BB&T, Willis, Thomson Reuters, EDP, Allegheny Energy, Jefferies price; bond moves modest

By Andrea Heisinger

New York, Sept. 22 - BB&T Corp., Willis North America Inc., Thomson Reuters Corp., EDP Finance BV, Allegheny Energy Supply Co. LLC and Jefferies Group, Inc. sold small issues of investment-grade bonds on Tuesday.

An upcoming sale of 30-year public income notes was also announced by Vornado Realty, LP late in the day.

Nearly all of the day's offerings were sold in short order and were in a single tranche.

Willis North America upsized its sale of senior notes to $300 million of 10-year paper. Thomson Reuters kept the size of its sale steady at $500 million in 10-year senior notes.

BB&T increased the size of its offering by $150 million, bringing it to $500 million of four-year medium-term notes.

Allegheny Energy sold its two tranches via Rule 144A, and they totaled $600 million in 10- and 30-year notes.

One of the only foreign issues of the day came from EDP Finance, which sold $1 billion of 10-year notes tighter than guidance.

Jefferies Group reopened its 8.5% notes due 2019 and added $300 million to the original sale from June.

Wednesday is seen as slow for new deals, sources said, as the two-day meeting of the FOMC wraps up. Volume should pick up on Thursday.

Nearly all of the new and recently priced bonds were tighter once freed for the secondary, traders said.

On the financial side, BB&T, Jefferies and Willis North America all tightened. Willis came in more than 30 basis points.

The new non-financial bonds moved in modestly, most by 10 to 15 bps or less. The new Allegheny Energy paper was unchanged to 10 bps tighter, while Thomson Reuters barely moved.

A recently priced bond from GATX Corp. bucked this trend and tightened by 20 to 25 bps.

Spreads were generally wider as Treasury yields moved slightly tighter by late afternoon. The 10-year note was 3 bps better at 3.45% and the five-year note was also in 3 bps to 2.42%.

Thomson Reuters sells $500 million

Thomson Reuters sold $500 million in 4.7% 10-year senior unsecured notes at Treasuries plus 130 bps.

The notes were sold well inside guidance in the mid-100 bps, the source said. The market was "very receptive," said the source, who also called the deal an "allocation nightmare" and a "blowout," although he declined to say how many times it was oversubscribed.

Bookrunners were Barclays Capital Inc., Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc.

Proceeds will be used to retire the company's 4.75% notes due 2010, 7.74% notes due 2010 and 6.85% notes due 2011 in the fourth quarter.

The news and information company is based in New York City.

Jefferies retaps 8.5% due 2019

Jefferies Group reopened its 8.5% issue of notes due 2019 to add $300 million.

The notes were priced at Treasuries plus 425 bps.

There was no official price guidance for the reopening, an informed source said. Instead, they looked at concessions for the company's outstanding bonds, which were at 415 to 420 bps.

Books totaled more than $800 million, the source said.

Total issuance is $700 million, including $400 million issued on June 30 at 512.5 bps over Treasuries.

Bookrunners were Jefferies & Co., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

Proceeds will be used for general corporate purposes, including further development of the company's businesses.

The securities and investment bank is based in New York City.

BB&T upsizes four-year

BB&T sold an upsized $500 million 3.375% four-year medium-term notes at Treasuries plus 140 bps.

The size was originally $350 million, a source said.

Bookrunners were BB&T Capital Markets, Credit Suisse Securities and UBS Investment Bank.

Proceeds are going for general corporate purposes.

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

Fed meeting to slow market

A two-day meeting of the Federal Reserve's Federal Open Market Committee that started Tuesday and concludes Wednesday is likely to mean little issuance in the coming day, sources said late in the afternoon.

"It should be quiet tomorrow," a syndicate source said. "We have one guy waiting until Thursday. I could see that being a trend."

Another source agreed, and said he had nothing on the calendar for the coming day.

"I think [issuers] will skip tomorrow and [get] back to work Thursday," he said.

Not much is expected to change at the meeting. Short-term interest rates are expected to remain at about zero.

The Fed meeting may have explained why there was a rush to the investment-grade bond market on Tuesday, a market source said.

"I think they were just all trying to get in," he said. "They were all probably planned. They were announced early [in the day]."

Willis offers guaranteed 10-year

London-based global insurance broker Willis North America priced an upsized $300 million of 7% 10-year senior notes at Treasuries plus 362.5 bps.

The size was initially announced at $250 million in a filing with the Securities and Exchange Commission. The deal is guaranteed by Willis Group Holdings Ltd.

Bookrunners were Bank of America Merrill Lynch and JPMorgan.

Proceeds will be used to purchase any and all outstanding notes due 2010 and for general corporate purposes.

Allegheny Energy offers two tranches

Allegheny Energy Supply priced $600 million senior unsecured notes in two tranches, according to a press release from the company and an informed source.

