Incitec Pivot, Genworth Financial, City National price bonds; market eyes B of A, Citi

By Andrea Heisinger

New York, Dec. 3 - Incitec Pivot Finance, City National Capital Trust I and Genworth Financial, Inc. each priced investment-grade bond issues on an otherwise quiet Thursday.

The Genworth Financial sale was the last to price - getting done after 5 p.m. ET. It was upsized to $300 million from $250 million in seven-year notes.

Incitec Pivot Finance, an Australian chemical fertilizer company, priced an upsized $800 million of 10-year notes via Rule 144A by early afternoon. The size of the sale was increased from $500 million.

City National Capital sold $250 million of cumulative trust preferreds due 2040.

Both sides of the market were mostly focused on activity in the secondary.

New bonds improved slightly, but the stars of trading were bonds from Bank of America Corp. and Citigroup Inc.

News of a $45 billion Troubled Asset Relief Program repayment by Bank of America thrust its bonds into heavy trading. Citigroup's notes were also popular a day after it remarketed nearly $2 billion worth of bonds.

Other news of Comcast's purchase of NBC Universal from General Electric Corp. did not seem to affect any of the involved companies' bonds much in trading.

Spreads moved tighter by late afternoon as Treasury yields widened. The five-year note was out 4 basis points to yield 2.12%, and the 30-year bond was 8 bps wider, landing at a 4.33% yield.

Incitec Pivot upsizes 10-year

Incitec Pivot Finance sold an upsized $800 million of 6% 10-year notes early in the day at Treasuries plus 270 bps, said an informed source, who added that the size was increased from $500 million announced previously.

The notes were priced via Rule 144A.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets and RBS Securities.

The funding unit of chemical fertilizer company Incitec Pivot Ltd. is based in Southbank, Australia.

Genworth prices $300 million

Genworth Financial sold an upsized $300 million of seven-year senior unsecured notes late in the day at Treasuries plus 580 bps, a source away from the sale said.

A source close to the deal said it priced after 5 p.m. ET. The size was initially $250 million.

Deutsche Bank Securities Inc., Keefe, Bruyette & Woods and UBS Investment Bank ran the books.

The insurance and financial services company is using proceeds for general corporate purposes and is based in Richmond, Va.

City National unit sells trust preferreds

City National Capital Trust sold $250 million of 9.625% cumulative trust preferred securities due 2040 at $1,000 each, according to an FWP filing with the Securities and Exchange Commission.

The preferreds are guaranteed by parent company City National Corp.

J.P. Morgan Securities Inc., Barclays Capital Inc. and UBS Securities LLC ran the books.

City National is a bank holding company for City National Bank and is based in Los Angeles.

Primary quiets on low volume

A small number of new deals were priced in the investment-grade primary, but much of the day's focus was on heavy trading in financial bonds in the secondary.

A source who worked on the Genworth sale said the primary was "quiet outside [of] that."

The Bank of America news didn't register much in the primary, where only three small deals were priced.

"It did nothing to the primary," the source said. "It looked like there was a lot of activity in trading. Citi bonds were pretty active."

Another source said that "things kind of got quieter, but it is Thursday."

B of A bonds top trading, tighten

An outstanding bond from Bank of America was at the top of trading by early Thursday afternoon. The strong trading activity came as the bank announced it would repay $45 billion in bailout money from the government.

That announcement also caused its outstanding bonds to move 15 to 30 bps tighter, a trader said late in the day.

The financial's 7.625% bond due 2019 was popular with investors. It is not backed by the government.

The repayment will enable the company to avoid executive pay caps it would have had to adhere to under the government aid guidelines.

Another bond - a 6.5% issue due 2016 - was also trading heavily.

Financials up trading volume

Trading in the financial sector of the secondary pushed volume to about $9.7 billion by late afternoon, a trader said.

That was the highest it had been since mid-November, she said.

"Volume was not bad today," she said.

About $4.5 billion, or half of the day's trades, came from the financial sector. This was mostly credited to the news from Bank of America and the Citigroup bond sale the previous day, the trader said.

Among new, non-financial issues, Xerox Corp.'s three new bonds were the most active. The $2 billion worth of bonds sold on Tuesday posted about $100 million in trades on Thursday, the trader said.

Incitec bond offered tighter

The new 6% bond due 2019 sold by Incitec Pivot was offered nicely tighter than its price of 270 bps over Treasuries, a trader said.

It was offered at 247 bps, with no bid, he said.

Con Ed mortgage bond in slightly

A new bond from Consolidated Edison Co. of New York Inc. was slightly improved a day after pricing, a trader said.

He quoted the bond that sold at 128 bps over Treasuries at 122 bps bid, 121 bps offered.

South Carolina E&G bond flat

A new 5.5% issue of first mortgage bonds due 2039 from South Carolina Electric & Gas Co. was little-changed from where it priced the previous day, a source said. The bond priced at 130 bps over Treasuries and was quoted at 127 bps bid, 124 bps offered.

Citigroup remarket bonds tighten

A 6.01% bond due 2015 that was remarketed by Citigroup Inc. was quoted as slightly tighter in the secondary by early afternoon.

The bond sold at 350 bps over Treasuries on Wednesday and was quoted at 347 bps bid, 343 bps offered, a trader said.

A day after its successful $1.875 billion remarketing, two of its other bonds became active in the secondary. Those Citigroup bonds were a 6.375% due in 2014 and an 8.5% due in 2019.

Bank, broker CDS mostly improve

Credit-default swaps for bank and brokerage names were mixed but mostly moved tighter by late in the day, a trader in that sector said. The shift was mostly caused by the news from Bank of America, he said.

Bank names were anywhere from 2 bps wider to 13 bps tighter, he said. Brokerages were quoted at 2 bps wider to 17 bps tighter.

Bank of America was the biggest mover of the banking names. Its swaps tightened 13 bps to 112 bps bid, 117 bps offered, the trader said.

Among brokerages, Merrill Lynch - which is now part of Bank of America - saw its CDS tighten by 17 bps to 122 bps bid, 127 bps offered.

GE bond tightens on NBC sale

An official announcement came early in the day that Comcast would buy NBC Universal from General Electric. This came a day after news broke of the sale.

Neither GE nor Comcast bonds were among the day's most actives in the secondary, a trader said.

Among GE's outstanding issues, a 2.25% bond due 2012 was the most active. The government-guaranteed bond was quoted at between 38 bps and 40 bps. This was slightly tighter than the 43 bps it was seen at on Nov. 30, the trader said.

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