Toyota Motor Credit sells floaters; coming week sees issuance drop; financials remain active

By Andrea Heisinger

New York, Dec. 9 - There was little in the way of new deals priced on Friday, with Toyota Motor Credit Corp. closing out what could be the last busy week of the year.

The U.S. financing arm of Toyota sold $465 million of one-year floating-rate notes.

Several large, multi-tranche sales were done, but not all performed well once hitting the secondary market.

The coming week is expected to see a slowdown.

"I think it's going to be a light week," a syndicate source said. "We're not seeing anything until Tuesday."

Monday is expected to be low on new deals as the "market absorbs what's coming out in the headlines and absorbs the euro news," the source said.

Talks continued in Europe, and Britain refused to sign a treaty involving stricter fiscal policies.

"We're not seeing anything concrete yet, just a lot of headlines guessing what could happen," one source said. "Today, people are buying under the headlines."

On the secondary side of the market, overall trading volume sank to about $6.7 billion, a source said, after being at $8.82 billion from the previous day.

New bonds priced on Thursday did not make many gains. Florida Power & Light Co.'s 4.125% bonds due 2042 were unchanged, as was the new paper from IDEX Corp.

First Niagara Financial Group Inc. saw its new 10-year debt move out from its price of par.

Treasury yields soared from the previous day as the euro zone talks continued.

The five-year note moved 6 basis points wider to 0.89%, while the 10-year note fared worse and moved out 9 bps. The 30-year bond widened by 12 bps.

Financial names once again were dominating the most actively traded bonds list for the day. Morgan Stanley debt was trading at high volume for the second day in a row, while American International Group Inc. and Goldman Sachs Group Inc. paper was also active, sources said.

The cost of bank and brokerage credit default swaps was unchanged to 5 bps lower across the board, a source in the sector said.

Toyota Motor Credit floaters

Toyota Motor Credit Corp. sold $465 million of one-year floating-rate notes (Aa3/AA-) at par to yield Libor plus 20 bps, according to an FWP with the Securities and Exchange Commission.

Toyota Financial Securities USA Corp. was agent.

The U.S. financing arm of Toyota is based in Torrance, Calif.

First Niagara gives terms

First Niagara Financial gave the terms of its $300 million sale of 7.25% 10-year subordinated notes, which priced at par to yield 7.25%, according to an FWP filed with the SEC.

The notes (Baa3/BBB-/BBB-) were priced at a spread of Treasuries plus 528.3 bps.

Goldman Sachs & Co. and Sandler O'Neill & Partners LP ran the books.

Proceeds are being used to consummate the acquisition of HSBC Bank USA and for general corporate purpsoes.

First Niagara last priced bonds in a $300 million sale of 6.75% 10-year notes at 306.7 bps on March 16, 2010.

Although one trader said he saw no activity in the new notes due 2021, another did. The paper was priced quoted at 101 bps bid, 102 bps offered.

The financial services company is based in Buffalo, N.Y.

Florida Power, IDEX unchanged

New debt priced on Thursday by IDEX and utility Florida Power was mostly unchanged from where it priced, a trader said.

The $600 million of 4.125% bonds due 2042 from Florida Power priced at 115 bps over Treasuries and was quoted at a bid of 115 bps. This was a little wider than the levels of 114 bps bid, 111 bps offered from soon after the notes priced.

IDEX's 4.2% notes due 2021 was quoted at 225 bps bid, 220 bps offered, which was essentially unchanged from the price of 225 bps over Treasuries.

Financials remain active

The most actively-traded bonds of the day continued to be dominated by financial names, traders said.

Morgan Stanley's 5.25% notes due in November of 2012 widened further from where they were the previous day. They were quoted at 422 bps which was nearly 25 bps wider than Thursday.

"Although [Morgan Stanley] was the most active name [...] I didn't see much at all," a trader said late in the day.

The trader quoted the 5.5% notes due 2021 at between 466 and 474 bps. The 10-years were sold on October 27 at a spread of Treasuries plus 335 bps.

A 5.7% note due 2012 from Goldman Sachs Group that was actively trading widened about 10 bps from Thursday to 316 bps, a source said.

Paul Deckelman contributed to this review

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