Goldman Sachs, L-3 Communications among new paper; State Street remarkets; new debt firms

By Andrea Heisinger and Cristal Cody

New York, Feb. 2 - Goldman Sachs Group Inc., First Citizens Bank Ltd. and L-3 Communications Corp. sold bonds Wednesday on the busiest day for new deals so far this week.

Goldman Sachs announced and priced its $3.5 billion deal in two parts in short order. The sale included a tranche of three-year floating-rate notes and one of five-year notes.

Also pricing was L-3 Communications with a $650 million issue of 10-year notes that priced at the tight end of talk.

A third sale came from First Citizens Bank. The South Carolina-based financial sold $175 million of five-year notes in the Rule 144A market.

State Street Corp. was also on the radar with a remarketing of $500.1 million of notes due 2018. It was unknown whether the deal had priced at press time.

It was unclear why the primary market hasn't picked up speed so far this week, a source said late in the day. The market tone isn't necessarily to blame, she said, but there could be other factors like inclement weather weighing on issuers and investors.

"I think part of it was people were hesitant on the weather," she said. "I know bad weather kept a lot of people at home today, or they were working from home."

Overall investment-grade Trace volume dropped 10% on Wednesday to about $15.5 billion, a source said.

The Markit CDX Series 14 North American investment-grade index was flat at a spread of 83 basis points, according to Markit Group Ltd.

In secondary trading, the new debt from L-3 Communications and Goldman Sachs firmed, traders said.

Treasuries were "again lower" on Wednesday on a stronger jobs report, a source said.

The 10-year benchmark note added 5 bps to 3.48%. The 30-year bond yield rose 1 bp to 4.62%.

Payroll processor Automatic Data Processing, Inc. said private-sector employment increased by 187,000 jobs in January following a revised increase of 247,000 jobs in December. Analysts had expected a rise of 140,000 jobs.

The report was released ahead of the much-anticipated Labor Department's January job data on Friday.

L-3 deal well oversubscribed

Government communications and intelligence contractor L-3 Communications Corp. priced $650 million of 4.95% 10-year senior notes (Baa3/BBB-/BBB-) at a spread of 153 bps over Treasuries, said a source close to the deal.

The notes priced well tight of guidance in the 160 bps area, the source said. The source added that there was about $4.25 billion of interest in the bonds, mostly because there wasn't much else in the market for the day.

Barclays Capital Inc., Bank of America Merrill Lynch and Wells Fargo Securities LLC were active bookrunners.

Proceeds are being used, along with cash at hand, to redeem $650 million of outstanding 5.875% senior subordinated notes due 2015.

The sale is guaranteed by domestic subsidiaries of the New York-based company.

In the secondary market, the notes firmed to 143 bps bid, 141 bps offered, a trader said. Another trader saw the notes 1 bp firmer on the offer side at 140 bps.

Goldman's quick deal

Goldman Sachs Group sold $3.5 billion of notes (A1/A/A+) in two tranches in a quick turnaround, an informed source said.

The $1 billion of three-year floating-rate notes priced at par to yield Libor plus 100 bps.

A $2.5 billion tranche of 3.625% five-year notes sold at a spread of Treasuries plus 158 bps.

Goldman Sachs & Co. was the bookrunner.

Soon after pricing, the notes due 2016 traded in the secondary market at 152 bps bid, 150 bps offered, a trader said.

Another trader saw the notes 1 bp wider on the bid side at 153 bps bid, 150 bps offered in the late afternoon.

The financial services company is based in New York.

First Citizens' private sale

First Citizens Bank priced $175 million of 4.903% five-year senior notes (/BBB+) at 280 bps over Treasuries, a source away from the sale said.

They were sold under Rule 144A.

J.P. Morgan Securities LLC was the bookrunner.

The subsidiary of bank holding company First Citizens Bancorporation, Inc. is based in Columbia, S.C.

State Street remarketing notes

State Street announced a remarketing of $500.1 million of junior subordinated debentures due 2018 on Wednesday.

The remarketed notes did not appear to have priced by late afternoon, a source away from the deal said.

The notes are non-callable, according to a 424B5 filing with the Securities and Exchange Commission.

Goldman Sachs is the remarketing agent.

Proceeds are being used to make a final distribution to holders of the company's 8.25% fixed-to-floating-rate normal automatic preferred enhanced capital securities (Normal APEX), which were offered in connection with the original debentures, and for general corporate purposes.

The financial holding company is based in Boston.

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