Santander UK, Citigroup, Export Development Canada price; Diamond Offshore Drilling notes firm

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 31 - Issuers continued to pile into the primary market on Thursday, as new deals from Citigroup Inc., Santander UK plc and Diamond Offshore Drilling were priced during the session.

The day's largest issue came from Santander UK, with the company bringing a new $1.5 billion issue of 5% 10-year notes priced at Treasuries plus 250 basis points.

Meanwhile, Diamond Offshore Drilling sold $1 billion of notes in two parts.

The company priced $250 million of 3.45% 10-year senior notes due 2023 at 95 bps over Treasuries and $750 million of 4.875% 30-year notes at Treasuries plus 120 bps.

Export Development Canada also came to the primary during the session, selling $1 billion of 0.625% three-year notes with a spread of Treasuries plus 12.1 bps.

The session also saw a crossover deal from Seagate HDD Cayman.

The company sold an upsized $800 million issue of five-year senior notes at par to yield 3¾%.

There was also a $500 million new issue from Citigroup. The 4.95% senior notes due 2043 sold with a spread of Treasuries plus 130 bps.

Inter-American Development Bank sold a $100 million tap of its 1.75% notes due Aug. 24, 2018 at 101.562.

With no new deals expected for Friday, the week's total is predicted to end at $22 billion.

The week's new issuance has already exceeded last week's estimates of a $15 billion to $20 billion week.

Investment-grade bonds traded flat to moderately better in quiet activity on Thursday, market sources said.

The Markit CDX North American Investment Grade series 21 index was unchanged on the day at a spread of 73 bps.

Diamond Offshore Drilling's two tranches of senior notes tightened in secondary trading, with the 10-year tranche about 7 bps better, a trader said.

Santander prices tight

Santander UK priced a $1.5 billion issue of 5% 10-year subordinated notes on Thursday with a spread of Treasuries plus 250 bps, according to a market source.

The notes priced tight of talk.

Pricing was at 99.68 to yield 5.041%.

Barclays, BofA Merrill Lynch, Deutsche Bank Securities Inc. and Santander were the joint bookrunners.

The financial services company is based in London.

Diamond Offshore two-parter

The session also saw Diamond Offshore Drilling price $1 billion of senior notes in two tranches, according to a market source and an FWP filing with the Securities and Exchange Commission.

The deal included $250 million of 3.45% senior notes due 2023 sold with a spread of 95 bps over Treasuries.

Pricing was at 99.59 to yield 3.499%.

There was also $750 million of 4.875% 30-year notes priced at Treasuries plus 120 bps, or 99.844, to yield 4.885%.

Diamond Offshore Drilling's 3.45% notes due 2023 firmed to 88 bps bid, 87 bps offered in the secondary market late afternoon, a trader said.

The 4.875% notes due 2043 tightened to 115 bps bid, 114 bps offered.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and SunTrust Robinson Humphrey Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes, including the redemption, repurchase or retirement of the company's 5.15% senior notes due Sept. 1, 2014 and 4.875% senior notes due July 1, 2015.

The offshore oil and gas drilling contractor is based in Houston.

EDC sells $1 billion

Export Development Canada sold $1 billion of 0.625% notes due Dec. 15, 2016 with a spread of mid-swaps minus 4 bps, or Treasuries plus 12.1 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.776 to yield 0.698%.

Proceeds will be used for general corporate purposes.

Goldman Sachs & Co., HSBC, Mizuho Securities and RBC Capital Markets LLC were the joint bookrunners.

The government-backed agency for exporters is based in Ottawa.

Seagate upsizes

Seagate HDD Cayman launched and priced an upsized $800 million issue of split-rated, non-callable five-year senior notes (Ba1/BBB-/BBB-) at par to yield 3¾% on Thursday, according to a syndicate source.

The deal was upsized from $500 million.

The yield printed at the tight end of yield talk set in the 3 7/8% area.

Morgan Stanley & Co. was the sole bookrunner.

The Dublin-based hard drive maker plans to use the proceeds for general corporate purposes, which may include, but are not limited to, debt repayment, capital expenditures and other investments in its business.

Citi sells 30-years

In other primary action, Citigroup priced $500 million of 4.95% senior notes (Baa2/A-/A) due Nov. 7, 2043 with a spread of Treasuries plus 130 bps, according to a market source.

Pricing was at 99.721 to yield 4.968%.

Citigroup Global Markets was the bookrunner.

The financial services company is based in New York.

IADB add-on

There was also a $100 million add-on from Inter-American Development Bank.

The company sold the tap of its 1.75% existing notes due Aug. 24, 2018 at 101.562, according to a company release.

The total issue size is now $1.7 billion, including $100 million priced on July 24, 2012, $200 million priced on Jan. 20, 2012 and $1.3 billion priced on Aug. 22, 2011.

Deutsche Bank managed the sale.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

Paul A. Harris contributed to this review.

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