Icahn prices add-on; coming week to see $10 billion of paper; Goldman trades 35 bps better

By Andrea Heisinger and Cristal Cody

New York, Jan. 27 - Icahn Enterprises LP priced a crossover add-on on Friday, but the high-grade bond market was otherwise quiet.

Icahn priced its upsized $200 million add-on to notes due 2018 under Rule 144A and Regulation S. The deal size was doubled, and the notes priced in line with talk.

Terms were given for an $800 million issue of collateral trust bonds priced in two parts by National Rural Utilities Cooperative Finance Corp. on Thursday.

Issuance for the week turned out to be in line with expectations of between $5 billion and $10 billion, sources said. About $9.4 billion of new bonds priced off high-grade syndicate desks during the week, according to Prospect News data.

The coming week should see slightly more issuance.

"We're thinking $10 billion for the week," a source said. "It's not supposed to be frontloaded."

The source added that "this week was a lot lighter than we were thinking" and that the coming week's deals are expected to be distributed evenly and not all priced on Monday and Tuesday.

"More companies are coming out of earnings, so that should help," the source said.

A syndicate source also said there is slightly more issuance coming up to end January and start February.

"It's more mid-week than all at the top," the syndicate source said. "Nothing too crazy, though. February is expected to be the crazy month. A lot of companies are still in [earnings] blackout."

Many of the past week's deals were oversubscribed, showing there is demand for high-grade paper, the syndicate source said.

Bank, telecom paper firms

The Markit CDX Series 17 North American Investment Grade index ended 1 basis point tighter at a spread of 100 bps on Friday.

Bank and financial paper firmed about 5 bps on the day and traded as much as 50 bps to 60 bps better on the week, a trader said.

"Been a very positive week," the trader said. "Every day, especially in financials, it was another 15 tighter."

Goldman Sachs Group Inc.'s 3.625% notes due 2016 (A1/A/A+) traded 35 bps tighter on the week, going out at 295 bps bid, 280 bps offered. The notes were quoted trading on Monday at 330 bps bid, 340 bps offered.

The notes priced at a spread of 156 bps over Treasuries in a $1.25 billion offering on April 28, 2011.

Bonds in the telecom sector traded 5 bps to 20 bps tighter on the week.

"Leading the charge would be DirecTV," a trader said.

DirecTV Holdings LLC and DirecTV Financing Co., Inc.'s 5% notes due 2021 traded 20 bps better on the week.

The new issues from National Rural Utilities and Icahn both traded better on Friday.

Harley-Davidson Financial Services Inc.'s notes sold on Thursday firmed 5 bps on Friday.

Activity was light, but there was "still a very positive tone to the market," a trader said.

Overall trading volume fell to about $12 billion from $17 billion on Thursday.

Treasuries rallied again on Friday, buoyed by the Federal Reserve's announcement earlier in the week that it will keep rates low through 2014. The 10-year Treasury note yield fell to 1.89% from 1.93%. The 30-year bond yield dropped 3 basis points to 3.06%.

Icahn's crossover

Icahn Enterprises priced an upsized $200 million add-on to its 8% notes due in 2018, an informed source said.

The deal size was doubled from a talked $100 million.

The notes (Ba3/BBB-) were sold at 103.5 with a spread of Treasuries plus 626.3 bps. The paper was priced in line with talk of 103.5.

Total issuance is $2.15 billion. This includes a previous $500 million add-on done on Jan. 6 with the same Cusip as Friday's tap.

Jefferies & Co. was the bookrunner.

The deal was done under Rule 144A and Regulation S and is guaranteed by Icahn Enterprises Holdings LP.

Proceeds are being used for general corporate purposes.

Icahn's notes rose to 104.75 by late afternoon, a trader said.

The holding company for a variety of subsidiaries is based in New York.

National Rural gives terms

National Rural Utilities Cooperative Finance gave the terms of its $800 million of collateral trust bonds (A1/A+) sold in two parts on Thursday.

The $400 million of 1% three-year paper sold at a spread of Treasuries plus 80 bps, according to FWP filings with the Securities and Exchange Commission.

A second tranche of $400 million of 3.05% 10-year notes priced at 115 bps over Treasuries.

The active bookrunners were KeyBanc Capital Markets Inc., Mitsubishi UFJ Securities (USA) Inc., RBC Capital Markets LLC and RBS Securities Inc.

Proceeds will be used for general corporate purposes including to repay short-term debt and, along with cash on hand and other funding, to fund the repayment of outstanding 7.25% medium-term notes due on March 1.

National Rural last sold notes in a $175 million offering of one-year floating-rate notes on Dec. 7.

In the secondary market, the 3.05% notes due 2022 traded tighter at 111 bps bid, 106 bps offered, a trader said.

The tranche of notes due 2015 was not seen in trading.

The market lender for electric cooperatives is based in Herndon, Va.

Harley-Davidson firms

Harley-Davidson Financial's 2.7% medium-term notes due 2017 firmed to 190 bps bid, 185 bps offered in the secondary market on Friday, a trader said.

The company sold $400 million of the five-year medium-term notes (Baa1/BBB/BBB+) at Treasuries plus 195 bps.

The financing arm of Harley-Davidson is based in Milwaukee.

DirecTV tightens

DirecTV's 5% notes due 2021 firmed 20 bps to 187 bps bid, 177 bps offered, a trader said.

The company sold the notes (Baa2/BBB/BBB-) at 155 bps over Treasuries on March 7, 2011.

The satellite TV company is based in El Segundo, Calif.

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