Oncor Electric Delivery, First Midwest Bank, Aviva tap market; Morgan Stanley paper firms

By Andrea Heisinger and Cristal Cody

New York, Nov. 18 - There was a small amount of high-grade bond issuance to cap the hectic week on Friday.

There was a deal under Rule 144A from Oncor Electric Delivery Co. LLC. The utility sold $300 million of 30-year bonds.

First Midwest Bancorp, Inc. priced $115 million of five-year notes to repay the Treasury for preferred stock it sold under the Troubled Asset Relief Program.

Aviva plc sold $400 million of $25-par 30-year capital securities two days after the deal was announced.

"There were more deals today than I thought there would be," a market source said after the close. "Oncor took forever to launch and price."

The coming week is not expected to be as jam-packed with new deals as the past one was. There are "only really two days to issue" due to the Thanksgiving holiday at the end of the week and the fact that many people on syndicate desks will not be working on Wednesday.

"I would expect a few things [on Monday] but otherwise, nothing too crazy," one syndicate source said. "I can't imagine there are too many deals waiting to price after the week we had."

Bonds traded mostly flat on Friday in light trading. The Markit CDX Series 17 North American Investment Grade index closed the day unchanged at a spread of 136 basis points.

No immediate trading was seen in First Midwest Bancorp's new notes, a source said.

"Pretty quiet afternoon prior to next week's likely slowness," the source said. "Not much is expected before the holiday. We had a couple new issue deals today but nothing to grab the market's attention. Spreads were a little stronger this morning, but optimism faded as the day wore on."

Overall trading volume fell 10% to less than $10.5 billion.

Bank and financial paper continued to widen. Bank of America Corp.'s notes were out another 45 bps in trading on Friday. Morgan Stanley paper, though, traded better, according to sources.

"Morgan Stanley [had been] topping the list of the sloppiest lately, and Goldman Sachs its co-broker," one bond source said.

Treasuries ended weaker as market tone improved on a drop in Italian sovereign debt yields and the European Central Bank's intervention in the markets.

The 10-year Treasury note yield rose 6 bps to 2%. The 30-year bond yield rose to 2.99% from 2.96%.

Oncor prices privately

Oncor Electric Delivery priced $300 million of 4.5% 30-year senior secured bonds (Baa1/A-/BBB+) to yield 160 bps over Treasuries, an informed source said.

The deal was done under Rule 144A and Regulation S.

Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBS Securities Inc. were the bookrunners.

The electric company is based in Dallas.

First Midwest's five-year

First Midwest Bancorp sold $115 million of 5.875% five-year senior notes to yield 6%, according to an FWP filing with the Securities and Exchange Commission.

The notes (Baa1/BBB-/BBB-) were priced at a spread of Treasuries plus 507.9 bps.

The trade features a coupon step-up of 25 bps per rating notch downgrade per agency below investment grade with a maximum of 200 bps.

Goldman Sachs & Co. was the bookrunner.

Proceeds will be used to repurchase 193,000 shares of cumulative perpetual preferred stock, series B, from the Treasury for $193 million plus accrued dividends. The preferreds were sold under the Troubled Asset Relief Program.

The bank holding company is based in Itasca, Ill.

Aviva prices, fades

Aviva, a London-based insurer, doubled the size of its capital securities sale to $400 million.

The company is issuing 8.25% 30-year $25-par capital securities. Pricing came in at the low end of price talk.

A trader said he heard the deal was "not going to free today," pegging the issue at $24.65.

"Last I saw, it was fading," said another market source, quoting the notes at $24.62 bid, $24.72 offered.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the joint bookrunning managers.

Proceeds will be used for general corporate purposes. The company expects the funds will be counted toward regulatory capital requirements.

Morgan Stanley firms

Morgan Stanley's 5.5% notes due 2021 traded about 4 bps firmer on the day, a source said.

"Not a lot of trading," the source said.

Morgan Stanley sold $1 billion in an add-on to the Oct. 27 issue (A2/A/A) at a spread of Treasuries plus 335 bps.

The financial services company is based in New York.

Bank of America widens

Bank of America's 7.625% notes due 2019 traded 45 bps wider on Friday to a spread of 500 bps, a bond source said.

The issue was sold in May 2009 at a spread of 410 bps over Treasuries.

The investment services company is based in Charlotte, N.C.

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