The $350 million of 5.75% 10-year notes priced at Treasuries plus 235 bps.

A $250 million tranche of 6.75% 30-year notes priced at 260 bps over Treasuries.

The deal was sold via Rule 144A.

Bookrunners were BNP Paribas Securities Corp., Credit Suisse Securities, Goldman Sachs & Co., Deutsche Bank Securities and Morgan Stanley.

Proceeds will be used to repay a $447 million term loan and to finance the repurchase of up to $150 million in 7.8% notes due 2011.

The electric and natural gas utility subsidiary of Allegheny Energy Inc. is based in Greensburg, Pa.

EDP Finance sells $1 billion

EDP Finance priced $1 billion of 4.9% 10-year notes at Treasuries plus 153 bps.

The price was well in from guidance of 160 to 165 bps, a source said, adding that the sale "went very well."

Barclays Capital, Citigroup and Morgan Stanley ran the books.

The financial services subsidiary of Energias de Portugal SA is based in Amsterdam.

Vornado Realty plans 30-year notes

Vornado Realty is planning a sale of 30-year public income notes, according to a 424B5 filing with the SEC.

The notes will be priced at $25 each.

Bookrunners are Bank of America Merrill Lynch, Citigroup, Morgan Stanley, UBS Investment Bank and Wells Fargo Securities.

Proceeds will be used for general corporate purposes, including repayment of debt and acquisitions.

The operating arm and issuer for real estate investment trust Vornado Realty Trust is based in New York City.

Willis bond tightens

The new 7% bond due 2019 from Willis North America was quoted as impressively tighter by a trader late in the afternoon.

It priced at 362.5 bps over Treasuries and was quoted at 330 bps bid, 325 bps offered, he said.

Jefferies 10-year in slightly

An 8.5% bond due 2019 reopened by Jefferies Group was in 5 to 10 bps by late in the day, a trader said. The issue priced at 425 bps over Treasuries and was quoted at 419 bps bid, 412 bps offered.

BB&T bond in slightly

A 3.375% note due 2013 priced by BB&T was tighter by 5 to 10 bps well after selling, a trader in the financial sector said. It sold at 140 bps over Treasuries and was at 134 bps bid, 131 bps offered.

New non-financials better

Newly priced deals from non-bank names were improved in trading nearly across the board by late in the day, a trader in that sector said.

The new 4.7% bond due 2019 from Thomson Reuters was 2 to 5 bps improved at 128 bps bid, 125 bps offered. It sold at 130 bps over Treasuries.

The two tranches from Allegheny Energy were unchanged to slightly better soon after pricing.

The 5.75% notes due 2019 were mostly unchanged at 235 bps bid, 230 bps offered. They priced at 235 bps over Treasuries.

A 6.75% tranche of notes due 2039 was priced at 260 bps and was quoted a little tighter at 252 bps bid, 247 bps offered.

Recent bonds improve

A recent offering of 4.75% notes due 2012 from GATX Corp. was one of the better performing, having tightened 20 to 25 bps from its price of 325 bps over Treasuries. It was quoted at 305 bps bid, 300 bps offered, the trader said.

Cabot Corp. saw its 5% note due 2016 move in slightly to 195 bps offered after pricing the previous day at 200 bps over Treasuries.

A new 4.7% note due 2019 from Burlington Northern Santa Fe Corp., also priced Monday, was 5 to 10 bps better, the trader said. It sold at 125 bps over Treasuries and was quoted at 120 bps bid, 115 bps offered.

Dow, Citi top trading

Outstanding bonds from Citigroup Inc. were among the most traded for the second day in a row. A bond from Dow Chemical Co. was also popular with investors.

An 8.55% bond due 2019 from Dow Chemical was seen at the top of trading by mid-afternoon, a trader said. Dow Chemical shares had risen on Tuesday as an analyst from UBS raised his price target for shares from the specialty chemical company.

An 8.5% note due 2019 from Citigroup came in behind Dow Chemical, with a somewhat recently priced note due 2014 from Citi also heavily traded.

Citigroup bonds have been popular since it priced $7 billion in two issues in the previous week.

Bank, broker CDS mixed

Bank and broker credit-default swaps were mixed by the end of the day, a trader said. Bank names were "anywhere from even to 5 [bps] tighter," he said. Brokerage names ended mixed in a range of 5 bps tighter to 5 bps wider.

Lexmark, B of A notes among movers

Lexmark International, Inc. and Bank of America Corp. were among the companies whose bonds made big shifts from the previous week, a source said late in the day.

Lexmark's 5.9% bond due 2013 was nearly 40 bps better than a week before. The printer and business products company's shares were a recommended buy within the past week.

Bank of America's 5.125% note due 2014 was about 25 bps wider. The bank is locked in charges and a possible civil lawsuit with the SEC over bonuses paid to Merrill Lynch employees.

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