Packed primary sees Citigroup, Nissan sell following Fed statement; Cummins, TTX trade tighter

By Cristal Cody and Aleesia Forni

Virginia Beach, Sept. 19 - The high-grade bond market saw a packed primary on Thursday, as issuers jumped in following the Federal Reserve's surprising announcement on Wednesday that it would continue its bond purchasing program.

Issuers brought more than $8 billion of new paper during the session, bringing the week's total to roughly $20 billion.

"I don't think it will be slowing down anytime soon," one syndicate source said of the primary in the coming weeks.

The day's largest deal came from the financial sector, as Svenska Handelsbanken AB priced a $2.5 billion issue of senior notes in two tranches.

The deal included $1 billion of floating-rate notes due 2016 and $1.5 billion of 2.5% notes due 2019.

Another financial name, Citigroup Inc., sold $1.75 billion of 2.5% five-year notes with a spread of Treasuries plus 112 basis points.

Also on Thursday, Nissan Motor Acceptance Corp. priced a two-tranche offering of notes, according to a market source.

There was a $700 million tranche of floating-rate notes priced at par to yield Libor plus 70 bps and a $300 million tranche of 2.65% five-year notes sold at 120 bps over Treasuries.

Another new corporate deal came from Cummins Inc. The company priced a $1 billion issue of senior notes in two parts during the session, including $500 million of 3.65% 10-year notes with a spread of Treasuries plus 97 bps and $500 million of 4.875% 30-year notes at Treasuries plus 117 bps.

BB&T Corp. came to Thursday's primary selling $750 million of 2.3% five-year notes at Treasuries plus 83 bps.

Thursday also saw Freddie Mac reopen its 0.875% Reference Notes due 2016 to add $500 million, according to a press release.

In other primary action, Reinsurance Group of America Inc. sold $400 million of 4.7% senior notes due 2023 with a spread of Treasuries plus 200 bps.

A new deal from UDR Inc. also priced on Thursday. The company sold $300 million of 3.7% seven-year notes with a spread of Treasuries plus 160 bps, according to a filing with the Securities and Exchange Commission.

TTX Co. also came to the primary, selling $250 million of 4.125% senior notes with a spread of Treasuries plus 137.5 bps.

New issues traded stronger in the secondary market Thursday afternoon, while bonds headed out flat to a touch softer, according to market sources.

The new 4.125% notes from TTX firmed more than 3 bps, a trader said.

Cummins' 3.65% 10-year notes sold in the session tightened about 6 bps going out, and the tranche of long bonds came in more than 10 bps.

The offering from Citigroup traded about 1 bp better as the session closed.

Going out on Thursday, the Markit CDX Series 20 North American Investment Grade index eased about ½ bp to a spread of 70 bps.

Svenska Handelsbanken prices

Thursday's primary saw Svenska Handelsbanken come to market with a $2.5 billion issue of senior notes in two tranches, according to a source close to the deal.

The company sold $1 billion of floating-rate notes due 2016 at par to yield Libor plus 47 bps.

The notes sold at the tight end of talk.

A $1.5 billion 2.5% tranche of notes due Jan. 25, 2019 was sold with a spread of Treasuries plus 105 bps, or 99.917, to yield 2.517%.

The notes were priced on top of talk.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners.

The financial services company and bank is based in Stockholm.

Citi sells $1.75 billion

In other primary action, Citigroup priced $1.75 billion of 2.5% five-year notes (Baa2/A-/A) with a spread of Treasuries plus 112 bps, according to an informed source.

The notes priced at 99.562 to yield 2.594%.

Citigroup's 2.5% notes later firmed to 111 bps bid, 109 bps offered in secondary trading, a trader said.

Citigroup Global Markets Inc. was the bookrunner.

The financial services company is based in New York.

Nissan's fixed, floating notes

Nissan Motor also came to Thursday's primary, pricing a two-part $1 billion offering of notes, according to a market source.

