Praxair, Westpac sell bonds, tone dips by afternoon; Praxair gains in trading; Roper eases

By Andrea Heisinger and Paul Deckelman

New York, Aug. 27 - Praxair, Inc. priced new bonds early Thursday, while Westpac Banking Corp. reopened its issue priced earlier in the week.

The two sales were about the only action in an otherwise dull primary, sources said. There is little to no issuance expected for Friday.

Praxair sold $400 million of six-year notes, which was an increase from an original $350 million size, a source away from the sale said.

Westpac reopened its recent sale of notes due 2015 to add $300 million. The deal was set to settle Thursday.

Issuance is likely done for the week, sources said, with nothing solid lined up for pricing Friday.

Among the established issues in the secondary arena on Thursday, a market source said the CDX Series 12 North American high-grade index remained at a mid bid-asked spread level of 115 basis points for a third straight session.

Advancing issues - which held a four-to-three lead over decliners on Wednesday for a second straight day - remained ahead of them Thursday, but by only a relatively narrow margin, of a couple of dozen issues.

Overall market activity, reflected in dollar-volume totals, eased about 7% from Wednesday's pace.

Spreads in general were seen slightly tighter, in line with somewhat higher Treasury yields; for instance, the yield on the benchmark 10-years rose by 3 bps Thursday to 3.46%.

The new Praxair bonds were seen having tightened modestly from the spread over comparable Treasuries at which they had priced.

Meanwhile, the recent Roper Industries Inc. 10-year notes were heard to have widened slightly from Wednesday's levels, but still traded well inside the spread at which the issue priced.

Praxair upsizes six-year sale

Praxair sold an upsized $400 million of 3.25% six-year notes at Treasuries plus 85 bps.

The size was increased from $350 million, a source close to the sale said. He added that the deal came in at the tight end of guidance for a spread of 85 to 87 bps.

The offering follows a $600 million issue of bonds due 2019 on Aug. 10 by the company.

Citigroup Global Markets and RBS Securities were bookrunners for the latest sale.

Proceeds will be used to repay short-term debt and for general corporate purposes.

The industrial gases company is based in Danbury, Conn.

Westpac reopens six-year notes

Westpac Banking reopened its recent issue of 4.2% senior unsecured bonds due 2015 to add $300 million. The notes priced at Treasuries plus 170 bps.

Total issuance is now $1.8 billion, including $1.5 billion priced Monday at 175 bps over Treasuries.

Bookrunners for both parts were Bank of America Merrill Lynch and J.P. Morgan Securities.

The banking and financial services company is based in Sydney, Australia.

Tone weakens by afternoon

A solid opening for the day gave primary sources hope, and led to at least one of the day's deals, a source said. But by afternoon, some of the optimism had waned.

"At the opening we thought the day was [going to be] good," the source said. "That's why Praxair jumped in."

"By early afternoon, it wasn't as good. I don't really know what happened."

Despite the change, the Praxair bonds performed relatively well once freed for trading, a source who worked on the sale said.

"It hasn't performed terribly," he said. The bond had tightened by about 4 bps at the market close, to 81 bps bid, 78 bps offered.

The somewhat negative tone that Thursday went out on will likely nix any deals that may have been considered for Friday.

"We're really not expecting anything for Friday," a source said. "It's pretty much done [for the week]."

New Praxair tightens up

When the new Praxair 3.25% notes due 2015 were freed for secondary activity, they had tightened marginally to 83 bps bid, 80 bps offered, versus the 85 bps over Treasuries level at which the $400 million issue - upsized from the original $350 million - had priced earlier in the session.

However, a second source queried a little later on saw more firming, with the bonds closing at 81 bps bid, 78 bps offered.

Roper retreats a little

The $500 million issue of 6.25% notes due 2019 from Roper Industries, which priced Wednesday, were seen having widened a little from the initial trading levels they held after pricing.

A trader saw those bonds at 267 bps bid, 262 bps offered - out a little from the 265 bps bid, 263 bps offered level seen in Wednesday's aftermarket,.

However, they were still tighter than the 280 bps over level at which the issue - upsized from $350 million originally - was priced earlier Wednesday by the Sarasota, Fla.-based company, which manufactures energy systems and controls, scientific and industrial imaging products and software, industrial technology products and radio frequency products and services.

Citigroup spurred by Paulson talk

In the financial issues, Citigroup Inc.'s bonds, as well as its New York Stock Exchange-traded shares, got a boost Thursday on news reports indicating that savvy hedge fund manager John Paulson - previously bearish on the banking sector - has been accumulating Citi shares recently, reportedly feeling that the New York-based banking giant's assets are undervalued.

A market source saw Citi's 6 3/8% notes due 2014 some 40 bps tighter on the day, quoting them at 335 bps, while its 8.50% notes due 2019 - one of the day's busiest issues, with over $40 million traded at mid-afternoon - were about 5 bps tighter, at the 380 bps mark.

Citi's shares meantime gained 42 cents, or 9.07%, to end at $5.05. Volume of 1.2 billion shares was more than twice the norm.

Bank, brokerage CDS costs tend to tighten

A trader who follows the credit default swaps market said that the cost of protecting holders of big-bank debt against a possible event of default, which had widened on Wednesday by 5 bps, narrowed once again on Thursday, quoting it as unchanged to 5 bps tighter.

The trader said those same levels were also applicable to CDS costs for major brokerage company paper, which had also widened out on Wednesday by 5 bps.

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