Honeywell, UnitedHealth, Viacom, Thermo Fisher among primary entrants; utility bonds firm

By Andrea Heisinger and Cristal Cody

New York, Feb. 14 - Honeywell International Inc., UnitedHealth Group, National Rural Utilities Cooperative Finance Corp., Viacom Inc. and Thermo Fisher Scientific Inc. sold bonds on Monday in one of the more lively markets lately.

Honeywell busted out of the gates early on, announcing guidance and launching its $1.4 billion deal in two tranches early in the day. "[Honeywell] beat the crowd," a source away from the deal said. "A lot of people jumped on that one."

The sale was heavily oversubscribed and priced at the tight end of guidance.

Also heading to the primary was UnitedHealth with a $750 million deal in maturities of 10 years and 30 years. Both notes came in at the tight end of the guidance range.

Thermo Fisher priced the largest deal of the day at $2.2 billion in three parts.

Entertainment and TV company Viacom tapped the market for $500 million of new 10-year notes. The sale was almost two times oversubscribed.

A lender to electric cooperatives, National Rural Utilities, sold $300 million of five-year collateral trust bonds early in the day.

Issuance for the week is estimated at $20 billion, sources said. It's expected to be steady for the next couple of days as companies now out of earnings blackout come to the market.

One source said his desk had "one or two more for the week - that's it for now."

Another source was more positive, stating that there were several things upcoming for the week and one or two for Tuesday.

"It's not going to be anything intense, but better than last week," the source said, referring to the erratic issuance and fairly small number of deals that came into the market.

In the secondary market, all three tranches that Thermo Fisher Scientific sold firmed, with the five-year and 10-year notes trading about 4 basis points tighter, traders said.

Honeywell International's notes firmed 1 bp to 2 bps in trading, while National Rural Utilities' firmed about 5 bps.

UnitedHealth Group's were mostly flat in trading, a source said.

Overall investment-grade Trace volume was lower on Monday, down nearly 20% to just under $11 billion, a market source said.

In other data, the Markit CDX Series 14 North American investment-grade index was unchanged with a spread of 80 bps, according to Markit Group Ltd.

Treasury markets were flat on Monday with longer bonds showing slight gains. The 10-year note yield fell 1 bp to 3.62%, while the 30-year bond yield fell 3 bps to 4.67%.

Honeywell sells $1.4 billion

Honeywell International priced $1.4 billion of senior notes (A2/A) in two tranches, an informed source said late in the day.

There was "more than $5.4 billion" on the books for the sale, a source said. He added that there was more interest in the 10-year notes.

The $800 million tranche of 4.25% 10-year notes priced at a spread of Treasuries plus 68 bps. Price guidance was in the 70 bps area, and the notes priced at the tight end of that.

A second tranche of $600 million of 5.375% 30-year bonds sold at a 78 bps over Treasuries spread. These notes also sold at the tight end of talk in the 80 bps area.

Bank of America Merrill Lynch, Barclays Capital Inc. and Citigroup Global Markets Inc. were bookrunners.

Proceeds will be used to repurchase up to $400 million of senior notes due in 2012 and repay outstanding commercial paper as well as for general corporate purposes.

Honeywell's notes due 2021 were slightly tighter in secondary trading, first seen wider at 69 bps bid, 66 bps offered and later tighter at 67 bps bid, 66 bps offered, traders said.

The bonds due 2041 traded at 77 bps bid, 75 bps offered.

Early in the gray markets, the tranches were tighter on the offer side, with the 10-years seen at 67 bps bid, 64 bps offered and the 30-years at 77 bps bid, 74 bps offered, a trader said.

The diversified technology and manufacturing company is based in Morris Township, N.J.

UnitedHealth's two tranches

UnitedHealth Group priced $750 million of senior notes (Baa1/A-) in two parts, a source close to the trade said.

There was about $2.5 billion total on the books, the source said.

A $400 million tranche of 4.7% 10-year notes sold at a spread of Treasuries plus 110 bps. The notes were priced at the tight end of talk in the 110 to 112 bps range.

The second part of the deal was $350 million of 5.95% 30-year bonds priced at a spread of 130 bps over Treasuries. The notes also sold at the tight end of guidance in the 130 bps to 132 bps range.

In the secondary market, the tranche of notes due 2021 traded flat at 110 bps bid, 108 bps offered, a trader said.

No immediate secondary activity was seen on the bonds due 2041.

Bookrunners were Barclays Capital Inc., Deutsche Bank Securities Inc., UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds will be added to the company's general funds and used for general corporate purposes.

The diversified healthcare company is based in Minnetonka, Minn.

Thermo Fisher $2.2 billion

Thermo Fisher Scientific priced $2.2 billion of notes (A3/A/A-) in three tranches, a source away from the deal said.

There was the possibility of pricing $2.3 billion, but the company only went for $2.2 billion, a source said.

The $300 million of 2.05% three-year notes priced at a spread of Treasuries plus 65 bps.

A second tranche of $900 million of 3.2% five-year notes priced at an 85 bps over Treasuries spread.

The third part was $1 billion of 4.5% 10-year notes priced at 95 bps over Treasuries.

Barclays Capital Inc. and J.P. Morgan Securities Inc. were bookrunners.

Proceeds will be used to fund the $2.1 billion acquisition of Dionex Corp. and for general corporate purposes.

In secondary trading, all three tranches were stronger, according to traders.

Soon after trading, bids were seen on all three bonds, one trader said. The notes due 2014 were bid at 63 bps, while the tranche due 2016 were quoted at 83 bps bid. The notes due 2021 had a 93 bps bid.

Nearing market close, the five-year and 10-year tranches continued to firm, a trader on another desk said.

The three-year notes traded at 64 bps bid, 61 bps offered. The five-year notes firmed to 81 bps bid, 80 bps offered and the 10-year notes tightened to 91 bps bid, 90 bps offered.

The science technology company is based in Waltham, Mass.

Viacom's new 10-years

Viacom sold $500 million of 4.5% 10-year senior notes (Baa1/BBB+) at a spread of Treasuries plus 110 bps, an informed source said.

There was about $900 million on the books, the source said.

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used to fund a cash tender offer for up to $500 million of 6.25% senior notes due 2016 and for general corporate purposes, including repayment of borrowings under a revolving credit facility and for other outstanding debt.

The entertainment company is based in New York City.

National Rural five-years

National Rural Utilities Cooperative Finance priced $300 million of 3.05% five-year collateral trust bonds (A1/A+) to yield Treasuries plus 75 bps, according to an FWP filing with the Securities and Exchange Commission.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBS Securities Inc., Scotia Capital (USA) Inc. and U.S. Bancorp Investments were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of short-term debt like commercial paper.

National Rural Utilities notes due 2016 tightened in the secondary market to 74 bps bid, 70 bps offered and later to 71 bps bid, 68 bps offered, traders said.

Late in the day, a trader saw the notes at 70 bps bid, 69 bps offered.

The market lender for electric cooperatives is based in Herndon, Va.

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