DirecTV, KeyCorp, Great Plains Energy, Statoil price deals; Anadarko bonds wider in secondary

By Andrea Heisinger and Cristal Cody

New York, Aug. 10 - DirecTV Holdings LLC and DirecTV Financing Co., Inc., Great Plains Energy Inc., KeyCorp and Norway's Statoil ASA priced deals on Tuesday as the pace slowed ahead of the Federal Reserve meeting that wrapped in the afternoon.

The Fed ended up holding key rates steady at near zero, and most of the day's sales priced after that announcement. There was new fear planted, however, by the Fed's announcement that it would buy long-term Treasury bonds in light of the continuing economic slowdown.

DirecTV was the last to price its $3 billion sale of bonds in three tranches. They priced late due to the size of the deal, a source said.

Only Great Plains Energy priced ahead of the Fed announcement. The utility sold $250 million of three-year notes in short order.

KeyCorp priced its upsized $750 million deal of five-year notes by mid-afternoon. The size was increased by $250 million.

Statoil increased the size of its deal significantly to $2 billion from $1.25 billion. The sale consisted of notes in seven-year and 30-year maturities.

At least three of the day's sales - including Great Plains, KeyCorp and Statoil - sold at the tight end of guidance.

The new bonds from Statoil, DirecTV and Great Plains were tighter in secondary trading, while the $2 billion of high-grade debt that Anadarko Petroleum Corp. sold on Monday weakened in next-day trading, according to sources.

The CDX Series 14 North American investment-grade index eased 3 basis points to a spread of 105 bps, according to a source.

Overall investment-grade Trace volume jumped nearly 40% to almost $14 billion, according to a source.

Industrial investment-grade debt firmed in the secondary market on the Fed's plan to buy Treasuries, a trader said.

"It's all 1 to 2 basis points tighter. It widened out a little in the morning and came back. It's all the Fed."

Treasuries were up on the Federal Reserve announcement.

The yield on the 10-year Treasury note fell as low as 2.759% before ending 7 bps lower at 2.76%.

The yield on the 30-year bond dropped 2 bps to 4%.

Statoil prices two tranches

Oil and gas production company Statoil priced an upsized $2 billion of notes (Aa2/AA-) in two tranches, a market source close to the deal said.

The sale was increased by $750 million from an initially announced size of $1.25 billion. The size of the seven-year tranche was doubled.

A $1.25 billion tranche of 3.125% seven-year notes priced at a spread of Treasuries plus 95 bps. This was at the tight end of guidance in the 100 bps area.

The second tranche of $750 million in 5.1% 30-year bonds priced at 115 bps over Treasuries. Price guidance was in the 120 bps area.

The bookrunners were Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc.

In the secondary, the notes due 2017 firmed in trading to 92 bps bid, 90 bps offered, a trader said.

The bonds due 2040 initially widened on the bid side to 117 bps after they were released to the secondary market but ended the day stronger. The bonds were last quoted tightening at 113 bps bid, 107 bps offered, the trader said.

The issuer is based in Stavanger, Norway.

DirecTV sells $3 billion

DirecTV Holdings and DirecTV Financing priced $3 billion of senior unsecured notes (Baa2/BBB/BBB-) in three tranches late in the day, an informed source said.

A $750 million tranche of 3.125% notes due 2016 priced at a spread of 170 bps over Treasuries.

The second tranche was $1 billion of 4.6% notes due 2021 priced at Treasuries plus 185 bps.

The final tranche of $1.25 billion in 6% 30-year bonds sold at a spread of Treasuries plus 210 bps.

The deal is guaranteed by some DirecTV subsidiaries.

The bookrunners were Citigroup Global Markets Inc. and JPMorgan.

Proceeds are being used for general corporate purposes, including the repayment of borrowings under the company's term loans A and B, the repayment of a portion of a senior secured credit facility and a distribution to the parent company for its share repurchase plan.

The notes due 2016 were seen tighter in late secondary trading at 165 bps offered, a trader said.

The other two tranches were not immediately active in the secondary.

"Too early," the trader said.

The satellite TV and digital entertainment provider is based in El Segundo, Calif.

Deals price despite Fed

It was another busy day in the high-grade primary, with more deals expected in the coming day or two. Issuers weren't scared off by the Fed meeting and afternoon announcement, with most pricing after it had concluded.

It's unclear when or if there will be a slowdown, but one source said it's not likely to happen for the next couple of weeks.

"We're on a roll," he said. "Everyone's still wanting these low [coupons]." He was referring to issuers.

Several companies have gotten record-low borrowing rates in the past few weeks, and others are rushing to the market to take advantage of rates before a headline or event derails them.

Unlike Monday, there weren't any split-rated deals in the market, with all of the deals firmly on the high-grade side.

There is a $2.5 billion split-rated sale in three tranches expected from International Lease Finance Corp. on Wednesday.

As for the tone on Tuesday, it wasn't much rattled from the word coming out of the Fed, one market source who worked on one of the day's deals said.

"Other than a couple of people trying to get in before [the announcement], it wasn't a big deal," he said.

KeyCorp upsizes

KeyCorp priced an upsized $750 million of 3.75% five-year senior medium-term notes (Baa1/BBB+/A-) by mid-afternoon at a spread of 225 bps over Treasuries, a syndicate source away from the deal said.

They priced at the tight end of guidance in the range of 225 to 237.5 bps.

The size was increased from a planned $500 million. The company is something of an infrequent issuer, and there was demand for the bonds accordingly.

The company last sold bonds on March 10, 2009 in a $437.5 million deal of floating-rate notes backed by the Federal Deposit Insurance Corp. KeyCorp's last sale of notes that weren't backed by the FDIC was done on May 7, 2008, when it priced $750 million of 6.5% five-year notes at a spread of 350 bps.

JPMorgan, KeyBanc Capital Markets and Morgan Stanley & Co. Inc. were the bookrunners for the new deal.

Proceeds are going to general corporate purposes.

The notes due 2015 widened on the bid side and firmed on the offer side in secondary trading, traders said.

Initially, the notes were seen at 224 bps offered and by late afternoon traded at 226 bps bid, 224 bps offered.

The financial services company is based in Cleveland.

Great Plains sells three-years

Great Plains Energy sold $250 million of 2.75% three-year senior unsecured notes (Baa3/BBB-) by early afternoon at Treasuries plus 195 bps, a source close to the deal said.

The size stayed the same as what was initially announced. The notes were priced at the tight end of guidance in the 200 bps area, with a margin of plus or minus 5 bps.

Barclays and BNP Paribas Securities ran the books.

Proceeds are being used for an intercompany loan to Kansas City Power & Light Greater Missouri Operations Co. with the same maturity date, interest rate and payment terms as the notes. That subsidiary is using the proceeds to repay all or a portion of short-term borrowings under a revolving credit facility.

In the secondary market, the notes due 2013 traded 3 bps tighter on the bid side at 192 bps, a source said.

The holding company for utility subsidiaries is based in Kansas City, Mo.

Anadarko widens

Anadarko Petroleum's new bonds priced the previous day widened in the secondary market on "very aggressive pricing" on Tuesday, a trader said.

Anadarko priced $2 billion of 6.375% notes (Ba1/BBB-/BBB-) due 2017 late Monday at a spread of Treasuries plus 415.6 bps.

"The Anadarko deal didn't do so hot. It's traded down about three-quarters and is going out a half to three-quarters," the trader said. "You get anywhere close to par and it's going to be sellers."

The oil and gas exploration and production company is based in the Woodlands, Texas.

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