AmEx, Capital One, Lloyds, CAT Financial sell as financials reign; Kraft flat on name change

By Andrea Heisinger and Cristal Cody

New York, March 21 - The number of deals in the high-grade market spiked on Wednesday as the tone improved enough for American Express Credit Corp., Capital One Financial Corp., Syngenta Finance NV, Raymond James Financial, Inc., Lloyds TSB Bank plc and Caterpillar Financial Services Corp. to price deals.

Financial names had a corner on the primary for the day as Lloyds TSB Bank and American Express Credit each sold $1.5 billion of five-year notes. Capital One Financial priced $1.25 billion of three-year paper.

Raymond James Financial tapped the market for $250 million of 12-year paper, and Caterpillar priced $600 million of notes in two maturities.

Switzerland's Syngenta sold $750 million of paper in 10- and 30-year maturities.

There were several offerings in the preferred stock market as well. NextEra Energy Capital Holdings Inc. priced $400 million of $25-par 60-year junior subordinated notes.

There was a $100 million sale of $25-par 30-year notes from Maiden Holdings North America Ltd.

Qwest Corp. announced plans to price at least $250 million of $25-par 30-year senior notes.

The primary's tone rebounded after issuers largely shunned the market on Tuesday after credit opened soft.

"It was better today, and a couple of these, I know, were yesterday's business," a market source said.

Some companies opted to stand down on Tuesday on the less-than-optimal tone, waiting for it to perk up again Wednesday.

"The morning felt good," a syndicate source said. "Then things kind of deteriorated throughout the day."

The week was expected to be front-loaded, and supply is set to go down during the last two days of the week.

"Thursday and Friday aren't supposed to be as busy," the syndicate source said. A source at another desk "didn't have anything for sure for tomorrow."

The Markit CDX Series 18 North American Investment Grade index firmed 1 basis point to a spread of 87 bps.

"Everything's in. The spreads seem to be a little bit better," one trader said.

Capital One's notes firmed 5 bps in secondary trading going out.

AmEx Credit's notes traded wrapped around the issue price, while Caterpillar Financial Services' two tranches came in about 1 bp.

Kraft Foods Inc.'s bonds (Baa2/BBB-) traded flat to 2 bps tighter on the announcement the company will be renamed Mondelez International, Inc. when it spins off its North American grocery division later in the year.

Bonds from Agrium Inc., which plans to acquire Viterra Inc.'s retail stores in Canada and Australia and an interest in an Alberta nitrogen facility, were unchanged.

Treasuries rose a second day. The benchmark 10-year note yield fell 7 bps to 2.29% on Wednesday, and the 30-year bond yield fell to 3.38% from 3.44%.

Capital One's $1.25 billion

Capital One Financial sold $1.25 billion of 2.15% three-year senior notes (Baa1/BBB/A-) at a spread of Treasuries plus 160 bps, a source close to the deal said.

The price was whispered in the 160 bps area and went straight to launch pricing in line with that talk, the source said. There was about $2.5 billion of demand on the books.

The bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes including reducing short-term debt, possible acquisitions, investments in or extension of credit to subsidiaries and investment in securities.

Capital One Financial last priced bonds in a $3 billion deal in four tranches on July 14, 2011. A tranche of 2.125% three-year notes from that sale priced at 150 bps over Treasuries.

Capital One's notes due 2015 traded tighter at 157 bps bid, 152 bps offered, a trader said.

The notes continued to tighten, going out at 155 bps bid, 150 bps offered, another trader said.

The bank holding company for Capital One Bank is based in McLean, Va.

AmEx sells five-year

American Express Credit sold $1.5 billion of 2.375% five-year senior notes (A2/BBB+/A+) to yield Treasuries plus 130 bps, an informed source said.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank and RBS Securities Inc. were the bookrunners.

AmEx was last in the market with a $1 billion reopening of 2.8% five-year notes due 2016 on Nov. 16. Those notes priced at 190 bps over Treasuries.

AmEx Credit's notes due 2017 traded at 125 bps offered, a trader said.

Later in the afternoon, a trader at another desk saw the notes flat at 130 bps bid, 127 bps offered.

The financial services company is based in New York.

Lloyds offers $1.5 billion

Lloyds TSB Bank sold $1.5 billion of 4.2% five-year senior notes (Aa3/A+/AA-) to yield Treasuries plus 310 bps, an informed source said.

The deal was sold at the tight end of talk in the 315 bps area, plus or minus 5 bps, the source said.

The books were more than three times oversubscribed at about $5 billion, the source added.

Bank of America Merrill Lynch, Citigroup, Morgan Stanley & Co. LLC and Wells Fargo ran the books.

Proceeds are being used for general corporate purposes.

The deal is guaranteed by Lloyds Banking Group plc.

Lloyds was last in the market with a $2 billion deal of three-year floating-rate notes on Jan. 21, 2011.

The retail bank is based in London and Edinburgh.

Syngenta sells at talk

Syngenta Finance priced $750 million of notes (A2/A/) in two maturities, a source close to the deal said.

The $500 million of 3.125% 10-year notes priced at a spread of Treasuries plus 85 bps.

A $250 million tranche of 4.375% 30-year bonds sold at 100 bps over Treasuries.