The company priced $700 million of floating-rate notes due 2016 at par to yield Libor plus 70 bps.

There was also $300 million of 2.65% five-year notes sold with a spread of 120 bps over Treasuries.

Pricing was at 99.888 to yield 2.674% and was done under Rule 144A and Regulation S.

Bookrunners were BofA Merrill Lynch, Citigroup Global Markets, Barclays and HSBC Securities (USA) Inc.

The financing and leasing company for Nissan vehicles is based in Irving, Texas.

Cummins gets $1 billion

Cummins sold a two-part $1 billion issue of senior notes on Thursday, according to a filing with the SEC.

The deal included $500 million of 3.65% 10-year notes priced with a spread of Treasuries plus 97 bps. The notes were sold at 99.402 to yield 3.722%.

There was also $500 million of 4.875% 30-year notes sold at Treasuries plus 117 bps, or 97.869, to yield 5.013%.

Cummins' tranche of 3.65% notes traded better at 91 bps bid, 89 bps offered, a trader said. The 4.875% bonds went out tighter at 106 bps bid, 104 bps offered.

Goldman Sachs, BofA Merrill Lynch, J.P. Morgan Securities LLC, HSBC Securities and RBS Securities Inc. were the joint bookrunners.

Proceeds from the offering will be used for the planned acquisitions of the equity that the company does not already own in most of its partially owned U.S. and Canadian distributors, as well as for general corporate purposes.

Cummins is a Columbus, Ind.-based company that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products.

BB&T sells on top of talk

Meanwhile, BB&T sold $750 million of 2.3% five-year notes on Thursday at 99.98 to yield 2.304%, according to a market source.

The notes sold on top of talk at a spread of Treasuries plus 83 bps.

BB&T Capital Markets, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.

The financial services company is based in Winston-Salem, N.C.

Freddie Mac adds on

Freddie Mac reopened its issue of 0.875% Reference Notes due Oct. 14, 2016 to add $500 million via an internet-based auction on Thursday, according to a press release.

The reopened notes were priced at 100.150746 with a stop yield of 0.825% and an approximate spread of Treasuries plus 14.6 bps.

Total issuance is $3.5 billion, including the original $3 billion offering sold on Aug. 14.

The government-backed mortgage lender is based in McLean, Va.

Reinsurance Group prices

Also on Thursday, Reinsurance Group of America came to market with a $400 million issue of 4.7% senior notes (Baa1/A-/) due 2023, according to an FWP filed with the SEC.

The notes priced with a spread of Treasuries plus 200 bps, or 99.623, to yield 4.748%.

BofA Merrill Lynch, JPMorgan and UBS Securities LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes.

Reinsurance Group is a Chesterfield, Mo.-based reinsurance company.

UDR prices $300 million

In another relatively smaller deal on Thursday, UDR priced a $300 million issue of 3.7% seven-year notes with a spread of Treasuries plus 160 bps, according to a filing with the SEC.

Pricing was at 99.981 to yield 3.703%.

JPMorgan and Morgan Stanley were the joint bookrunners.

Proceeds will be used to repay the company's outstanding debt under its $900 million unsecured credit facility and for general corporate purposes.

The real estate investment trust for apartment communities is based in Highlands Ranch, Colo.

TTX prices tight

TTX sold on Thursday $250 million of 4.125% senior notes due Oct. 1, 2023 with a spread of Treasuries plus 137.5 bps, according to an informed source.

Pricing was at 99.999 to yield 4.125%.

The notes priced tight of talk.

In the secondary market, TTX's 4.125% notes firmed to 134 bps bid, 132 bps offered, according to a trader.

Citigroup Global Markets and Wells Fargo Securities were the joint bookrunners.

Proceeds from the sale will be used for general corporate purposes.

TTX last tapped the market with a $250 million sale of 3.05% 10-year notes to yield Treasuries plus 150 bps on Nov. 15, 2013.

The railroad freight company is based in Chicago.

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