Questar sells long bonds; Verisk prices split-rated deal; Transocean bonds firm 20 bps-50 bps

By Andrea Heisinger and Cristal Cody

New York, Dec. 1 - Questar Pipeline Co. and Verisk Analytics, Inc. brought small bond sales to the high-grade market on Thursday on the quietest day of the week so far.

New Jersey-based Verisk priced $250 million of split-rated notes due 2019. They were sold on the high-grade syndicate desk.

Questar sold $180 million of 30-year paper in its first deal since September 2009.

The market tone was "better than it has been," but most of the week's calendar had already been exhausted, a syndicate source said.

Demand for the previous day's deals from Transocean Inc. and Vornado Realty LP left those sales two or more times oversubscribed.

Investors may have been less excited about lower-rated Verisk and the small sale from Questar that was "immediately put away," as one source said.

Friday is expected to have no issuance, although it's possible that a couple of small deals could make their way to the market if conditions hold up at the open, sources said.

"We've actually had a pretty busy [week]," one source said. "It was nice."

Corporate bonds overall were moderately better on the day. The Markit CDX Series 17 North American Investment Grade index firmed 2 basis points to a spread of 126 bps, a day after coming in 11 bps.

"Pretty strong positive tone in the credit market, and new issues have been trading stronger on the break," a bond source said. "When you look at institutional trades, the biggest deal is Transocean."

Transocean's three tranches were among the most actively traded on Thursday, and the company's bonds traded about 20 bps to 50 bps tighter in the secondary market, sources said.

In other trading, Canadian Pacific Railway Co.'s notes were seen going out tighter.

Overall trading volume climbed to $14.5 billion from about $13 billion on Wednesday.

In a sign of increased investor confidence in the financials sector, credit default swap costs on bank paper were unchanged to 15 basis points lower. CDS costs for broker paper were unchanged to 20 bps lower.

Treasuries edged lower on the long end. The 10-year note yield rose 2 bps to 2.09%. The 30-year bond yield rose 4 bps to 3.09%.

Questar's bonds

Questar Pipeline sold $180 million of 4.875% 30-year senior notes (A3/A-) to yield Treasuries plus 187.5 bps, according to an FWP filing with the Securities and Exchange Commission.

The active bookrunners were J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used to repay $145.5 million of inter-company short-term debt owed to Questar Corp. and for general corporate purposes including working capital and capital expenditures.

Questar Pipeline last priced debt in a $50 million reopening of 5.83% notes due 2018 on Sept. 8, 2009, at a spread of Treasuries plus 97 bps.

The natural gas transportation and underground storage company is based in Salt Lake City.

Verisk's split-rated deal

Verisk Analytics sold $250 million of split-rated 4.875% eight-year senior notes (Ba1/BBB-/A) to yield Treasuries plus 350 bps, according to an FWP filing with the SEC.

The bookrunners were Bank of America Merrill Lynch and JPMorgan.

Proceeds will be used for general corporate purposes, including debt repayment and to fund a portion of an unfunded pension obligation.

The notes are guaranteed by Insurance Services Office, Inc. and subsidiaries that guarantee the company's revolving credit agreement.

Verisk last priced debt in a $450 million sale of 5.8% 10-year notes at Treasuries plus 237.5 bps on March 30, 2011.

The risk analysis and financial services company is based in Jersey City.

Transocean bonds come in

One trader "saw quite a bit" on Transocean's new issue early on Thursday but "not so much later in the day."

But by late afternoon, the bonds had firmed about 20 bps to 50 bps in trading.

Early on in the session, the 5.05% notes due 2016 traded at 385 bps offered, the 6.375% notes due 2021 notes traded at 387 bps offered and the 7.35% bonds due 2041 were seen at 390 bps bid.

Later in the day, the five-year notes, which priced at 410 bps over Treasuries, firmed to 390 bps bid, 385 bps offered.

The 10-year notes traded in to 385 bps bid, 380 bps offered from the issue price of 430 bps plus. The 30-year bonds tightened 50 bps from issuance to 380 bps bid, 375 bps offered.

Transocean sold $2.5 billion of the senior notes (Baa3/BBB-/BBB-) in three tranches on Wednesday.

The offshore oil and gas drilling contractor is based in Zug, Switzerland.

Canadian Pacific tightens

Canadian Pacific Railway's new 5.75% bonds due 2042 (Baa3/BBB-) traded "in about 5 basis points or so today," a source said.

The notes, which priced at 97.584 to yield 300 bps plus Treasuries on Monday, were quoted going out at 99.60 on Thursday.

Canadian Pacific Railway sold the bonds in a $500 million dollar-denominated offering (Baa3/BBB-) on Monday. On Tuesday, the company priced C$125 million of 5.1% medium-term notes due Jan. 14, 2022 (DBRS: BBB) in Canada.

The railroad operator is based in Calgary.

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