International Game, Waste Management among issuers, new notes trade up, oil a little less busy

By Andrea Heisinger

New York, June 3 - International Game Technology, Health Care REIT, Inc., Waste Management, Inc., Tri-State Generation & Transmission Association Inc. and Oklahoma Gas & Electric Co. each priced small issues of bonds on Thursday as deals continued to trickle into the high-grade market.

A sovereign sale was also done late in the day by Finance for Danish Ministry. The $1.75 billion of short bonds in two tranches are backed by the Danish government.

Oklahoma City-based Oklahoma G&E sold $250 million of 30-year bonds early in the day.

Health Care REIT reopened its 6.125% notes due 2020 to add $150 million. It brings the total issuance to $450 million, including bonds sold in March.

International Game Technology priced its $300 million deal of 10-year senior notes by mid-afternoon at about the same time as the Waste Management sale of $600 million in 10-year notes was sold.

One of the last deals to get done for the day was from Tri-State Generation & Transmission with a downsized sale of $400 million in 30-year bonds priced under Rule 144A. The size was announced a week earlier at $500 million.

The high-grade tone was up for the second day in a row, as stocks dipped and some issuers priced bonds ahead of Friday's unemployment figures.

"I would say it was pretty decent out there," one source said.

All of the day's sales were on the small side, with the largest one topping out at $600 million. Unlike the previous day, none were increased in size.

On the secondary side of the market, some focus was again on bonds from BP Capital Markets plc and Transocean Inc. although the downward slide halted somewhat on the news that a pipe had been successfully cut, paving the way for a cap to be put on the well leaking into the Gulf of Mexico. Bonds from the sector remained active, but not at the top of the volume charts.

New and recent bonds were resoundingly tighter in trading, with all of Wednesday's new deals coming in further.

Of Thursday's sales, the International Game and Oklahoma Gas & Electric bonds came in the most when they were freed to trade. Both tranches of the Consolidated Edison Co. of New York, Inc. deal were 10 to 15 bps better, and the Duke Energy Carolinas LLC 10-years came in nearly 20 bps.

The Markit Series 14 CDX index showed spreads were unchanged from the previous day. They were again at 117 bps, a source said, after tightening about 5 bps.

Treasuries ended the day slightly wider, but were improved from Wednesday, a source said, when most of the curve was about 8 bps weaker.

On Thursday, the five-year note was out 1 basis point to 2.11% and the 30-year bond was out 3 bps to 4.27%. The 10-year note was quoted at 3.36%, or 2 bps wider than the previous day.

Waste Management prices 10-year

Houston-based waste services company Waste Management priced $600 million in 4.75% 10-year senior unsecured notes (Baa3/BBB/BBB) at 147 bps over Treasuries, an informed source said.

They were priced at the tight end of talk for a spread in the 150 bps area.

The notes are guaranteed by subsidiary WM Holdings Inc.

Bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets and Goldman Sachs & Co. Inc.

The 10-year bond tightened only slightly in trading. A source quoted it at a bid of 144 bps and offer of 142 bps.

Proceeds are going to repay $600 million in outstanding 7.375% senior notes maturing in August 2010, plus interest.

International Game taps market for $300 million

Nevada-based International Game Technology priced a $300 million deal of 5.5% 10-year senior unsecured notes (Baa2/BBB) by mid-afternoon to yield Treasuries plus 220 bps, a source who worked on the transaction said.

Bookrunners were Deutsche Bank Securities and Morgan Stanley & Co. Inc.

Proceeds are being used to reduce the debt outstanding under a second amended and restated credit agreement dating from June 8, 2009.

The bond improved around 10 bps once hitting the secondary. It was quoted at 211 bps bid and an offer of 208 bps.

The gaming company is based in Reno, Nev.

Bonds price ahead of unemployment numbers

Predictions of a mostly empty market didn't exactly come true for the day, as syndicate desks and companies decided that the market looked good enough at the open to go ahead with some sales before unemployment figures come out Friday.

"It was about as good as yesterday," a source who worked on one of the sales said. "We maybe saw a little bump by the end of the day."

The day was actually busier volume-wise with new deals. Most of them were smaller, with the exception of the two-tranche sovereign sale from Finance for Danish Ministry.

Still, other companies are waiting until the coming week to see how the BP oil well capping pans out.

"I don't know - things could be different by Monday if that happens," a syndicate source said. "It's kind of been the talk of the market, at least in trading."

Oklahoma Gas prices $250 million

Utility company Oklahoma Gas & Electric priced $250 million of 5.85% 30-year senior unsecured bonds (A2/BBB+/AA-) by early afternoon at Treasuries plus 162.5 bps, a source away from the deal said.

