Westpac, Honeywell, Capital One price deals in packed primary; new issues mixed in late trade

By Cristal Cody and Aleesia Forni

Virginia Beach, Nov. 18 - The high-grade bond market was packed during Monday's session, as issuers including Westpac Banking Corp., Honeywell International Inc. and Capital One Finance Corp. hit the primary.

The session saw Westpac Banking price a $1.75 billion two-part offering of fixed- and floating-rate notes due 2016.

There was $1.25 billion of three-year floaters and $500 million of 1.05% notes due 2016 sold at Treasuries plus 52 bps.

Meanwhile, Honeywell International sold $1 billion of senior notes in fixed- and floating-rate tranches on Monday.

The sale included $300 million of 3.35% senior notes due 2023 and $700 million of floating-rate senior notes due 2015.

Capital One brought $1 billion of notes in two tranches on Monday, a market source said.

There was $400 million of 1.15% notes due 2016 sold at Treasuries plus 60 bps and $600 million of 2.15% notes due 2018 sold at Treasuries plus 85 bps.

Bank of America also hit the primary on Monday, selling $500 million of 1.35% senior notes due 2016 at Treasuries plus 80 bps.

The session also saw Norfolk Southern Corp. price $400 million of 3.85% notes due 2024 at Treasuries plus 118 basis points, according to an informed source.

In another new deal, TRW Automotive Inc. sold a $400 million issue of 4.45% senior notes due 2023 at 180 bps over Treasuries.

DTE Energy Co. came to market pricing $300 million of 3.85% senior notes due 2023 on Monday at Treasuries plus 120 bps.

The session also saw Tanger Properties LP and ProAssurance Corp. price $250 million new issues respectively.

Tanger hit the market with $250 million of 3.875% 10-year senior notes at140 bps over Treasuries, and ProAssurance priced its $250 million issue of 5.3% 10-year notes at Treasuries plus 262.5 bps.

Activity in the high-grade primary market is not expected to slow down for the remainder of the week, which will be the last full week before the Thanksgiving holiday.

"I would expect most of the deals to get done early during the week, but I do think it's going to be busy," one market source said.

New issues were mixed in the secondary market late afternoon, according to informed sources.

Norfolk Southern's 3.85% notes due 2024 eased 1 basis point on the bid side, while Fifth Third's 4.3% subordinated notes due 2024 traded about 3 bps weaker, a trader said.

ProAssurance's 5.3% notes due 2023 tightened more than 10 bps in secondary trading as the session closed, a trader said.

In other new issue trading, Tanger Properties' 3.875% notes due 2023 firmed 5 bps on the offered side.

The new 3.85% notes due 2023 from DTE Energy headed out wrapped around issuance, according to a trader.

Capital One's two tranches traded flat on the bid side, a trader said.

Westpac two-parter

Westpac Banking was in the market on Monday with a $1.75 billion two-part offering of fixed- and floating-rate notes due 2016, according to an informed source.

The sale included $1.25 billion of three-year notes priced at par to yield Libor plus 43 bps.

There was also $500 million of 1.05% notes due 2016 priced with a spread of Treasuries plus 52 bps, or 99.938 to yield 1.071%.

The bookrunners are Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBC Capital Markets LLC.

Proceeds will be used for general corporate purposes.

Westpac was last in the market with a $1.4 billion sale of five-year senior notes priced in two tranches on July 24.

There was $650 million of floating-rate notes priced at par to yield Libor plus 74 basis points and $750 million of 2.25% notes priced at Treasuries plus 93 bps.

Honeywell sells $1 billion

Also on Monday, Honeywell priced a $1 billion two-part issue of senior notes in fixed- and floating-rate tranches on Monday, according to an informed source.

The company's sale included $300 million of 3.35% senior notes due 2023 sold with a spread of Treasuries plus 75 bps, or 99.384 to yield 3.423%.

A $700 million tranche of floating-rate senior notes due 2015 was priced at par to yield Libor plus 5 bps.

The joint bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBS Securities Inc.

Proceeds will be used for general corporate purposes.

Honeywell is a technology and manufacturing company based in Morristown, N.J.

Capital One brings $1 billion

Capital One tapped the market for $1 billion of notes (A3/BBB+/A-) in two maturities on Monday, a market source said.

A $400 million tranche of 1.15% notes due 2016 was priced with a spread of Treasuries plus 60 bps.

Pricing was at 99.997 to yield 1.151%.

Capital One's 1.15% notes due 2016 traded flat at 60 bps bid, 56 bps offered in the secondary market, a trader said. The tranche of 2.15% notes due 2018 were seen wrapped around issuance at 85 bps bid, 80 bps offered.

There was also $600 million of 2.15% notes due 2018 priced with a spread of Treasuries plus 85 bps, or 99.943 to yield 2.162%.

Bookrunners were Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

The financial services company is based in McLean, Va.

