CBS brings $700 million of 3.375% notes at Treasuries plus 150 bps; Citigroup, Comcast firm

By Sheri Kasprzak and Cristal Cody

New York, Feb. 24 - New issue volume tapered off on Friday following the heavy load of deals that hit the market early in the week.

Leading Friday's light action, CBS Corp. brought $700 million of notes, said a term sheet.

The 3.375% senior notes (Baa2/BBB/BBB) are due March 1, 2022 and were priced at a spread of Treasuries plus 150 basis points. The notes were priced at 99.095 to yield 3.483%.

The notes feature a make-whole call at Treasuries plus 25 bps any time before Dec. 1, 2021. They are callable at par beginning Dec. 1, 2021.

If a change of control occurs, the company must offer to purchase the notes at 101.

The joint bookrunners were Bank of America Merrill Lynch, Deutsche Bank Securities Inc., RBS Securities Inc., UBS Investment Bank, Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC. The co-senior managers were Morgan Stanley & Co. LLC and SMBC Nikko Capital Markets Ltd.

The broadcasting company is based in New York.

Positive tone in secondary

The Markit CDX Series 17 North American Investment Grade index firmed 1 bp to a spread of 96 bps.

"Slow this afternoon, but definitely a positive tone to the market," a trader said.

ArcelorMittal's five- and 10-year tranches stayed 20 bps to 30 bps better on Friday, a trader said.

Hewlett-Packard Co.'s bonds traded unchanged.

Citigroup Inc.'s notes were stronger along with the bank and financial sector, traders said.

Bank and financial paper traded 5 bps to 10 bps better on the day.

Comcast Corp.'s notes firmed about 5 bps.

Investment-grade bank and brokerage credit default swaps costs were unchanged to 5 bps tighter, a source said.

Bank of America's CDS costs firmed 5 bps to 265 bps bid, 275 bps offered. JPMorgan's CDS costs traded flat at 112 bps bid, 119 bps offered.

Brokerage paper CDS costs also were flat to tighter. Merrill Lynch's CDS costs firmed 5 bps to 295 bps bid, 310 bps offered. Goldman Sachs' CDS costs traded unchanged at 265 bps bid, 275 bps offered. Morgan Stanley's CDS costs were quoted flat at 330 bps bid, 340 bps offered.

Treasuries ended stronger with yields down 5 bps to 6 bps on the longer end of the curve. The 10-year note yield fell to 1.84% from 1.89%. The 30-year bond yield dropped to 2.99% from 3.06%.

ArcelorMittal firms

ArcelorMittal's notes (Baa3/BBB-/BBB) sold three tranches on Thursday stayed stronger in the secondary market, a trader said on Friday.

The 4.5% notes due 2017 were seen at 348 bps bid, 344 bps offered. The $1.4 billion tranche priced at a spread of Treasuries plus 370 bps.

The 6.25% notes due 2022 firmed to 405 bps bid, 401 bps offered on Friday. ArcelorMittal sold $1.1 billion of the notes at Treasuries plus 435 bps.

The steel and mining company is based in Luxembourg.

Citi tightens

Citigroup's 2.65% notes due 2015 traded better at 225 bps bid, 215 bps offered on Friday, a trader said.

The $1.25 billion issue (A3/A-/A) priced at a spread of 230 bps over Treasuries on Wednesday.

Also in trading, Citigroup's 4.5% notes due 2022 firmed 7 bps to 235 bps bid, 230 bps offered, a trader said.

Citi sold $250 million of the 10-year notes on Dec. 7 at a spread of 290 bps plus Treasuries.

The financial services company is based in New York.

Comcast firms

Comcast's 5.15% notes due 2020 firmed 5 bps on the day to 80 bps bid, 70 bps offered, a trader said.

Comcast sold the notes in a $1.4 billion offering on Feb. 24, 2010 at 147 bps over Treasuries.

The telecommunications company is based in Philadelphia.

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