The utility's notes were one of the strongest performers of the new bonds once they hit the secondary market. They tightened between 5 and 10 bps to 156 bps bid, 152 bps offered after pricing at 162.5 bps.

Mizuho Securities USA Inc., RBS Securities and UBS Investment Bank ran the books.

Proceeds are being added to general funds and being used to fund an ongoing capital expenditure program or for working capital.

The electric utility is based in Oklahoma City.

Health Care REIT reopens 10-year

Health Care REIT reopened its issue of 6.125% 10-year senior unsecured notes to add $150 million, a source away from the sale said.

Total issuance is now $450 million including $300 million priced on March 30 at Treasuries plus 325 bps.

The notes (Baa2/BBB-/BBB) priced at a spread of 261.6 bps over Treasuries.

Bookrunners were Bank of America Merrill Lynch and Deutsche Bank Securities.

Proceeds are being used for general corporate purposes, including investing in properties and repaying borrowings under an unsecured line of credit and other debt.

The senior housing and healthcare real estate investment trust is based in Toledo, Ohio.

Tri-State Generation downsizes

Tri-State Generation & Transmission Association priced a downsized $400 million of 6% 30-year bonds (Baa1/A) late in the afternoon at 187.5 bps over Treasuries, a market source said.

The deal was initially announced late the previous week at $500 million. It was priced under Rule 144A.

Bookrunner was Credit Suisse Securities.

The electric cooperative is based in Westminster, Colo.

Finance for Danish Ministry sells notes

Finance for Danish Industry sold $1.75 billion of notes (Aaa/AAA/AAA) in two tranches late in the day, a market source said.

The $1 billion of 2% three-year notes priced at a spread of Treasuries plus 80.3 bps.

The $750 million of three-year floating-rate notes was priced at par to yield three-month Libor plus 37 bps.

Both tranches were priced under Rule 144A.

The sale is guaranteed by the government of Denmark.

Bookrunners were Bank of America Merrill Lynch, Deutsche Bank Securities and Morgan Stanley & Co. Inc.

The corporate and investment bank is based in Copenhagen.

New ConEd bonds continue to tighten

Two tranches priced by ConEd of New York were continuing to tighten in next-day trading as of late afternoon, a trader said.

The 4.45% notes due 2020 were sold at 115 bps over Treasuries and were quoted at 105 bps bid, 100 bps offered. This was a steady improvement from the previous day's quote of 112 bps bid, 110 bps offered.

The 5.7% 30-year bond did equally well. It was quoted at 140 bps bid, 135 bps offered. It had come in only slightly the previous day to 145 bps bid, 140 bps offered.

Duke Energy notes pull in

A new 4.3% bond due 2020 from Duke Energy Carolinas was one of the biggest movers of the day. The note priced at 100 bps over Treasuries on Wednesday and was quoted at 84 bps bid, 80 bps offered Thursday. That was about a 10 bps improvement from the previous day when they were quoted at 92 bps bid, and an offer of 90 bps.

Tanger tightens 20 bps

A 6.125% note from Tanger Properties LP was tighter in next-day trading, a source said. It priced late Wednesday at 287.5 bps over Treasuries, and was at 270 bps bid, with no offer, late Thursday.

Goldman ahead of oil names in trading volume

The focus of the top-traded bonds in the investment-grade market shifted slightly by early afternoon on Thursday, a source said.

The previous day had seen the top three most traded bonds coming from Transocean Inc., and while its notes due 2013 and 2018 remained a presence volume-wise, the top spot was handed to Goldman Sachs Group Inc.

The financial's 6% notes due 2020 were trading at 245 bps over Treasuries, which is significantly tighter than its pricing level of 280 bps.

A 4.75% bond due 2019 from BP Capital Markets plc continued to trade at high volume, but was quoted at 249 bps - about 50 bps out from where it had priced in 2009.

Other bonds from BP and Transocean also were trading steadily.

Transocean bonds trade at good volume

A trader in the junk bond market said that three Transocean bonds that have been active since the BP oil spill happened were unchanged to up slightly on a dollar basis on Thursday.

The company's 5.75% note due 2013 and the 6s due 2018 were up in volume at about $60 million, he said.

The 2013 was up ½ to ¾ of a point to 94.5 bid, 95.5 offered, he said. The bond due 2018 was unchanged at 92.5 bid, 93.5 offered.

A 6.8% bond due 2038 from Transocean was "up a good 2 points" to 86/88.

All of these bonds were at "pretty good volume," the trader said, adding that the $60 million volume was "nothing to sneeze at."

-Paul Deckelman contributed to this report

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