BHP, Statoil, Lowe's, AmEx Credit fill market on better tone; Rockwell firms; AmEx widens

By Andrea Heisinger and Cristal Cody

New York, Nov. 16 - After a recovery in tone by the close on Tuesday, issuers once again crowded the high-grade market on Wednesday.

The largest trade of the day totaled $3 billion in three tranches from BHP Billiton Finance (USA) Ltd. The company increased the deal size from $2 billion, and it was its first sale since 2009.

The day's second-largest deal came from Norway's Statoil ASA. The company sold an upsized $1.75 billion of debt in three tranches.

American Express Credit Corp. reopened its issue of 2.8% notes due 2016 to add $1 billion.

There was a $1 billion sale from Lowe's Cos., Inc. that was split evenly between 10- and 30-year tranches.

Rockwell Collins, Inc. sold $250 million of 10-year debt at the tight end of guidance.

There was a sovereign sale from International Finance Corp. The lender to developing countries sold $3 billion of five-year paper.

The day also saw a new issue of $25-par 30-year capital securities announced by Aviva plc.

After a rocky Tuesday - many issuers decided to stand down on negative news from the euro zone - companies instead looked to Wednesday.

"Sentiment was better at the end of yesterday, so people were really watching the market this morning," one source said. "Some of these have been watching for a couple of days or more."

There was a swell of deals to start the week on Monday, followed by two sales on Tuesday and then the mid-week rush. The week has already come close to reaching projected volume of $20 billion to $25 billion.

There "might be something left" for the last two days of the week, although the marquee deals are likely over, a market source said.

Corporate bonds ended weaker overall. The Markit CDX Series 17 North American Investment Grade index eased 2 basis points to a spread of 134 bps.

In the secondary market, Rockwell Collins' notes traded 2 bps tighter, while Lowe's bonds traded flat to tighter on the offer side.

American Express Credit's notes widened 2 bps.

Investment-grade bank and broker credit default swaps costs rose on Wednesday, indicating less investor confidence in the financial sector, a trader said. Bank CDS costs traded 5 bps to 15 bps higher. Brokerage CDS costs were seen 15 bps higher across the board.

Overall trading volume edged up 1.5% to about $12.8 billion on the day.

Treasuries saw late-day gains on the mid to long end of the bond curve. The 10-year note yield fell to 1.97% from 2.02%. The 30-year bond yield dropped 5 bps to 3.01%.

BHP Billiton upsizes

BHP Billiton Finance (USA) sold an upsized $3 billion of senior notes (A1/A+/A+) in three parts, a source close to the trade said.

The deal size was increased from $2 billion.

The $1 billion tranche of 1.125% three-year paper priced at a spread of Treasuries plus 85 bps. They were sold in line with guidance in the 85 bps area.

A second part was $750 million of 1.875% five-year notes sold at Treasuries plus 110 bps. They priced at the tight end of talk in the 115 bps area.

Finally, there was a $1.25 billion tranche of 3.25% 10-year debt priced at a spread of 135 bps over Treasuries. They were sold in line with talk in the 135 bps area.

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

Proceeds are being used for general corporate purposes, including commercial paper repayment.

The deal is guaranteed by BHP Billiton plc and BHP Billiton Ltd., which are based in London and Melbourne, Australia, respectively.

BHP Billiton Finance last priced notes in a $3.25 billion deal in two tranches on May 18, 2009. The 5.5% five-year notes from that trade sold at 400 bps, as did the 6.5% 10-year tranche.

BHP Billiton is a diversified natural resources company.

Statoil's guaranteed deal

Statoil priced an upsized $1.75 billion of notes (Aa2/AA-) in three tranches, a market source said.

The size of the trade was increased from $1.5 billion.

The $650 million of 1.8% five-year paper was priced at a spread of Treasuries plus 95 bps.

A $750 million tranche of 3.15% 10-year notes sold at a spread of 117 bps over Treasuries.

The third part was $350 million of 4.25% 30-year bonds priced at Treasuries plus 125 bps. The bookrunners were Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and JPMorgan.

Proceeds are being used for general corporate purposes.

The notes are guaranteed by Statoil Petroleum ASA.

The oil and gas production company is based in Stavanger, Norway.

AmEx Credit reopens

American Express Credit reopened its issue of 2.8% medium-term notes due 2016 to add $1 billion, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes (A2/BBB+/A+) were priced at a spread of Treasuries plus 190 bps.

Total issuance is $2.3 billion including $1.3 billion sold on Sept. 14 at 192 bps over Treasuries.

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

After pricing, the notes due 2016 traded wider at 192 bps bid, 187 bps offered, according to a source.

The financial services company is based in New York.

Lowe's sells $1 billion

Lowe's sold $1 billion of senior notes (A3/A-) in two tranches, a market source said.

The $500 million of 3.8% 10-year notes priced at a spread of Treasuries plus 180 bps.

The second tranche was $500 million of 5.125% 30-year bonds priced at a spread of 210 bps over Treasuries.

Bank of America Merrill Lynch, JPMorgan and SunTrust Robinson Humphrey Inc. were the bookrunners.

Proceeds are being used for general corporate purposes including a common stock share repurchase, capital expenditures and working capital.

Lowe's last priced debt in a $1 billion sale of five- and 10-year notes on Nov. 17, 2010. The 3.755 10-year notes from that sale were priced at 88 bps over Treasuries.

In the secondary market, the new notes due 2021 traded at 176 bps offered, according to a trader.

The 10-year notes were quoted by another trader at 180 bps bid, 178 bps offered.

The bonds due 2041 were seen by traders at 206 bps offered and later at 204 bps offered.

The home improvement retailer is based in Mooresville, N.C.

Rockwell Collins prices tight

Rockwell Collins sold $250 million of 3.1% 10-year notes (A1/A/A) to yield Treasuries plus 110 bps, according to an informed source and an FWP filing with the SEC.

They priced at the tight end of talk in the range of 110 bps to 115 bps.

Bank of America Merrill Lynch, Citigroup and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repurchase common stock and for other general corporate purposes.

Rockwell Collins' notes due 2021 traded 2 bps tighter at 108 bps bid, 103 bps offered, a trader said.

The communications and aviation electronics company is based in Cedar Rapids, Iowa.

IFC's $3 billion

International Finance sold $3 billion of 1.125% five-year notes (Aaa/AAA) at mid-swaps minus 9 bps, an informed source said.

Citigroup, HSBC Securities (USA) Inc. and JPMorgan were the bookrunners.

The lender to the private sector in developing countries is based in Washington, D.C.

Aviva's preferred sale

The news of the day in the preferred stock market was a new deal from Aviva, a London-based insurance company. The word on the street was the deal was growing from an original issue amount of $200 million.

"The deal looks great," a trader said, likening the paper to Allianz SE's OTCBB-listed 8.375% subordinated callable bonds.

Aviva intends to sell 30-year capital securities, the company said in a regulatory filing.

Price talk is 8.25% to 8.375%, a market source said.

The source also said he had heard the original issue amount for the $25-par bonds was $200 million, but chatter was that the deal was growing.

"It seems like they are trying to grow the deal," he said. "I'm sure they will be able to raise more."

He saw the capital securities at $24.72 bid, $24.75 offered in the grey market.

Another trader said the deal "looks great" and feels a lot like Allianz's $25-par notes.

He quoted the issue at $24.70 bid, $24.80 offered.

Proceeds will be used for general corporate purposes.

"It's a tier 2 kind of capital security," a source said. "It's more like junior subordinated debt than a preferred."

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo are the bookrunners.

Paul Deckelman and Stephanie N. Rotondo contributed to this review

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