Royal Bank of Canada, Ford Motor's FUEL Trust sell billion-dollar deals; Wal-Mart bonds mixed

By Sheri Kasprzak and Cristal Cody

New York, April 12 - It was another active day for the primary market, with at least two billion-dollar offerings pricing.

The day's action was led by the Royal Bank of Canada's $1.75 billion offering of notes (Aa1/AA-/AA). The offering included $900 million of three-year floaters and $850 million of five-year fixed-rate notes.

The floaters are due April 17, 2014 and bear interest at Libor plus 30 basis points. The notes are not callable.

The fixed-rate notes are due April 19, 2016 and bear interest at 2.875%. They priced at 99.764 to yield 2.926%. The spread came in at Treasuries plus 73 bps. Those notes are also non-callable.

BNP Paribas, J.P. Morgan Securities LLC and RBC Capital Markets LLC are the joint bookrunners for the sale.

The proceeds will be used for general corporate purposes.

RBC is a Toronto-based investment bank.

Bonds widen

"Volume was pretty light today," a trader said. "Generally, technology is 1 to 3 basis points wider."

Another trader said the bank and financial sector was 2 bps to 5 bps wider "and probably 5 to 10 wider on the Yankee banks."

The series 14 Markit CDX North American Investment Grade index eased 3 bps to a spread of 97 bps, according to Markit Group Ltd.

In secondary trading, the new notes from Ford Motor Co. and Monsanto Co. were stronger, traders said.

The $5 billion of notes (Aa2/AA/AA) that Bentonville, Ark.-based Wal-Mart Stores Inc. sold the previous day were mixed in trading. The 10-year notes widened, and the long bonds traded strongest, a trader said.

Overall investment-grade Trace volume climbed 12% to about $10.5 billion on Tuesday, a market source said.

Treasuries rallied on Tuesday, sending yields down 10 bps on the short end of the curve after Japan raised the nuclear crisis level to seven from level five. The 10-year benchmark note yield fell to 3.49% from 3.58%. The 30-year bond yield fell 7 bps to 4.58%.

Ford trust brings notes

Elsewhere, Ford priced $1.5 billion of exchange-linked notes via the FUEL Trust 2011-1 on Tuesday, said a pricing sheet.

The notes (Baa2/BBB-/) were sold in a private placement via Rule 144A and were upsized from $1 billion.

"We were close to guidance and upsized, so it went really well," said one sellsider connected to the offering. "Demand was excellent."

The 4.207% notes are due April 15, 2016 and are priced at par with a spread of Treasuries plus 200 bps. Preliminary guidance on the notes put the spread at around Treasuries plus 210 bps. The notes are not callable.

Citigroup Global Markets Inc., Merrill Lynch and Goldman Sachs & Co. were the joint bookrunners.

Proceeds will be used for general corporate purposes.

In secondary trading, the notes were quoted tightening to 180 bps bid, 177 bps offered, a trader said.

Monsanto prices $300 million

Also during the session, St. Louis-based agricultural products maker Monsanto brought $300 million of senior notes, said a term sheet.

The 2.75% notes (A2/A+/A+) are due April 15, 2016 and priced at 99.787 to yield 2.796%. The spread came in at Treasuries plus 60 bps. The notes feature a make-whole call at Treasuries plus 10 bps.

The joint bookrunners for the offering were Goldman Sachs, Merrill Lynch, Barclays Capital Inc. and Mitsubishi UFJ Securities (USA) Inc.

Proceeds will be used for general corporate purposes including repaying a note due to Pfizer Inc. related to Monsanto's acquisition of the Chesterfield Village research facility in 2010.

In the secondary market, the notes firmed to 57 bps bid, 55 bps offered, a trader said.

Another trader saw the notes at 56 bps bid and earlier offered at 54 bps.

"Probably tighter now," the trader said.

Another trader saw the notes at 57 bps bid, 55 bps offered.

Georgia Power sparks deal

In other news, Georgia Power Co. came to market with $250 million of series 2011B senior notes, said a term sheet filed with the Securities and Exchange Commission.

The 3% notes (A3/A/A+) are due April 15, 2016. The notes priced at 99.973 to yield 3.006%. The spread for the notes came in at Treasuries plus 80 bps. The notes feature a make-whole call at Treasuries plus 15 bps.

The joint bookrunners for the offering were Barclays Capital, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc.

Proceeds will be used to repay a portion of the company's outstanding short-term debt.

The Atlanta-based company is a subsidiary of Southern Co., an electric utility.

Bank of Nova Scotia prices

Also in the market, the Bank of Nova Scotia priced $150 million in a reopening of 2.375% senior notes due Dec. 17, 2013 (Aa1/AA-) at 101.83, according to a prospectus supplement filed with the SEC.

U.S. Bancorp Investments, Inc. was the bookrunner.

Proceeds will be used for general business purposes.

The notes were previously reopened on Jan. 6 in an add-on of $500 million priced at a spread of 60 bps over Treasuries. The bank originally priced $1 billion in the issue on June 17, 2010 at a spread of 125 bps over Treasuries.

The financial services company is based in Halifax, N.S., and Toronto.

Wal-Mart mixed

Wal-Mart Stores' new debt was mostly stronger in the secondary market, although the 10-year notes widened, a trader said Tuesday.

The 1.625% notes due April 15, 2014 firmed in trading to 37 bps bid, 35 bps offered on Tuesday from where they priced at a spread of Treasuries plus 40 bps, the trader said.

The second tranche of 2.8% notes due April 15, 2016, which priced at a spread of Treasuries plus 57 bps, was flat at 57 bps bid, 55 bps offered.

The 4.25% notes due April 15, 2021 widened to 78 bps bid, 76 bps offered. The notes priced at a spread of Treasuries plus 75 bps.

Wal-Mart's last tranche, 5.625% notes due April 15, 2041, priced at a spread of Treasuries plus 110 bps. The bonds firmed to 105 bps bid, 103 bps offered, the trader said.

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