BB&T, GATX sell bonds; Northern Trust plans senior note sale; GATX bond improves in trading

By Andrea Heisinger

New York, April 27 - A couple of bond issues from BB&T Corp. and GATX Corp. came into the high-grade market Monday.

Both priced later in the afternoon, as issuers and syndicate desks weighed fallout from a couple of news headlines such as the swine flu panic.

Northern Trust Corp. announced it would sell senior notes, on top of a common stock sale.

The secondary was fairly quiet, with the BB&T sale pricing late and the GATX bond having modest gains.

Spreads were considerably wider overall as Treasury yields came in from Friday's levels. The five-year note was 9 basis points tighter to yield 1.84% late Monday while the 30-year bond was down 5 bps with a yield of 3.83%.

GATX sells small deal

Specialized leasing company GATX sold an upsized $300 million of 8.75% five-year senior notes to yield 9%, a source close to the deal said.

The size was originally $250 million. They have a spread of Treasuries plus 714.2 bps.

The Chicago-based company is using proceeds to repay commercial paper and other short-term debt.

Banc of America Securities LLC and Citigroup Global Markets Inc. were bookrunners.

The deal had no official price guidance, a source close to it said. It was "basically in the 9% area," he said, referring to the yield. "That's where we ended up launching it. We didn't really have any comps."

The sale was announced and launched somewhat late in the day. It was a "go, no-go call in the morning," he said. The company and bookrunners were watching the markets to see what happened, he said, as the swine flu scare and an incident involving a plane flying near lower Manhattan affected the markets.

"It's kind of crazy," he said, referring to these factors' impacts.

In the end, they were minimal and the "go" call went out.

BB&T does late sale

Financial holding company BB&T priced $800 million in two tranches late Monday. A market source said the bonds hadn't been priced at 4:30 p.m. ET.

A second market source said the issue was split evenly between five- and 10-year notes. The $400 million of five-year notes priced at Treasuries plus 385 bps, while the $400 million of 10-year notes priced at Treasuries plus 395 bps.

The company, based in Winston-Salem, N.C., tapped Barclays Capital Inc. and J.P. Morgan Securities Inc. as bookrunners.

The bond priced too late for trading levels, a source said.

Northern Trust plans bonds

Investment and banking management company Northern Trust announced plans Monday for a $500 million senior note offering, according to a press release.

The proceeds, along with those from a $750 million common stock sale, will be used to redeem preferred stock and to repurchase a warrant issued to the U.S. Treasury as part of the Temporary Asset Relief Program.

Bond sale uptick expected

The number of high-grade bond offerings is expected to pick up - at least slightly - from the drought of the previous three weeks, market sources said Monday.

One source said "it can't get much slower, so there should be more action." As first-quarter earnings announcements and blackouts wind down, this seems to be the consensus.

"It's not going to be slammed like before, but there should be a few [deals]," the source said.

A second high-grade source said there will be "a couple more, mostly high-BBB [deals]. A lot of companies are coming out of blackouts."

Another syndicate source said it's difficult to predict anything, but it should be busier Tuesday if "the bird flu thing dies down."

GATX bond up in trading

The new 8.75% bond due 2014 from GATX was trading at a dollar price and was improved from its pricing level late in the day, a market source said.

The bond priced at 98.996 and was selling at 99.375.

Altria tops trading

A bond from tobacco company Altria Group Inc. was the top traded early Monday afternoon, a market source said.

The 10.2% notes due 2039 were selling at high volume, following a first-quarter earnings announcement the previous week.

The company announced a profit of $589 million for the quarter, a decrease of 76% from the same time a year earlier. This met expectations and was aided by higher cigarette prices.

On Monday, rival cigarette company Lorillard, Inc. announced net sales of $917 million for the quarter. This was a slight decrease from $921 million sales a year ago.

Bank, broker CDS widen

Bank and broker credit-default swaps were each seen generally wider late Monday, a trader said. Bank CDS costs were 5 to 15 bps wider, while brokers were out 5 to 25 bps.

IBM, Citigroup big movers

IBM International Capital and Citigroup Inc. had two of day's biggest bond movers, a market source said in late afternoon.

IBM's 5.05% bond due 2012 was nearly 40 bps tighter than the previous week. It was announced Monday that a supercomputer from the company would be challenged by the TV trivia show "Jeopardy" sometime in the coming year.

Real estate investment trust ProLogis also had a bond tightening the same amount, with its 5.5% bond due 2012 in nearly 40 bps.

Citigroup did not fare as well, with its 5.125% bond due 2014 widening almost 60 bps from the previous week. The week before, many banking names were on a high as positive earnings reports for the first quarter were released.

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