Lowe's, Genworth, Dun & Bradstreet, Continental get deals done; bank, financial paper firms

By Andrea Heisinger and Cristal Cody

New York, Nov. 17 - Lowe's Cos., Inc., Genworth Financial, Inc., Dun & Bradstreet Corp., California Water Service Co. and Continental Airlines, Inc. priced bonds on Wednesday as volume picked up steam following a slow day.

Home improvement retailer Lowe's priced $1 billion of notes due 2016 and 2021. Both of the tranches priced at the tight end of guidance.

For the second time in the past week, an airline priced passthrough certificates. Continental sold $427.15 million of class A and B certificates due 2022 and 2020. A similar deal was priced on Monday by Delta Air Lines, Inc.

Business information provider Dun & Bradstreet priced $300 million of five-year notes in a quick sale.

Genworth increased the size of its sale from what was originally announced. The notes due 2021 were upsized to $400 million from $300 million and priced in line with guidance.

California Water Service priced its $100 million of 30-year first mortgage bonds after the deal went overnight.

Utility Entergy Louisiana, LLC is planning a minimum $100 million sale of retail first mortgage bonds on Thursday. They will be priced at $25 each.

The market tone was "a little better," said a source who worked on the Lowe's deal. "I haven't heard or seen that it was any worse."

There is at least one sale on tap for Thursday and "possibly a couple of others," one source said. The source added that issuers are still trying to access the debt market ahead of the Thanksgiving holiday and there are only three or four days left to do that.

Overall investment-grade Trace volume was flat at about $12 billion on Wednesday, according to a market source.

In the secondary market, new debt traded stronger. Dun & Bradstreet's notes tightened more than 10 basis points, and financial paper rallied after more than a week of weaker performance, traders said.

Cable, communications and media bonds firmed 3 bps to 5 bps, including debt from Sprint Nextel Corp., which had widened after Moody's Investors Service said it may downgrade the Overland Park, Kan.-based company's Ba2 rating.

"Sprint bonds, which had gotten crushed over the last week, are up about a point today," a trader said.

The Markit CDX Series 14 North American investment-grade index closed out Wednesday 1 bp tighter at a spread of 93 bps, Markit Group Ltd. said.

Treasuries were stronger early Wednesday and then fell in a late-afternoon sell-off. The 10-year benchmark note yield rose 5 bps to 2.88%. The 30-year bond yield rose 3 bps to 4.29%.

Lowe's sells $1 billion

Lowe's priced $1 billion of senior notes (A1/A/A) in two parts in front of the market close, a source close to the deal said.

A $475 million tranche of 2.125% notes due 2016 priced at a spread of Treasuries plus 68 bps. They were initially whispered in the mid 70 bps area, and they priced at the tight end of revised talk in the 70 bps area, plus or minus 2 bps.

The $525 million of 3.75% notes due 2021 sold at a spread of 88 bps over Treasuries. Price talk was whispered in the mid 90 bps area and then revised to the 90 bps area, plus or minus 2 bps. The notes priced at the tight end of revised guidance.

There was about $2 billion of demand on the books, a source said.

"It was skewed a little toward the 10-year," the source said. "The 10-year was increased a little and the five-year decreased a little to handle that."

Initially, the source said, the two tranches were expected to be $500 million each.

A source away from the trade said that it was good to hear there was interest in the 10-year maturity because "we've seen lackluster books on the 10-year lately."

Wells Fargo Securities LLC was active bookrunner, and U.S. Bancorp Investments was passive.

Proceeds are being used for general corporate purposes including capital expenditures, working capital and to fund the repurchase of common stock.

In the secondary market, Lowe's new notes due 2016 firmed to 67 bps bid, 64 bps offered by early afternoon, a trader said.

The six-year notes were seen closing the day out tighter at 66 bps bid, 63 bps offered.

The second tranche of notes due 2021 firmed to 84 bps bid, 81 bps offered and later in the day to 83 bps bid, 80 bps offered, traders said.

The home improvement retailer is based in Mooresville, N.C.

Genworth upsizes

Genworth Financial priced an upsized $400 million of 7.2% senior notes due 2021 by mid-afternoon to yield 7.25%, a source away from the sale said.

The notes were talked in the 7.25% yield area and priced in line with that. The original size of the sale was $300 million, and the increase was based on demand, a source said.

The notes (Baa3/BBB) sold at a spread of 438.3 bps over Treasuries.

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

Proceeds are being used to repay borrowings under two five-year revolving credit facilities along with cash at hand.

The insurance and financial services company is based in Richmond, Va.

Dun & Bradstreet's five-year

Dun & Bradstreet priced $300 million of 2.875% five-year senior notes (/A-/A-) to yield Treasuries plus 150 bps, a source away from the trade said.

The bookrunners were Barclays Capital Inc. and JPMorgan.

Proceeds are being used for general corporate purposes including the redemption or repurchase of $300 million of outstanding 5.5% senior notes due 2011.

The notes firmed more than 10 bps in secondary trading, sources said.

"They were at 137, 133 last I saw," one trader said.

The business information provider is based in Short Hills, N.J.

California Water prices

California Water Service offered $100 million of 5.5% 30-year first mortgage bonds, series PPP, (/AA-) at a price of 99.416, according to a press release.

The sale was announced in a 424B5 filing with the Securities and Exchange Commission on Tuesday.

Robert W. Baird & Co. and Blaylock Robert Van, LLC were the bookrunners.

Proceeds are going to repay the balance of a syndicated revolving line of credit and for general corporate purposes like increasing working capital, making capital expenditures, acquiring assets and for other business opportunities.

The deal is guaranteed by the California Water Service Group.

The holding company for the water utility is based in San Jose, Calif.

Continental sells passthroughs

Continental Airlines sold $427.151 million of class A and B passthrough certificates, series 2010-1 by early afternoon.

The $362.659 million of 4.75% class A certificates (Baa2/A-) due 2022 priced at par to yield 4.75% with a spread of Treasuries plus 263 bps, according to an FWP filing with the SEC.

The $64.492 million of split-rated 6% class B certificates (Ba2/BBB-) due 2020 sold at par to yield 6% with a spread of 453.3 bps over Treasuries.

Morgan Stanley & Co. Inc., Credit Suisse Securities USA LLC, Goldman Sachs & Co., Deutsche Bank Securities Inc. and JPMorgan were the bookrunners for both certificates.

Proceeds are being used to purchase three Boeing aircraft for delivery between December and March, to purchase three Boeing aircraft for delivery between December and April and to refinance 12 aircraft.

The class A certificates due 2021 traded in the secondary market at 101.25 bid, 101.5 offer, while the class B certificates due 2019 were quoted at 100.5 bid, according to a source.

The commercial airline is based in Houston.

Entergy unit plans sale

Entergy Louisiana announced a sale of first mortgage bonds in a 424B2 filing with the SEC.

A source said the size is $100 million but will likely grow. Pricing is planned for Thursday.

The bonds will be priced at $25 each. Proceeds are going to be used for general corporate purposes.

Citigroup Global Markets Inc., Morgan Stanley and Wells Fargo Securities LLC are the bookrunners.

The utility is based in Baton Rouge, La.

Financial paper firms

Bank and financial paper traded better on Wednesday after spending a week widening out 5 bps to 10 bps, sources said.

"Financials are 5 to 7 basis points better," a trader said.

Genworth Financial's new 7.2% notes due 2020 traded up about a point in the secondary, a trader said.

One trader saw the notes at 100.75, 101.00.

Another trader quoted Genworth's notes at 423 bps bid, 417 bps offered.

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