IBM, CIBC, Carlisle, NAB among sellers in hot primary; AT&T, Verizon flat on downgrades

By Andrea Heisinger and Cristal Cody

New York, Dec. 6 - International Business Machines Corp., Canadian Imperial Bank of Commerce, Bio-Rad Laboratories, Inc., Florida Power & Light Co., Carlisle Cos. Inc. and National Australia Bank priced bonds on a Monday that had momentum.

IBM had the most talked about sale of the day with its $1 billion of five-year notes that priced in line with talk.

Also selling $1 billion of five-years was CIBC. The Canadian bank priced the bonds at the tight end of guidance.

A $425 million sale of 10-year notes came from Bio-Rad Labs. The company priced bonds to redeem some outstanding paper.

Florida Power & Light sold $400 million of 30-year mortgage bonds in a quick sale that was done by early afternoon.

Manufacturer Carlisle Cos. downsized its deal to $250 million of 10-year notes. A $100 million tranche of five-year notes was dropped from the trade.

One of the last sales of the day was also the largest. It was a $2.2 billion deal in three tranches from National Australia Bank.

The day and outlook for the rest of the week were bright as issuers rushed to the market, a source said. "We were kind of expecting this."

Two syndicate desks said they were working on deals for Tuesday, with more happening away from the issues.

"December's off to an OK start volume-wise," one of the syndicate sources said.

The new debt that IBM and Florida Power & Light sold firmed in the secondary market, traders said.

Elsewhere, the market shrugged off reports that Standard & Poor's downgraded the credit ratings on AT&T Inc. and Verizon Communications Inc. Both companies' bonds closed the day flat, a source said.

The Markit CDX Series 14 North American investment-grade index firmed 1 basis point on Monday to a spread of 91 bps, according to Markit Group Ltd.

Overall investment-grade Trace volume fell 3% to about $9.5 billion, a market source said.

Government bonds rallied Monday on a renewed stance on the Federal Reserve's $600 billion bond buyback program and on sovereign debt concerns in Ireland, Portugal and Spain that spurred investors into safer U.S. debt.

The flight into Treasuries sent the 10-year benchmark note yield back below 3% to 2.93% on Monday. The 30-year bond yield fell to 4.24% from 4.31%.

IBM's five-years

IBM priced $1 billion of 2% five-year notes by mid-afternoon at Treasuries plus 55 bps, an informed source said.

The notes (Aa3/A+) were talked in the 55 bps area and priced in line with that.

Bank of America Merrill Lynch, Credit Suisse Securities USA LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. were bookrunners.

Proceeds are going toward general corporate purposes.

The notes were immediately active in secondary trading, sources said.

The debt was seen trading firmer at 53 bps bid, 50 bps offered soon after release, one trader said.

Late afternoon, the notes had firmed on the bid side to 52 bps bid, 50 bps offered, traders said.

The company's last sale was on Aug. 2 when it sold $1.5 billion of three-year notes with a record-low coupon of 1%. That record was later broken by Wal-Mart Stores Inc. and Coca-Cola Co., which each priced three-year notes at a borrowing rate of 0.75%.

The record low for five-year notes is 1.5%, held by both Wal-Mart and Coke.

The computer and IT company is based in Armonk, N.Y.

NAB sells $2.2 billion

National Australia Bank priced $2.2 billion of senior notes (Aa1/AA/AA) in three tranches late in the day, a source close to the deal said.

The deal was reallocated at the launch to include a tranche of floating-rate notes.

That $450 million of three-year floaters priced at par to yield Libor plus 76 bps.

The $750 million of 1.7% three-year notes priced at a spread of Treasuries plus 103 bps.

A second part was $1 billion of 4.375% 10-year notes priced at Treasuries plus 150 bps.

All of the notes priced in line with guidance.

The tranche of floaters was "added on interest," a source said.

Bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and National Australia Bank.

The deal was done under Rule 144A.

Proceeds are going for general corporate purposes.

The financial services company is based in Melbourne, Australia.

Bio-Rad offers 10-years

Bio-Rad Laboratories sold $425 million of 4.875% 10-year senior notes (Ba1/BBB/BBB-) at a spread of Treasuries plus 200 bps, said a market source.

Bookrunners were Credit Suisse Securities Inc. and Goldman Sachs & Co.

Proceeds are going to redeem $225 million of outstanding 7.5% senior subordinated notes due 2013 and $200 million of 6.125% subordinated notes due 2014.

The distributor of research and clinical diagnosis equipment is based in Hercules, Calif.

Carlisle downsizes

Carlisle Cos. priced a downsized $250 million of 5.125% 10-year notes (Baa2/BBB) to yield 225 bps over Treasuries, a source close to the deal said late in the day.

A $100 million tranche of five-year notes was dropped from the trade, a source confirmed.

The remaining $250 million tranche of notes priced at 99.55 to yield 5.183%.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Wells Fargo Securities LLC.

Proceeds are going to repay debt under a credit facility and for general corporate purposes.

The diversified manufacturer is based in Charlotte, N.C.

CIBC prices $1 billion

Canadian Imperial Bank of Commerce priced a benchmark $1 billion of 2.35% five-year notes (Aa2/A+) to yield 85 bps over Treasuries, an informed source said.

The notes sold at the tight end of guidance in the 85 bps to 87 bps range.

Barclays Capital Inc., CIBC, Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. were bookrunners.

Proceeds will be added to bank funds and used for general corporate purposes.

The financial services company is based in Toronto.

FPL sells mortgage bonds

Florida Power & Light priced $400 million of 5.25% 30-year first-mortgage bonds (Aa3/A/AA-) at Treasuries plus 98 bps, according to an FWP with the Securities and Exchange Commission.

Credit Agricole Securities USA Inc., Mizuho Securities USA Inc., Scotia Capital USA Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds will be added to the company's general funds to repay short-term borrowings and for other general corporate purposes.

In the secondary market, the notes were tighter at 95 bps bid, 92 bps offered, according to a trader.

The electric subsidiary of NextEra Energy, Inc. is based in Juno Beach, Fla.

AT&T, Verizon flat

Standard & Poor's said on Monday that it lowered the corporate credit rating on New York City-based telecommunications carrier Verizon Communications to A- from A on expectations of only modest improvement over the next few years.

Dallas-based AT&T also was downgraded to A- from A on a limited future debt reduction.

"The downgrades reflect our view that the magnitude of AT&T's debt reduction will be limited and that the company will pursue a financial policy that results in rating metrics that are not fully supportive of the previous A corporate credit rating," S&P credit analyst Richard Siderman said in the rating release.

AT&T's debt was unchanged on the news, a source said. The company's 5.8% notes due 2019 (A2/A/) were flat at 65 bps.

Verizon's bonds also were unchanged in trading.

The 6.35% notes due 2019 (A3/A/) ended Monday at 80 bps, unchanged from Friday's spread, a source said.

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