Lincoln National, DNB, Canadian Oil sell as foreign names dominate; bank paper tightens

By Andrea Heisinger and Cristal Cody

New York, March 26 - A handful of issuers sold bonds in the high-grade market on Monday, but most were from companies based outside the United States.

Lincoln National Corp. was the lone domestic name. It was joined by Canadian Oil Sands Ltd. and Norway's DNB ASA.

Lincoln National sold $300 million of 10-year paper.

DNB priced $2 billion of five-year paper tighter than guidance.

Canadian Oil Sands priced $700 million of notes with maturities in 2022 and 2042.

There also was a deal on tap from U.K.-based Anglo American Capital plc, although terms of the five-year senior notes weren't available at press time. They were being sold under Rule 144A and Regulation S.

"Lot of weird foreign deals out there," one source said, summing up his take on the day. "None were very exciting, although I think it was DNB's first deal and maybe [Canadian] Oil Sands too."

A syndicate source confirmed later that it was DNB's first deal of dollar-denominated senior notes.

The week is expected to see between $15 billion and $20 billion in deals, with Monday's trades making a good head start on that amount.

More sales are expected on Tuesday, although nothing solid yet.

"We had a couple we were talking to today," a source at a large syndicate said. "I think with today's [deals] we'll see some more tomorrow."

In the secondary market, Canadian Oil Sands' two tranches traded 5 basis points better, a trader said.

Lincoln National's notes firmed 5 bps after pricing in secondary trading.

"It was a positive tone but overall everything was unchanged to a basis point or two better," a trader said.

The Markit CDX Series 18 North American investment-grade index firmed 2 bps to a spread of 89 bps over the day.

Bank and financial paper was the exception and traded 5 bps to 15 bps better, a trader said.

"Morgan Stanley and Goldman [Sachs] are leading the pack there," the trader said.

The new notes from DNB were not seen initially in afternoon trading.

Investment-grade bank and brokerage credit default swaps costs declined on the session.

Bank of America's CDS costs fell 15 bps to 195 bps bid, 200 bps offered. Wells Fargo's CDS costs traded 4 bps lower at 79 bps bid, 84 bps offered.

The trader said that brokerage CDS costs from Merrill Lynch fell 15 bps to 210 bps bid, 220 bps offered. Morgan Stanley's CDS costs firmed 13 bps to 292 bps bid, 297 bps offered. Goldman Sachs' CDS costs were 16 bps lower at 217 bps bid, 222 bps offered.

In other secondary trading, Kinross Gold Corp.'s notes due 2021 firmed 15 bps from Friday, a source said.

Treasuries ended lower as stocks improved. The 10-year note yield rose 2 bps to 2.25%. The 30-year bond yield climbed 4 bps to 3.34%.

DNB prices tight

DNB sold $2 billion of 3.2% five-year senior notes (Aa3/A+/) at a spread of 215 bps over Treasuries, an informed source said.

The paper priced tighter than guidance in the 220 bps to 225 bps range, the source said, adding that it was the issuer's inaugural sale of senior notes.

Bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

The offering was done under Rule 144A and Regulation S.

The financial services group is based in Oslo.

Canadian Oil sells two parts

Canadian Oil Sands sold $700 million of senior notes (Baa2/BBB/) in two parts, a source close to the deal said.

A $400 million tranche of 4.5% 10-year notes priced at a spread of Treasuries plus 235 bps.

The second part was $300 million of 6% 30-year bonds sold at a spread of 270 bps over Treasuries.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and RBC Capital Markets LLC were bookrunners.

The deal was priced under Rule 144A and Regulation S.

The proceeds are being used to repay debt due on Aug. 15, 2013 and related fees and for general corporate purposes.

Both tranches traded 5 bps better in the secondary market late afternoon, a trader said.

Canadian Oil Sands is a Calgary, Alta., owner of a 36.74% interest in the Syncrude Project. Syncrude can produce 350,000 barrels per day of light, high-quality crude oil.

Lincoln sells 10-year notes

Lincoln National priced $300 million of 4.2% 10-year senior notes (Baa2/A-/BBB+) at a spread of Treasuries plus 195 bps, a source away from the deal said.

Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC were bookrunners.

The proceeds are being used to repay all or a portion of $300 million 5.65% senior notes maturing on Aug. 27, with any remainder used for general corporate purposes.

In the secondary market, Lincoln National's notes due 2022 firmed to 190 bps bid, 187 bps offered, a trader said.

The holding company for insurance and retirement subsidiaries is based in Radnor, Pa.

Morgan Stanley tightens

Morgan Stanley's 5.5% senior notes due 2021 firmed 13 bps to 360 bps bid, 352 bps offered in trading over the day, according to a trader.

Morgan Stanley sold $1 billion of the notes (A2/A/A) on Oct. 27 at a spread of 335 bps over Treasuries.

The investment bank is based in New York.

Kinross Gold tightens

Kinross Gold's 5.125% notes due 2021 (Baa3/BBB-) firmed to 275 bps bid from 290 bps on Friday in the secondary market, a source said.

The company's long bonds, 6.875% bonds due 2041, traded flat at 346 bps.

Kinross sold both tranches Aug. 15.

The $500 million offering of notes due 2021 priced at a spread of 290 bps over Treasuries. The $250 million tranche of long bonds priced at a spread of 315 bps plus Treasuries.

The mining and gold ore processing company is based in Toronto.

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