BHP Billiton prices multi-tranche monster; Ryder, Cargill among issuers; Methanex firms

By Andrea Heisinger and Cristal Cody

New York, Feb. 21 - A huge deal from BHP Billiton Finance (USA) Ltd. led the short week on Tuesday as other smaller sales also were priced.

BHP Billiton's offering totaled $5.25 billion in five parts. It includes tranches of two-year floating-rate notes, along with fixed-rate maturities of three, five, 10 and 30 years.

Cargill Inc. priced $1 billion of bonds with five- and 10-year maturities, while American Honda Finance Corp. sold $1.75 billion of paper in three- and-five-year tranches.

Also in the market were Ryder System, Inc. and Canada's Methanex Corp.

Ryder priced $350 million of 2.5% five-year notes at a level far below guidance. The deal was also well oversubscribed.

Split-rated Methanex sold $250 million of 10-year notes.

All of these deals follow news over the long Presidents' Day holiday weekend that Greece had come to an agreement over austerity measures and a bailout package was approved by finance ministers in the euro zone.

Despite the good news, it wasn't unexpected, and the market tone didn't get a noteworthy boost because of it.

"There wasn't anything too significant, a little flat today," a syndicate source said.

All of the deals saw low rates and investors flocking to them, which showed in the sales being oversubscribed.

The flow is set to continue on Wednesday, although it's unlikely there will be anything the size of BHP Billiton, a market source said.

"We'll have a few people looking, but they're not going to decide until the morning," the source said.

Methanex' notes attracted interest and traded about 25 basis points tighter in the secondary market, a trader said.

BHP Billiton Finance's fixed-rate tranches traded about 2 bps to 5 bps tighter.

Ryder System's notes firmed 4 bps going out.

Secondary activity seemed slower on the day, a trader said.

"Been really quiet coming off the long weekend."

The Markit CDX Series 17 North American high-grade index firmed 1 bp to a spread of 98 bps on Tuesday from Friday's session.

Bank and financial paper traded unchanged to 5 basis points better, a trader said.

Investment-grade bank and brokerage credit default swaps costs were both unchanged to 5 bps lower, a trader said.

Bonds in the telecom sector firmed 3 bps to 5 bps, according to another trader.

AT&T Inc.'s notes traded about 3 bps tighter.

Treasuries saw losses over the day, and yields jumped 6 bps to 7 bps on the long end of the curve. The benchmark 10-year Treasury note yield rose 6 bps to 2.06%. The 30-year bond yield climbed to 3.21% from 3.14%.

BHP's massive deal

BHP Billiton Finance sold $5.25 billion of senior notes (A1/A+/A+) in five parts, a source away from the trade said.

A source said there was roughly $11 billion on the books for the sale.

The $1 billion of two-year floating-rate notes priced at par to yield Libor plus 27 bps. The paper was sold at the tight end of guidance in the Libor plus 30 bps area.

A $1 billion tranche of 1% three-year paper sold at a spread of Treasuries plus 62 bps. The notes sold at the low end of talk in the 65 bps area.

There was a $1.25 billion tranche of 1.625% five-year notes priced at 77 bps over Treasuries. The notes were priced at the tight end of guidance in the 80 bps area.

The $1 billion of 2.875% 10-year notes priced at Treasuries plus 92 bps. The debt was sold at the low end of talk in the 95 bps area.

Finally, there was a $1 billion tranche of 4.125% 30-year bonds sold at a spread of 102 bps over Treasuries. The paper priced at the tight end of guidance in the 105 bps area.

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

Proceeds are being used for general corporate purposes, including repayment of commercial paper along with repayment of $625 million of global bonds due March 29 and €1.25 billion of medium-term notes due April 4.

The notes are guaranteed by BHP Billiton Plc and BHP Billiton Ltd.

BHP Billiton was last in the market with a $3 billion trade on Nov. 16, 2011. The 1.125% three-year notes from that sale priced at 85 bps over Treasuries, a 1.875% five-year note sold at 110 bps over Treasuries and a 3.25% 10-year tranche sold at 135 bps over Treasuries.

