Citigroup, Mosaic, MetLife price, adding to week's massive supply; bonds widen over afternoon

By Cristal Cody and Aleesia Forni

Virginia Beach, Nov. 7 - Citigroup Inc., Mosaic Co. and MetLife Inc. were among the issuers to continue the high-grade primary market frenzy on Thursday.

Though down from Wednesday, supply still reached a respectable $5.15 billion during the session.

The largest deal of the day came from Mosaic, which priced $2 billion of senior notes in three parts.

All three tranches priced at the tight end of talk.

There was $900 million of 4.25% 10-year senior notes sold at Treasuries plus 168 basis points. The company also priced $500 million of 5.45% 20-year notes at Treasuries plus 173 bps and $600 million of 5.625% 30-year bonds at 188 bps over Treasuries.

Citigroup priced $1.3 billion of senior notes in two parts during the session.

A $500 million tranche of three-year floaters sold at par to yield Libor plus 68 bps, while an $800 million tranche of 1.3% notes due 2016 priced at Treasuries plus 80 bps.

Also on Thursday, MetLife priced $1 billion of 4.875% 30-year senior notes at Treasuries plus 115 bps.

Delmarva Power & Light Co. brought $300 million of 3.5% first mortgage bonds due 2023 to Thursday's primary, pricing the issue with a spread of Treasuries plus 90 bps.

In other primary action, Ameriprise Financial Inc. sold a $150 million add-on to its 4% senior notes due Oct. 15, 2023 at Treasuries plus 115 bps.

Also on Thursday, American Water Capital Corp. launched a $400 million offering of senior notes due 2024 at Treasuries plus 115 bps. A source said late Thursday that the deal "may price [Friday]."

Supply reached a massive $32 billion for the week, exceeding expectations of $20 billion to $25 billion of new paper.

Friday's primary is expected to experience "a bit of a breather" to close the busy week, a market source said.

Spreads widened in the investment-grade market late Thursday after bonds opened the day tighter, according to traders.

"Definitely weaker," one trader said. "Going out the door, it's much weaker, anywhere from 4 to 7 basis points."

The Markit CDX North American Investment Grade series 21 index eased 1 bp to a spread of 74 bps.

New issuance was mixed in secondary trading, traders report.

Mosaic's three tranches of notes tightened 5 bps in late trading.

MetLife's 4.875% senior notes due 2043 firmed 1 bp in the secondary market, according to traders.

Ameriprise Financial's 4% senior notes due 2023 tightened 2 bps.

Both Citigroup's 1.3% notes due 2016 and Delmarva's offering of 3.5% notes due 2023 traded wrapped around issuance, traders said.

Traders saw American Capital's notes at 114 bps bid, 113 bps offered and later at 110 bps bid.

Mosaic three-parter

Mosaic hit Thursday's primary with a three-part $2 billion deal, according to a syndicate source.

All three tranches were sold at the tight end of talk.

The company priced $900 million of 4.25% notes due 2023 at Treasuries plus 168 bps.

A $500 million tranche of 5.45% notes due 2033 was sold at Treasuries plus 173 bps.

Finally, $600 million of 5.625% 30-year bonds priced at 188 bps over Treasuries.

Mosaic's 4.25% notes due 2023 tightened in secondary trading to 163 bps bid, 160 bps offered, a trader said.

The tranche of 5.45% notes due 2033 firmed to 168 bps bid, 164 bps offered.

The 5.625% bonds due 2043 were quoted better at 183 bps bid, 180 bps offered.

Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., Santander Investment Securities Inc. and U.S. Bancorp Investments Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The company last came to market on Oct. 17, 2011 to price a $750 million two-part offering of senior notes due 2021 and 2041.

The maker of agricultural chemicals is based in Plymouth, Minn.

Citi prices tight

Also on Thursday, Citigroup came to the primary market to price a $1.3 billion issue of senior notes (Baa2/A-/A) in two tranches, according to an informed source.

The company priced $500 million of three-year floaters at par to yield Libor plus 68 bps.

There was also $800 million of 1.3% notes due 2016 priced at 99.9 to yield 1.334%, or Treasuries plus 80 bps.

The notes were talked in the mid-90 bps area.

