Torrent of trades continues with Shell, RBC, McKesson among issuers; Rubbermaid notes firm

By Aleesia Forni and Andrea Heisinger

New York, Nov. 29 - New bonds continued to inundate the high-grade primary market on Thursday with sales from Shell International Finance BV, Royal Bank of Canada and Swiss Reinsurance Treasury (US) Corp., among others.

Shell priced $1.75 billion of notes in two parts.

RBC was in the U.S. bond market with a $1.5 billion offering of five-year covered bonds.

Swiss Re sold $750 million of bonds with maturities of 2022 and 2042 via Rule 144A.

A $900 million offering of notes with three-year and 10-year maturities was priced by McKesson Corp.

Consumer and commercial products maker Newell Rubbermaid Inc. sold $350 million of five-year notes. The size of the trade was increased from $300 million.

Cruise operator Carnival Corp. priced $500 million of five-year notes.

There was a $150 million sale of floating-rate notes due 2014 from Caterpillar Financial Services Corp.

In the preferred stock market, Comcast Corp. priced $250 million of $25-par notes due 2061 with a size of at least $250 million.

Friday is expected to be "a lot quieter" than the first four days of the week that have seen an unending stream of new offerings.

"It's been nice to have a full week, a lot of trades," a market source said.

The continued standoff in Congress over the coming fiscal cliff hasn't stopped bond issuers from taking advantage of the steady tone.

"There hasn't been much terrible news, so I guess that's nice," the market source said.

The secondary market saw Newell Rubbermaid's notes trade 9 bps better near the end of the session, one trader said.

Both tranches of McKesson's new deal firmed late on Thursday, while the new notes from Shell tightened 2 bps to 10 bps.

Shell's existing bonds due 2019 were trading 5 bps wider near the day's close.

Active bank paper on Thursday included Bank of America's 7.375% notes due 2014 and Morgan Stanley's 5.625% notes due 2019, both performing better on the day.

Another trader saw bonds from Hewlett-Packard Co. "continuing to rally" on Thursday following Moody's Investors Service's downgrade of the company to Baa1 from A3.

HP's 4.65% bond due 2021 was among the day's most actively traded deals and was quoted roughly 20 basis points better.

In recent deals, all three tranches of Costco Wholesale Corp.'s $3.5 billion of notes traded tighter on Thursday.

Both tranches of American Electric Power Co., Inc.'s $850 million issue of senior notes, which sold in two tranches on Wednesday, were quoted 4 bps better.

Shell brings two tranches

Shell International Finance sold $1.75 billion of guaranteed notes (Aa1/AA/AA+) in two maturities, a source away from the trade said.

A $750 million tranche of 0.625% three-year notes sold at a spread of Treasuries plus 30 bps.

A trader quoted the notes at 32 bps bid, 28 bps offered.

There was also $1 billion of 2.25% 10-year notes priced at 75 bps over Treasuries.

The notes were seen trading at 78 bps bid, 71 bps offered near the end of the day.

Bookrunners were Barclays and Goldman Sachs & Co.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by Royal Dutch Shell plc.

Shell was last in the U.S. bond market with a $2.5 billion offering in three tranches on August 14. That sale included a 2.375% 10-year note sold at Treasuries plus 70 basis points.

The oil and gas company is based in The Hague, the Netherlands.

McKesson's $900 million

McKesson tapped the market for $900 million of notes (Baa2/A-/A-) in two tranches, a market source said.

A $500 million tranche of 0.95% three-year notes sold at a spread of Treasuries plus 65 bps.

A trader saw the notes 10 bps tighter at 55 bps bid, 53 bps offered.

The second part was $400 million of 2.7% 10-year notes priced at 110 bps over Treasuries.

The notes were trading at 98 bps bid, 95 bps offered late in the session.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of $500 million of 5.25% notes due March 1, 2013, and to replenish working capital used to repay $400 million of 7.75% notes maturing on Feb. 1, 2012.

McKesson was last in the bond market with a $1.7 billion sale in three tranches on Feb. 23, 2011. The offering included a 4.75% 10-year note sold at 130 basis points over Treasuries.

The health care services and information technology provider is based in San Francisco.

RBC offers covered bonds

The Royal Bank of Canada was in the market with a $1.5 billion sale of three-year covered bonds (Aaa//AAA) priced at mid-swaps plus 20 bps, an informed source said.

The notes sold in line with price guidance in the mid-swaps plus 20 bps area.

Full terms of the trade were unavailable at press time.

Bookrunners were Citigroup Global Markets Inc., RBC Capital Markets LLC and UBS Securities LLC.

The financial services company is based in Toronto.

Swiss Re prices privately

Swiss Re Treasury sold $750 million of notes (A1/AA-/) in two tranches, a source close to the trade said.

The sale included $250 million of 2.875% 10-year notes priced at a spread of Treasuries plus 130 bps.

There was also $500 million of 4.25% 30-year bonds sold atTreasuries plus 155 bps.

Pricing was done under Rule 144A and Regulation S.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC were bookrunners.

The issuer is an Armonk, N.Y.-based unit of Swiss Reinsurance Co. Ltd., the reinsurance company based in Zurich, Switzerland.

