American Express sells floaters; Maiden does $25-par notes; Best Buy flat; CenturyLink firms

By Andrea Heisinger and Cristal Cody

New York, June 17 - American Express Credit Corp. closed out the week on Friday with a sale of floating-rate notes as other names in the investment-grade bond market wait to see if conditions improve in the coming week ahead of the end of the quarter.

AmEx Credit priced $600 million of three-year floaters.

Also during the session, Maiden Holdings North America Ltd. priced $100 million of 30-year $25-par notes. The deal size was increased from $75 million.

By day's end there wasn't much enthusiasm for the coming week, although there was a better feel in the market following an equities rebound on news of a possible bailout of Greece.

"We're seeing maybe $10 billion," a syndicate source said of upcoming supply. "It could be a little better [than this week]."

Overall trading volume dropped to about $9.5 billion from more than $11 billion the previous day.

In the secondary market, Best Buy Co.'s notes traded flat to slightly better on Friday, according to traders.

The Gap Inc.'s 10-year notes (Baa3/BB+/BBB-) were unchanged in trading.

All three split-rated senior notes (Baa3/BB/BBB-) that CenturyLink, Inc. sold on June 9 traded stronger on Friday after more than a week of widening, a trader said.

The Markit CDX Series 15 North American investment-grade index firmed 1 basis point to a spread of 100 bps, according to Markit Group Ltd.

Treasuries ended mostly unchanged as assurances grew of overseas support for Greek debt assistance. The benchmark 10-year note yield rose 2 bps to 2.94%, and the 30-year bond yield climbed 4 bps to 4.21%.

"We sold off in the morning, but no one wants to be short on the weekend," a bond source said. "There seems to be some improvement to the situation [in Greece], and that's why the flight to quality bid just disappeared. We're essentially unchanged on the day pretty much."

AmEx unit sells floaters

American Express Credit priced $600 million of three-year senior floating-rate notes (A2/BBB+/A+) at par to yield three-month Libor plus 85 bps, according to a syndicate source.

Bookrunners were Bank of America Merrill Lynch and UBS Securities LLC.

AmEx Credit's last deal was $2 billion of five-year notes priced on Sept. 8, 2010.

The subsidiary of financial services provider American Express Co. is based in New York City.

Maiden issues notes

Maiden Holdings North America priced a $100 million offering of $25-par 30-year senior notes at 8.25%, a market source said.

The company was expected to issue $75 million of the notes (BBB-).

The securities will be guaranteed by Maiden Holdings Ltd.

The deal had originally been announced on Thursday, astonishing market players because of the less-than-stellar marketplace.

"It's not falling apart, but there're no bids out there," the source said.

He saw the paper offered at $24.50.

Bank of America Merrill Lynch is the bookrunner.

Proceeds will be used primarily to repurchase all or a portion of the outstanding trust preferred securities originally issued by Maiden Capital Financing Trust, a trust established by Maiden NA, according to a prospectus filed with the Securities and Exchange Commission on Thursday.

Maiden Holdings is a Hamilton, Bermuda-based reinsurance company.

Best Buy unchanged

Best Buy's 3.75% notes due 2016 were quoted Friday at 185 bps offered, compared to 198 bps bid, 188 bps offered on Thursday, traders said.

The company's 5.5% notes due 2021 were unchanged at 260 bps bid, 250 bps offered.

Best Buy's bonds firmed in trading after the company reported strong first-quarter earnings.

The electronics and entertainment retailer is based in Richfield, Minn.

Gap flat

In the secondary market, Gap's 5.95% notes due 2021 were quoted flat on Friday at 96.25 bid, 96.625 offered, a trader said.

The clothing retailer is based in San Francisco.

CenturyLink stronger

CenturyLink's 5.15% notes due 2017 were seen trading tighter Friday at 355 bps bid, 345 bps offered. The notes priced at a spread of Treasuries plus 360 bps.

The 6.45% notes due 2021 also firmed on the offer side to 348 bps. The notes had widened as much as 10 bps in initial secondary trading after pricing at 350 bps over Treasuries.

CenturyLink's bonds due 2039, which it reopened at a spread of Treasuries plus 380 bps, were seen going out at 375 bps bid, 367 bps offered.

The integrated communications company is based in Monroe, La.

CDS flat to lower

A trader who watches the credit default swaps market said that the cost of protecting holders of bonds issued by major banking or investment banking companies against a possible event of default were unchanged to lower on Friday, a sign of increased investor confidence in the sector - after having gone up for two straight sessions on Wednesday and Thursday because of nervousness about the group.

He saw the prices go down by up to 6 bps, after having gone up by anywhere from 4 bps to 11 bps on Wednesday and then by another 4 bps to 9 bps Thursday.

He saw the CDS costs for Citigroup go down by 6 bps to 147 bps bid, 150 bps offered, while Morgan Stanley's were likewise in by 6 bps at 170 bps bid, 174 bps offered.

He saw Capital One Financial's CDS costs unchanged, at 87 bps bid, 91 offered for Capital One's bank paper and to 124 bps bid, 128 bps offered for Capital One's separate finance unit's bonds, citing the impact of the news of Richmond, Va.-based financial institution having agreed to buy European lender ING Groep NV's U.S. online bank for $9 billion in order to gain deposits and access to 7 million customers.

Paul Deckelman and Stephanie N. Rotondo contributed to this review

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