Each of the notes priced in line with guidance.

Bank of America Merrill Lynch and Citigroup were the bookrunners.

Proceeds are being used for general corporate purposes outside of Switzerland.

The deal is guaranteed by Syngenta AG.

The agribusiness company is based in Basel, Switzerland.

CAT's two tranches

Caterpillar Financial Services sold $600 million of medium-term notes, series G, (A2/A/A) in two tranches, according to FWP filings with the Securities and Exchange Commission.

The $325 million of 1.05% three-year paper sold at Treasuries plus 50 bps.

A second part was $275 million of 1.75% five-year notes priced at a spread of 65 bps over Treasuries.

The bookrunners were Barclays Capital Inc. and Goldman Sachs & Co.

Caterpillar Financial last sold three-year paper as part of a $600 million deal in two tranches on Dec. 12. The 1.125% three-year notes priced at 85 bps. The company last priced five-year notes in a $250 million reopening of 2.05% notes due 2016 at 100 bps on Sept. 29.

In the secondary market, the notes due 2015 traded at 49 bps bid, 46 bps offered, a trader said.

The notes due 2017 traded at 64 bps bid, 61 bps offered.

The funding arm of heavy equipment maker Caterpillar Inc. is based in Nashville.

Raymond James' 12-years

Raymond James Financial sold $250 million of 5.625% 12-year senior notes (Baa2/BBB/) at a spread of Treasuries plus 337.5 bps, a market source said.

JPMorgan, Citigroup and Raymond James & Associates were the bookrunners.

Proceeds are being used to pay a portion of the purchase price for the acquisition of Morgan Keegan & Co. Inc. and MK Holding, Inc. from Regions Financial Corp.

Raymond James last priced a $250 million deal of senior notes on April 4, 2011 and was in the market with a $350 million sale of $25-par notes on Feb. 29.

The company for is based in St. Petersburg, Fla.

NextEra's $25-par deal

NextEra Energy Capital Holdings, formerly known as FPL Group Capital Inc., sold $400 million of 5.7% $25-par series G junior subordinated debentures due March 1, 2072, according to an FWP filing with the SEC.

Price guidance was around 5.75%, a trader reported. The deal was originally expected to be about $100 million.

NextEra Energy Inc. will guarantee the notes (expected Baa2/BBB/BBB).

NextEra will apply to list the baby bonds on the New York Stock Exchange.

Citigroup, Morgan Stanley, UBS Securities LLC and Wells Fargo are the bookrunners.

The company expects to use proceeds to repay a portion of its total outstanding commercial paper obligations and for other general corporate purposes.

NextEra Energy is based in Juno Beach, Fla.

Maiden prices $100 million

Maiden Holdings North America gave new details about its $100 million sale of 8% 30-year senior notes in an FWP filed with the SEC. The deal priced in line with talk on Tuesday.

Maiden Holdings Ltd. guarantees the $25-par notes.

There is a $15 million over-allotment option.

Maiden will apply to list the notes on the New York Stock Exchange.

Bank of America Merrill Lynch is the bookrunner.

Proceeds will be used for general corporate purposes, which may include repurchasing the company's 14% 30-year trust preferreds or for working capital.

Maiden Holdings is a Hamilton, Bermuda-based reinsurance company. Maiden Holdings North America is based in Mount Laurel, N.J.

Qwest plans 40-years

Qwest is planning a minimum $250 million sale of $25-par 40-year notes, a trader told Prospect News Wednesday.

He said price talk is 7% to 7.125% and the paper (Baa3/BBB-/BBB-) is non-callable for five years.

Bank of America Merrill Lynch, Citigroup, UBS and Wells Fargo are the bookrunners.

Proceeds will be used, together with available cash or additional borrowings available under CenturyLink, Inc.'s revolving credit facility, to repurchase 8.375% notes due 2016 and 7.625% notes due 2015 for a purchase price of up to $500 million through a tender offer, Qwest said in a prospectus filed with the Securities and Exchange Commission.

Qwest is a Monroe, La.-based telecommunications company and a subsidiary of CenturyLink.

Kraft flat

Kraft's 6.125% notes due 2018 traded unchanged at 238 bps bid on Wednesday, a bond source said.

The company's 7% bonds due 2037 firmed 2 bps from Tuesday to 175 bps.

After Kraft spins off its North American grocery business, the company will be renamed Mondelez International. It will be focused on snack products such as Oreo cookies and Cadbury candy.

The company has reserved the stock symbol "MDLZ."

Kraft's North American grocery business, home of the Kraft cheese brand and other food products, will become Kraft Foods Group, Inc.

The food company is based in Northfield, Ill.

Agrium unchanged

Agrium's bonds traded mostly flat on Wednesday, a trader said.

The company's 6.75% senior notes due 2019 traded at 120 bps bid, 110 bps offered.

"No real change in the past few days," the trader said. "Going back to the 16th, they were 120, 110 then."

Agrium (Baa2/BBB/DBRS: BBB) sold the notes in a $500 million offering in 2008 at a spread of 310 bps plus Treasuries.

The agriculture products and service retailer is based in Calgary, Alta.

Stephanie N. Rotondo contributed to this review

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