he said.

Credit Suisse Securities, Deutsche Bank Securities and UBS Investment Bank were bookrunners.

American Tower upsizes split-rated deal

Wireless and broadcast antenna space lessor American Tower sold an upsized $600 million of 4.625% split-rated senior unsecured notes due 2015 (Baa3/BB+/BBB-) at Treasuries plus 240 bps. The deal was done via Rule 144A and Regulation S.

The amount was an increase from the original size of $400 million, a source said.

The deal came in line with guidance of 240 bps over Treasuries. The deal was run off the high-grade syndicate desk, the source said, although he "couldn't comment just yet" on how the investors were split between the high-yield and high-grade accounts.

Credit Suisse Securities, J.P. Morgan Securities and Morgan Stanley were tapped as bookrunners by the Boston-based company.

Proceeds will be used to finance the repurchase or redemption of debt, possibly including the company's 7.125% senior notes due in 2012.

Primary volume surprises

It was thought before the long holiday weekend that this week would be a slow one in terms of issuance due to earnings blackouts and other factors.

That was not the case, at least on Tuesday.

"I would have thought we wouldn't be so busy today," a source said. "It was a good day. Everything got done at good levels. We saw a lot of foreign trades."

The last part wasn't unexpected. With many U.S. companies in third-quarter earnings blackout, foreign issuers were expected to take up the slack, and take advantage of the lack of competition. A majority of the day's sales were done via Rule 144A.

"I don't think this will last, but you never know," a syndicate source at a larger desk said when asked about continued high volume for the rest of the week.

"I wouldn't think there are that many deals out there."

Barrick sells two tranches

Barrick Gold Corp. subsidiary Barrick Australia sold $1.25 billion of notes in two tranches, a market source said.

The $400 million of 4.95% 10-year notes priced at Treasuries plus 175 bps.

An $850 million tranche of 5.95% 30-year notes priced at a spread of Treasuries plus 195 bps.

Citigroup Global Markets, Deutsche Bank Securities and UBS Investment Bank ran the books.

The notes were sold via Rule 144A. They are guarantee by Barrick Gold.

The mining company is based in Perth, Australia.

IADB to sell three-year notes

Inter-American Development Bank announced a benchmark sale of three-year global notes, with pricing expected on Wednesday, a source away from the deal said.

They are talked at mid-swaps minus 10 basis points.

Citigroup Global Markets, Credit Suisse Securities, HSBC Securities and Morgan Stanley are running the books.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

KfW to offer five-year notes

Germany's KfW is planning a sale of five-year notes for Wednesday, a market source said on Tuesday.

Barclays Capital, J.P. Morgan Securities and RBC Capital Markets are bookrunners.

The German-government owned bank is based in Frankfurt.

Barrick 10-years slightly firmer

The new Barrick Australia 4.95% notes coming due in January 2020 were seen by a trader having firmed a little to 171 bps bid, although without an offer.

That's in slightly from the 175 bps over level at which the $400 million of notes priced earlier in the session.

However, the other half of that two-part deal - Barrick's $850 million of 5.95% bonds due 2039 - was seen straddling the 195 bps over spread at pricing, at 196 bps bid, 190 bps offered.

BUD bonds unseen in secondary

Anheuser-Busch InBev's gigantic new four-part mega-deal was heard to have priced too late in the session for any kind of meaningful aftermarket activity.

A trader said that in the gray market, the bonds were all being bid about 5 bps tighter than the eventual pricing level - 155 bps over for the three-years, 180 bps over for the six-years, 205 bps over for the 10-years and 215 bps over for the 30-years.

There were no offers seen.

The company's 6.45% bonds due 2037 were meantime 4 bps wider on the day at 181 bps.

American Tower bonds little moved

A trader saw American Tower's split-rated (Baa3/BB+/BBB-) 4.625% notes due 2015 at 239 bps bid, 235 bps offered, versus the 240 bps offered at which the bonds priced.

Among the Boston-based communications antenna tower operator's similarly rated existing issues, a trader saw "nothing at all" doing among the 7 1/8% notes due 2012 which are expected to be redeemed using the proceeds of the bond deal.

However, he said that the 7% notes due 2017 were "pretty active, with - wow! -- $54 million traded."

He saw those bonds move up to 108½ bid, 108 5/8 - up from 107¾ earlier in the session, but on the whole, "not much of a mover" from 108 bid, where they had last traded on Thursday.

He also said that oddly, "the 7s were the only real trade in that name," with the company's other issues relatively inactive. "Only in that one."

At another desk, a trader saw the 7¼% notes due 2019 bid at 109 Tuesday, without an offer, up from last week's level of 107 bid, also with no offers.

Protective Life remains active

A trader said Protective Life Corp.'s recently priced deal "is still one of the most active issues," according to the Trace bond-tracking system.

Those $300 million of 8.45% bonds due 2039 were little changed offered at 440 bps over, versus 437.5 bps at the pricing last week, with "lots of add-lots, a lot of retail trading."

Another market source said that over $40 million of the Protective Life 10-year bonds had traded at mid-afternoon.

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