XLIT new issue

Meanwhile on Monday, XLIT priced a $600 million two-part offering of guaranteed senior notes on Monday, according to a company release.

The sale included $300 million of 2.3% senior notes due 2018 and $300 million of 5.25% senior notes due 2043.

Full terms were not available at press time.

Joint bookrunners were Barclays, J.P. Morgan Securities LLC and Deutsche Bank Securities Inc.

The notes will be guaranteed by XL Group plc.

XL Group provides insurance and reinsurance coverage. Its corporate headquarters are in Dublin, and its executive offices are in Hamilton, Bermuda.

BofA prices tight

Bank of America came to Monday's primary market to sell $500 million of 1.35% senior notes due Nov. 21, 2016 with a spread of Treasuries plus 80 basis points, according to an informed source.

Pricing was at 99.974 to yield 1.359%.

The notes priced tight of talk.

BofA Merrill Lynch was the bookrunner.

The financial services company is based in Charlotte, N.C.

TRW sells crossovers

In other primary action, TRW Automotive (Ba2/BBB-/) priced $400 million of 4.45% senior notes due 2023 at 99.774 to yield Treasuries plus 180 bps, according to a market source and a company press release.

The notes priced in a Rule 144A and Regulation S transaction.

Full details were not available at press time.

Proceeds will be used for general corporate purposes, including the retirement of the company's senior notes due March 2014.

TRW Automotive is a Livonia, Mich.-based supplier of automotive systems, modules and

Norfolk Southern prices

Norfolk Southern (Baa1/BBB+/) brought a $400 million issue of 3.85% senior notes due 2024 to market on Monday with a spread of Treasuries plus 118 bps, according to an informed source.

Pricing was at 99.943 to yield 3.856%.

The notes sold at the tight end of talk.

Norfolk Southern's 3.85% notes due 2024 edged 1 bp wider to 119 bps bid, 117 bps offered in secondary trading late afternoon, according to a trader.

Citigroup Global Markets Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC were the joint bookrunners.

The company plans to use the proceeds for general corporate purposes.

The Norfolk, Va.-based railroad operator was last in the high-grade primary market on Aug. 8 with $500 million of 4.8% senior notes due 2043 at Treasuries plus 120 bps.

DTE hits market

DTE Energy came to market with a $300 million issue of 3.85% senior notes, series F, due Dec. 1, 2023 on Monday with a spread of Treasuries plus 120 basis points, according to a company release.

In the secondary market, DTE Energy's 3.85% notes due 2023 traded flat at 120 bps bid, 118 bps offered, a trader said.

Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc. and RBS Securities Inc. were the joint bookrunners.

The co-managers were BNY Mellon Capital Markets LLC, Wells Fargo Securities LLC, Fifth Third Inc., Drexel Hamilton and Loop Capital Markets.

DTE is a Detroit-based utility involved in the development and management of energy-related businesses and services nationwide.

Tanger sells $250 million

Also on Monday, Tanger Properties priced $250 million of 3.875% senior notes Baa1/BBB+/) due 2023 with a spread of Treasuries plus 140 basis points, according to a FWP with the Securities and Exchange Commission.

Pricing was at 98.360 to yield 4.076%.

Tanger Properties' 3.875% notes due 2023 were seen offered late in the day at 135 bps offered in aftermarket trading, a source said.

Bookrunners were BofA Merrill Lynch, Jefferies & Co., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC.

The company plans to use the net proceeds from the offering to repay outstanding borrowings under its unsecured lines of credit. Remaining proceeds will be used for general corporate purposes.

The outlet center real estate investment trust is based in Greensboro, N.C.

ProAssurance new deal

ProAssurance priced $250 million of 5.3% senior notes (Baa2/BBB+/) due Nov. 15, 2023 at par to yield Treasuries plus 262.5 basis points, according to an FWP filed with the SEC on Monday.

In the secondary market, ProAssurance's 5.3% notes due 2023 tightened to 250 bps bid, 245 bps offered, a trader said.

The joint bookrunners were Goldman Sachs & Co., Wells Fargo Securities LLC and U.S. Bancorp Investments Inc.

Proceeds will be used for general corporate purposes.

ProAssurance is a holding company for property and casualty insurance companies focused on professional liability insurance. It is based in Birmingham, Ala.

Bank/brokerage CDS costs

Investment-grade bank and brokerage CDS prices were mostly unchanged on Monday, according to a market source.

Bank of America's CDS costs ended flat at 91 bps bid, 95 bps offered. Citigroup Inc.'s CDS costs were unchanged on the day at 87 bps bid, 92 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 81 bps bid, 86 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 49 bps bid, 53 bps offered.

Merrill Lynch's CDS costs closed unchanged at 90 bps bid, 95 bps offered. Morgan Stanley's CDS costs ended flat at 104 bps bid, 108 bps offered. Goldman Sachs Group, Inc.'s CDS costs were flat at 108 bps bid, 112 bps offered.

Paul Deckelman contributed to this review

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