Rubbermaid ups five-years

Newell Rubbermaid sold an upsized $350 million of 2.05% five-year notes (Baa3/BBB-/BBB) to yield 145 bps over Treasuries, an informed source told Prospect News.

The notes were quoted at 136 bps bid, 131 bps offered.

The size was increased from $300 million, the source said.

Bookrunners were Barclays and Citigroup Global Markets Inc.

Proceeds, together with cash on hand and short-term borrowings, are being used to redeem $500 million of 5.5% notes due 2013.

Newell Rubbermaid last tapped the bond market with a $500 million sale in two maturities on June 11.

The consumer and commercial products maker is based in Atlanta.

Carnival's guaranteed notes

Carnival was in the market with a $500 million sale of 1.875% five-year senior notes (A3/BBB+/) priced at Treasuries plus 130 bps, a market source said.

Goldman Sachs & Co., J.P. Morgan Securities LLC, RBS Securities Inc. and UBS Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes, including repaying portions of various debt facilities maturing in 2013.

The sale is guaranteed by Carnival plc.

The cruise company is based in London.

Caterpillar's floaters

Caterpillar Financial Services sold $150 million of floating-rate medium-term notes (A2/A/) at par to yield Libor plus 10 bps, according to an FWP with the Securities and Exchange Commission.

Bookrunner was J.P. Morgan Securities LLC.

The funding arm of heavy equipment maker Caterpillar is based in Nashville, Tenn.

U.S. Airways pass-throughs

U.S. Airways priced an upsized $546.184 million of class A and class B pass-through certificates, according to an FWP filing with the SEC

The total size of the offering has been increased from $476.696 million.

The sale includes $418.113 million, upsized from $364.919 million, of 4.625% class A certificates (Ba1/BBB/A-) priced at par to yield 4.625%. There is a final expected distribution on June 3, 2025, final maturity of Dec. 3, 2026 and an initial average life of 8.3 years.

There's also $128.071 million, increased from $111.777 million, of 6.75% class B certificates (B1/B+/BB-) priced at par to yield 6.75%. The certificates have a distribution date of June 3, 2021 and final maturity of Dec. 3, 2022, with an initial average life of seven years.

Bookrunners were Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

Proceeds are being held in escrow, then used to acquire equipment notes for aircraft financing.

The sale is guaranteed by US Airways Group, Inc.

The commercial airline holding company is based in Tempe, Arizona.

Comcast's $25-par deal

Comcast sold $250 million of 5% $25-par senior notes due Dec. 15, 2061, according to an FWP filed with the SEC.

Price talk is 5% to 5.125% and the size is expected to be at least $250 million, a trader said.

"I was kind of shocked they brought this deal," a trader said, noting that it "seems a little aggressive on the yield."

The issue was trading at $24.63 bid, $24.72 offered in the gray market as of midday, the trader said.

At the close, the issue was trading at $24.55 bid, $24.63 offered.

Comcast will apply to list the notes on the New York Stock Exchange under the ticker symbol "CCV."

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC are bookrunners.

Proceeds will be used for general corporate purposes and working capital.

Comcast is a Philadelphia-based provider of entertainment, information and communication products and services.

Bank of America tightens

In other trading, Bank of America's 7.375% notes due 2014 firmed 2 bps to 107 bps bid during the session.

The bank priced $3 billion notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

Morgan Stanley active

The 5.625% notes from Morgan Stanley due 2019 were among the day's most actively traded deals on Tuesday and closed the session 16 bps tighter at 190 bps bid.

The bank sold $3 billion of the notes at 225 bps over Treasuries on Sept. 16, 2009.

Shell bonds weakens

Shell's existing 4.3% notes due 2019 closed the session 5 bps wider at 20 bps bid, according to a market source.

The notes sold at a spread of 90 bps over Treasuries on Sept. 15, 2009.

HP bonds rally

HP's 4.65% bond due 2021 saw some activity on Thursday, with a trader quoting the notes at 350 bps bid, 340 bps offered.

The company priced $1.5 billion of the bonds at 260 bps over Treasuries on Dec. 6, 2011.

Costco firms

Wednesday's $1.2 billion issue of 0.65% three-year notes from Costco Wholesale's was trading 3 bps better at 32 bps bid, 29 bps offered, a trader said.

The notes sold at a spread of Treasuries plus 35 bps on Wednesday.

Meanwhile, the $1.1 billion tranche of 1.125% five-year notes was quoted 4 bps tighter at 46 bps bid, 43 bps offered following Wednesday's pricing with a spread of 50 bps over Treasuries.

The $1.2 billion 1.7% 10-year notes firmed 2 bps to 68 bps bid, 65 bps offered.

The notes sold at a spread of Treasuries plus 70 bps.

The membership warehouse is based in Issaquah, Wash.

AEP notes better

In other recent deals, American Electric Power's $550 million of 1.65% five-year notes was quoted at 101 bps bid, 98 bps offered. The notes sold with a spread of Treasuries plus 105 bps.

The $300 million tranche of 2.95% 10-year notes traded at 131 bps bid, 128 bps offered.

The Columbus, Ohio-based electric utility priced the notes due 2022 with a spread of Treasuries plus 135 bps.

Stephanie N. Rotondo contributed to this review

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