Citigroup's 1.3% notes due 2016 traded wrapped around issuance at 80 bps bid, 77 bps offered, a trader said.

Citigroup was last in the high-grade primary market with a $500 million issue of 4.95% senior notes priced with a spread of Treasuries plus 130 bps on Oct. 31.

The financial services company is based in New York.

MetLife sells $1 billion

MetLife brought $1 billion of 4.875% senior notes due Nov. 13, 2043 to market on Thursday with a spread of Treasuries plus 115 bps, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The notes priced at the tight end of talk.

MetLife sold the notes (A3/A-/A-) at 99.376 to yield 4.915%.

MetLife's 4.875% senior notes due 2043 traded in the range of 114 bps bid, 113 bps offered to 117 bps bid, 116 bps offered late in the day, according to traders.

The company plans to use proceeds from the sale for general corporate purposes, which may include the repayment of $1 billion of its 2.375% notes due Feb. 6, 2014 and $350 million of its 5.5% notes due June 15, 2014.

Barclays, Goldman Sachs, UBS Investment Bank and Wells Fargo were the joint bookrunners.

The insurance and employee benefits company is based in New York.

Delmarva mortgage bonds

Meanwhile, Delmarva Power & Light priced $300 million of 3.5% first mortgage bonds due 2023 with a spread of Treasuries plus 90 bps, according to a syndicate source and an FWP filing with the SEC.

The notes (A3/A/A) sold at the tight end of guidance.

Pricing was at 99.958 to yield 3.505%.

Delmarva's 3.5% notes due 2023 traded flat at 90 bps bid, 87 bps offered, according to a trader.

Citigroup Global Markets Inc., RBS Securities Inc. and Wells Fargo were the joint bookrunners.

BNY Mellon Capital Markets LLC and PNC Capital Markets LLC were the co-managers.

Proceeds will be used to repay $250 million of the company's 6.4% first mortgage bonds due Dec. 1, 2013. Remaining proceeds will be used for general corporate purposes.

Delmarva, an electric and natural gas utility based in Wilmington, Del., was last in the market with a $250 million sale of 30-year mortgage bonds on June 19, 2012.

Ameriprise add-on

Ameriprise Financial priced a $150 million tap of its existing 4% senior notes due Oct. 15, 2023 with a spread of Treasuries plus 115 bps, according to an FWP filed with the SEC.

The notes (A3/A/) priced at 101.955 to yield 3.761%.

The notes headed out 2 bps better at 113 bps bid, 112 bps offered in the secondary market, a trader said.

Credit Suisse Securities (USA) LLC, Goldman Sachs, JPMorgan and Wells Fargo were the joint bookrunners.

The original $600 million issue priced with a spread of Treasuries plus 120 bps on Sept. 3.

The proceeds will be used for general corporate purposes.

The financial planning and services company is based in Minneapolis.

American Water launches

Thursday also saw American Water Capital launch a $400 million offering of senior notes due March 1, 2024 (Baa2/BBB+/), according to a market source.

The notes were talked in the area of Treasuries plus 115 bps.

The bookrunners were JPMorgan, UBS and Wells Fargo.

Santander, Mitsubishi UFJ Securities, Williams Capital Group LP, Blaylock Robert Van LLC, C.L. King & Associates, Loop Capital Markets LLC, MFR Securities Inc. and Mischler Financial Group Inc. were the co-managers.

Proceeds will be used to finance redemptions of some long-term debt and to fund repayment of short-term debt.

The investor-owned water and wastewater utility company is based in Voorhees, N.J.

CDS costs unchanged to wider

Investment-grade bank and brokerage credit default swap prices were unchanged to wider, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 100 bps bid, 104 bps offered. Citigroup's CDS costs eased 2 bps to 94 bps bid, 98 bps offered. JPMorgan Chase & Co.'s CDS costs were flat at 85 bps bid, 88 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 55 bps bid, 59 bps offered.

Merrill Lynch's CDS costs widened 2 bps to 100 bps bid, 105 bps offered. Morgan Stanley's CDS costs eased 1 bp to 112 bps bid, 116 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 1 bp to 116 bps bid, 119 bps offered.

Paul Deckelman contributed to this review

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