In the secondary market, the tranche of notes due 2015 traded tighter at 57 bps bid, 52 bps offered.

The notes due 2017 traded in to 73 bps bid, 68 bps offered.

The notes due 2022 were quoted 2 bps better at 90 bps bid, 85 bps offered. The 30-year bonds traded better at 99 bps bid, 94 bps offered.

The diversified natural resources company is based in Melbourne, Australia.

American Honda notes

American Honda Finance sold $1.75 billion of notes (A1/A+/A) in two tranches, a market source away from the deal said.

A $1 billion tranche of 1.45% three-year notes priced at a spread of Treasuries plus 103 bps. The paper priced at the low end of guidance in the 105 bps area.

There was also a $750 million tranche of 2.125% five-year notes sold at a spread of 123 bps over Treasuries. The tranche also sold at the low end of talk in the 125 bps area.

The deal was priced under Rule 144A and Regulation S with roughly $4.25 billion on the books, a source said.

Bookrunners were Barclays Capital Inc., J.P. Morgan Securities LLC and RBS Securities Inc.

The U.S. financing arm of Honda Financial Services is based in Torrance, Calif.

Cargill does private deal

Cargill sold $1 billion of notes (A2/A/A) in five- and 10-year tranches, an informed source said. There was between $1.7 billion and $1.75 billion on the books for the trade, the source added, slightly skewed toward the five-year notes.

A $650 million tranche of 1.9% five-year paper sold at a spread of Treasuries plus 105 bps. The tranche sold at the tight end of guidance in the 110 bps area, plus or minus 5 bps.

There was also a $350 million tranche of 3.3%10-year notes priced at 130 bps over Treasuries. The notes sold at the low end of talk in the 135 bps area, plus or minus 5 bps.

Bookrunners were BNP Paribas Securities Corp., Bank of America Merrill Lynch, Barclays Capital Inc. and Citigroup Global Markets Inc.

Proceeds are being used for general corporate purposes including debt repayment.

The deal was done under Rule 144A and Regulation S.

The privately held grain and agricultural products company is based in Minnetonka, Minn.

Ryder's five-years

Ryder System sold $350 million of 2.5% five-year medium-term notes (Baa1/BBB+/A-) to yield Treasuries plus 162 bps, a market source said.

The paper sold tighter than talk in the 185 bps area, the source said. He added that there was about $1.8 billion of demand for the debt, making the deal roughly five times oversubscribed.

Bookrunners were BNP Paribas Securities Corp., Bank of America Merrill Lynch, Mizuho Securities USA Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

Ryder's notes due 2017 traded better at 158 bps bid, 154 bps offered.

The transportation and logistics company is based in Miami.

Methanex's crossover trade

Methanex priced $250 million of 5.25% 10-year senior notes (Ba1/BBB-/) to yield 325 bps over Treasuries, according to an FWP with the Securities and Exchange Commission.

The deal was priced tighter than guidance in the 337.5 bps area.

There was some appeal on both the high-grade and junk sides of the books for the trade, a high-yield trader said. The trader quoted it at about 101.5 in the secondary after the notes priced at 99.61, and the source added that there were some junk guys playing in it.

BNP Paribas Securities Corp. and RBS Securities Inc. were bookrunners.

Proceeds are being used for debt repayment, working capital and general corporate purposes.

Methanex's deal was seen at 101.5 bid versus the 99.615 issue price in the secondary market, a trader said.

Asked if there were any junk investors playing the deal, he said: "Absolutely. Some guys were trading it on spread, some in dollars, so you definitely had the crossover audience involved, no question."

Another trader saw the notes better at 300 bps bid, 295 bps offered.

The worldwide supplier of methanol is based in Vancouver, B.C.

AT&T firms

AT&T's 3% global notes due 2022 firmed about 3 bps on Tuesday to 104 bps bid, 101 bps offered, a trader said.

AT&T sold the notes (A2/A-/A) on Feb. 8 at Treasuries plus 105 bps.

The communications company is based in Dallas.

Paul Deckelman contributed to this review

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