Lloyds TSB, Chevron Phillips, Texas Gas, OeKB among sellers; industrials firm 2 bps-3 bps

By Andrea Heisinger and Cristal Cody

New York, Jan. 13 - Lloyds TSB Bank plc, Texas Gas Transmission LLC, Chevron Phillips Chemical Co. LLC, Oesterreichische Kontrollbank AG, Japan Finance Corp. and Georgia Power Co. priced bonds on Thursday as the primary jumped back to life.

A new $1.75 billion deal was also announced by France's Credit Agricole SA, but it was unclear at press time if the deal had priced. The offering was done under Rule 144A and has tranches of three-year floating-rate notes and three-year fixed-rate notes.

The day saw the return of corporate bonds. This was a change from much of the week during which the primary market was dominated by Yankee bonds and sovereign paper.

The largest sale of the day came from Lloyds TSB Bank. The $4.75 billion of bonds have maturities of five years and 10 years and were sold late in the day.

Texas Gas Transmission increased its deal to $325 million from $250 million of 10-year senior notes. The notes were priced under Rule 144A.

Another utility name in the market was Public Service Co. of Oklahoma. The electric company sold $250 million of 10-year senior notes.

Petrochemical company Chevron Phillips sold $300 million of 10-year senior notes in the Rule 144A market.

Southern Co. unit Georgia Power priced $300 million of two-year senior floating-rate notes.

OeKB had one of the first deals to price for the day. The sovereign sold $1 billion of 1.375% three-year notes guaranteed by the Austrian government.

This was followed by Japan Finance, which sold $1.5 billion of five-year notes guaranteed by the Japanese government.

A syndicate source said the market will likely be full of financials and others getting in before or after earnings announcements for the near future.

"We're not going to see big corporates probably for a while," the source said, adding "maybe more utilities."

There was a handful of utilities and oil names in the market for the day, but most were smaller sizes.

"Friday should be quiet if it's like other weeks. Could be one or two things if we're lucky," the source said.

The utilities and industrials sector firmed overall in the secondary market on Thursday.

"We were 2 to 3 better in fairly light trading," a trader said.

Chevron Phillips Chemical's notes firmed 10 bps in secondary trading, according to sources. Public Service Co. of Oklahoma's notes were flat in trading.

The Markit CDX Series 14 North American investment-grade index eased 1 basis point to an 85- bps spread, Markit Group Ltd. said.

Treasuries rallied after the sale of 30-year bonds, sending yields lower across the curve. The Treasury auctioned $13 billion of 30-year bonds at a yield of 4.515%.

The 30-year bond yield fell 3 bps to 4.5%. The yield on the 10-year note fell 6 bps to 3.3%.

Lloyds sells $4.75 billion

Lloyds TSB Bank priced $4.75 billion of senior notes (Aa3/A+/AA-) in two tranches late in the day, a source close to the deal said.

A $2.25 billion tranche of 4.875% five-year notes priced at Treasuries plus 300 bps. The notes were sold in line with talk in the 300 bps area.

The second part was $2.5 billion of 6.375% 10-year notes priced at a 312.5 bps over Treasuries spread. Price talk was in the 312.5 bps area.

Barclays Capital Inc., Bank of America Merrill Lynch and Goldman Sachs & Co. were bookrunners.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by financial services company Lloyds Banking Group plc, which is based in London.

Texas Gas upsizes deal

Texas Gas Transmission sold an upsized $325 million of 4.5% 10-year notes (Baa1/BBB) at 120 bps over Treasuries, a source who worked on the deal said.

The deal size was increased from $250 million. The notes were priced in the 120 bps to 125 bps range.

The notes were priced under Rule 144A.

Barclays Capital Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. were bookrunners.

The notes were not seen trading in the secondary market, according to sources.

The natural gas pipeline is based in Owensboro, Ky.

Chevron sells under Rule 144A

Chevron Phillips Chemical priced $300 million of 4.75% 10-year notes (Baa1/BBB) to yield Treasuries plus 150 bps, said a source away from the offering.

The notes were priced under Rule 144A.

J.P. Morgan Securities Inc. and RBS Securities Inc. were bookrunners.

The securities were seen trading tighter on the bid side at 144 bps in the secondary market, a trader said.

Late afternoon, the notes were quoted tighter at 140 bps bid, 135 bps offered, according to another source.

The petrochemical company is based in The Woodlands, Texas.

Public Service Okla. 10-years

Public Service Co. of Oklahoma priced $250 million of 4.4% 10-year senior notes, series I, (Baa1/BBB/BBB+) at a spread of 115 bps over Treasuries, an informed source said.

Goldman Sachs & Co., KeyBanc Capital Markets and RBS Securities Inc. were bookrunners.

Proceeds will be used to refund all or a portion of outstanding $75 million of 4.75% senior notes due 2011 and outstanding $200 million of 6% notes due 2032. Any remainder will be used for general corporate purposes.

The notes were mostly flat in the secondary market at 115 bps bid, 113 bps offered, a trader said.

The electric utility is based in Tulsa.

Georgia Power prices floaters

Georgia Power priced $300 million of two-year senior floating-rate notes (A3/A/A+), series 2011A, at par to yield Libor plus 27 bps, according to an FWP with the Securities and Exchange Commission.

Goldman Sachs & Co. and RBS Securities Inc. were bookrunners.

Proceeds are being used to repay a portion of outstanding short-term debt and for general corporate purposes, including the company's continuous construction program.

The electric utility subsidiary of the Southern Co. is based in Atlanta.

OeKB sells $1 billion

Austria's Oesterreichische Kontrollbank sold $1 billion of 1.375% three-year guaranteed global notes (Aaa/AAA), according to an FWP with the SEC.

Bookrunners were Goldman Sachs & Co., J.P. Morgan Securities Inc. and UBS Securities LLC.

The sale is guaranteed by the Republic of Austria.

The export and financial services company for Austrian businesses is based in Vienna.

Japan guaranteed bonds

Japan Finance priced $1.5 billion of 2.5% five-year guaranteed bonds to yield Treasuries plus 57.1 bps, according to an FWP.

The notes (Aa2/AA) priced after going overnight from Wednesday.

Deutsche Bank Securities Inc., Barclays Capital Inc. and Goldman Sachs & Co. were bookrunners.

Proceeds are being put toward the operation of the Japan Bank for International Cooperation.

The sale is guaranteed by the government of Japan.

The lender to the general public and Japanese businesses is based in Tokyo.

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