Cigna, State Street, Dominion, Western Union price paper; GE Capital notes due 2021 widen

By Andrea Heisinger and Cristal Cody

New York, March 2 - Dominion Resources, Inc., Cigna Corp., State Street Corp., Western Union Co., National Rural Utilities Cooperative Finance Corp. and Developers Diversified Realty Corp. sold bonds on Wednesday in the busiest day yet this week for new deals.

The largest deal of the day came from State Street after it upsized to $2 billion in three parts. A tranche of three-year floaters was added to the five-year and 10-year notes originally announced.

Cigna priced $600 million of notes split evenly between 10- and 30-year maturities.

One of the largest sales came from Dominion, which priced an upsized $900 million sale in two parts. The tranche of 10-year notes was increased by $100 million.

A split-rated offering was sold by Developers Diversified Realty. The $300 million sale of seven-year notes was upsized from $250 million.

There was a $300 million issue of two-year floating-rate notes by Western Union. Another sale of short-dated floaters came from National Rural Utilities Cooperative with $250 million of notes due 2011.

Old Republic International Corp. announced a $250 million sale of 10-year senior notes. The deal is being done concurrently with a $250 million offering of convertible notes.

In the secondary market, General Electric Capital Corp.'s 5.3% subordinated notes due 2021 have widened nearly 20 basis points in trading since Friday, while its other bonds traded mostly unchanged, sources said.

The new bonds from Cigna and State Street Bank traded mostly flat.

The Markit CDX Series 14 North American investment-grade index also was unchanged at a spread of 85 bps, according to Markit Group Ltd.

Overall investment-grade Trace volume rose about 5% to nearly $14.5 billion, a market source said.

Treasuries sold off on Wednesday, sending yields up 8 bps on the 10-year note. On the long end of the curve, the 30-year bond yield increased 8 bps to 4.56%.

Bonds turned downward following the release of the Federal Reserve's Beige Book, which reported signs of inflation and of higher costs being passed on to consumers.

"Traders are squared," a source said. "We're into the second trading day of the month, and the employment report is on Friday."

The Labor Department releases its monthly job report on Friday.

Investors happy for new paper

After a short drought of new issues, investors have been clamoring for bonds, a source said late on Wednesday after several bonds had been priced.

"I think people have been waiting," she said. "A lot of deals have gone over well, and spreads have tightened. They just figured it was a good time [to issue]."

Nearly all of the week's deals have been oversubscribed in some capacity, and some have been upsized because of it.

"[Issuers are] realizing there's interest," a source said. "Issuers are still hesitant. Who knows what will happen overnight - everything could blow up."

There are at least a couple of deals expected for Thursday, sources said.

Cigna's two-tranche deal

Cigna priced $600 million of senior notes (Baa2/BBB/BBB) in two tranches, a market source away from the sale said.

Another source who worked on the deal said that there was "over $4.5 billion" on the books, leaving the issue about seven times oversubscribed. Interest was split fairly evenly between the two notes, the source said.

The $300 million of 4.5% 10-year notes sold at a spread of 112.5 bps over Treasuries. They priced at the tight end of guidance in the 115 bps area, plus or minus 5 bps.

A $300 million tranche of 5.875% 30-year bonds priced at Treasuries plus 137.5 bps. Price guidance was in the 140 bps area, plus or minus 5 bps, and the notes came in at the tight end of that.

Bank of America Merrill Lynch, Morgan Stanley & Co., Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds are being used for general corporate purposes, including the repayment of $226 million outstanding 6.375% notes due 2011.

In the secondary market, Cigna's notes were slightly tighter on the offer side, a trader said.

The notes due 2021 were seen at 112 bps bid, 109 bps offered.

The tranche of bonds due 2041 traded at 112 bps bid, 109 bps offered.

The health services company is based in Philadelphia.

State Street upsizes

Boston-based financial holding company State Street priced an upsized $2 billion of senior notes (A1/A+/A+) in three parts by late afternoon, said a market source away from the deal.

A $250 million tranche of three-year floating-rate notes was added to the deal at the launch, a source said. The notes priced at par to yield Libor plus 35 bps.

The $1 billion of 2.875% five-year notes priced at a spread of 80 bps over Treasuries.

A third part was $750 million of 4.375% 10-year notes that sold at Treasuries plus 95 bps.

Morgan Stanley and Bank of America Merrill Lynch ran the books.

Proceeds are being used for general corporate purposes.

No bids were seen in secondary trading on State Street Bank's fixed-rate notes, a source said.

The five-year notes were quoted at 77 bps offered, while the 10-year tranche was seen 5 bps tighter on the offer side at 90 bps.

The financial holding company is based in Boston.

Dominion's upsized sale

Dominion Resources priced an upsized $900 million of senior notes, 2011 series A (Baa2/A-/BBB+), by early afternoon in two parts, according to an FWP filing with the Securities and Exchange Commission.

The size was increased from $800 million, with $100 million added to the 10-year maturity.

The $400 million of 1.8% three-year notes priced at a spread of Treasuries plus 68 bps.

A second tranche was $400 million of 4.45% 10-year notes priced at 105 bps over Treasuries. Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds are being used for general corporate purposes, including short-term debt repayment and commercial paper.

The energy production and transportation company is based in Richmond, Va.

Developers Diversified sells

Developers Diversified Realty priced a split-rated, upsized $300 million of 4.75% seven-year notes (Baa3/BB+/BB) to yield Treasuries plus 205 bps, according to a press release and FWP filing with the SEC.

The bookrunners were Bank of America Merrill Lynch, JPMorgan and RBC Capital Markets Corp.

Proceeds are being used to repay debt.

The real estate investment trust of shopping and business centers is based in Beachwood, Ohio.

Western Union's short floaters

Western Union priced $300 million of two-year floating-rate notes (A3/A-) at par to yield Libor plus 58 bps, according to an FWP filing with the SEC.

JPMorgan and Morgan Stanley were the bookrunners.

Proceeds are being used for general corporate purposes.

The money transfer and payment company is based in Englewood, Colo.

National Rural prices

National Rural Utilities Cooperative Finance sold $250 million of senior floating-rate notes (A2/A) at par to yield Libor plus 10 bps, according to an FWP filing with the SEC.

RBC Capital Markets was the agent.

The issuer provides financial and investment services to electric cooperatives and is based in Herndon, Va.

Old Republic plans sale

Old Republic International announced a $250 million sale of 10-year senior notes (Baa1/BBB+) on Wednesday in a 424B5 filing with the SEC.

It could not be confirmed if the notes had priced at press time.

Morgan Stanley and UBS Securities LLC are the bookrunners.

Proceeds are being used to repay $107.4 million of debt in connection with the PMA Capital Corp. acquisition. The remainder will be used for general corporate purposes, including capital contributions to insurance company subsidiaries.

The holding company for insurance underwriting is based in Chicago.

GE Capital 10-years widen

General Electric Capital's 5.3% subordinated notes due 2021, which widened 15 bps in the previous week to 134 bps on Friday, moved out in trading again on Wednesday, a trader said.

"Saw the bonds offered today between 151 and 153 and a brokers market of 158,153," the trader said.

Meanwhile, the company's 5.625% notes due 2018 were unchanged at 78 bps, while the shorter 0.562% notes due 2014 narrowed 5 bps to 65 bps over Treasuries, a source said.

Fairfield, Conn.-based General Electric Capital is the financing arm of General Electric Co.

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