IBM, Rubbermaid, Citi, Omnicom, Altria among $11.5 billion deals; Expedia notes firm 10 bps

By Andrea Heisinger and Cristal Cody

New York, Aug. 2 - Omnicom Group Inc., International Business Machines Corp., ArcelorMittal, Newell Rubbermaid Inc., Credit Suisse AG, New York branch, Citigroup Inc. and Altria Group, Inc. all had deals price on Monday. It was the busiest day in recent memory, one source said, with a tally of about $11.5 billion priced in the investment-grade sector.

"We thought it would be busy, but not this busy," the source said late in the day. "It's the same thing - the rates are low."

The majority of the sales were at or above $1 billion in size.

IBM priced $1.5 billion of short, three-year bonds at the tight end of the guidance range.

ArcelorMittal sold $2.5 billion in three tranches, with a reopening of 30-year bonds added after the sale was announced. All of the notes priced at the tight end of guidance.

Omnicom had one of the first deals to price with its upsized $1 billion of 10-year notes. The size was increased from $750 million, and it priced at the tight end of guidance.

Credit Suisse priced $2 billion of 10-year notes in line with talk.

Newell Rubbermaid priced $550 million of 4.7% 10-year notes by late afternoon. The proceeds are being used for several purposes, including a common stock repurchase.

There was a reopening of five-year notes by Altria Group to add $200 million, with the notes pricing in line with guidance.

Online travel company Expedia sold an upsized $750 million of split-rated 10-year notes late in the day. The notes were priced privately and off of the high-grade desk.

Citigroup priced $3 billion of notes in two tranches, including a reopening of a five-year note. The five-year was added to the deal due to demand for the shorter maturity, a source said.

Also on the radar is an upcoming debt offering from MetLife Inc. The insurance and financial services company is planning a sale of about $3 billion in different series and maturities.

All of the new offerings priced on Monday tightened in the secondary market, with Expedia's notes due 2020 firmer by 10 bps, sources said.

The CDX Series 14 North American investment-grade index firmed on Monday to a spread of 99 bps compared to 104 bps on Friday, a source said.

Overall investment-grade Trace volume added 14% to move back above $10 billion, according to a source.

But, for the most part, the "secondary seemed quiet today," one trader said.

A stock rally sent Treasury prices down from positive European bank earnings and better than expected U.S. manufacturing data.

Treasuries saw "yield increases across the board," a source said.

The yield on the 10-year benchmark note rose 6 bps to 2.96%.

The yield on the 30-year bond rose to 4.07% from 3.99%.

IBM prices short bond

International Business Machines priced $1.5 billion of 1% three-year notes (A1/A+/A+) at Treasuries plus 30 bps, an informed source said.

The notes were sold at the tight end of guidance in the range of 30 bps to 35 bps.

The notes immediately tightened in secondary trading to 27 bps bid, 25 bps offered, according to a trader.

As the market closed, the notes were seen tightening on the offer side to 21 bps, a source said.

Barclays Capital Inc., BNP Paribas Securities and Goldman Sachs & Co. Inc. were bookrunners.

The computer and technology company is based in Armonk, N.Y.

ArcelorMittal three tranches

Steel maker ArcelorMittal sold $2.5 billion of notes (Baa3/BBB/BBB) in three tranches late in the day, a market source close to the deal said.

The deal was originally announced in two tranches, according to a 424B5 filing with the Securities and Exchange Commission, with a reopening of 30-year bonds added.

A $1 billion tranche of 3.75% five-year notes sold at a spread of Treasuries plus 230 bps. The tranche was talked in the 235 bps area and priced at the tight end of that.

The $1 billion tranche of 5.25% 10-year notes priced with a spread of 248 bps over Treasuries. Guidance was in the 255 bps area, and the notes were priced at the tight end of that.

A third tranche was a reopening of 7% notes due 2039 to add $500 million. They priced to yield Treasuries plus 255 bps. Talk was in the 260 bps area.

Total issuance for these reopened bonds is $1.5 billion, including $1 billion priced on Oct. 1, 2009 at 345.2 bps over Treasuries.

Bank of America Merrill Lynch, Citigroup Global Markets, J.P. Morgan Securities and Morgan Stanley & Co. Inc. ran the books.

Proceeds are going to refinance existing debt.

The steel producer is based in Luxembourg.

Issuers flock to primary

New deals exploded out of the gate to start the week, with issuers coming out of earnings blackout and lured by low rates.

One source said of the IBM deal, "When have you ever seen a 1% coupon?"

He added that it is one of the lowest coupons for that short of a bond - ever.

Other issuers, like Newell Rubbermaid and ArcelorMittal, tapped the market to refinance debt and buy back shares.

"Coupons are low now, so they picked the right time," a syndicate source who worked on the Rubbermaid deal said.

Most of the deals did not grow from their original amounts, with a couple of exceptions, such as Omnicom and Citigroup, along with ArcelorMittal adding a tranche of reopened notes.

It's unclear what the new deal volume will look like later in the week, but there are guaranteed to be some deals on Tuesday and Wednesday, a source said.

"We'll have some momentum, and I would think we'll see a few things tomorrow," the syndicate source said. "I don't know if we'll have any blockbusters, but it should be busy."

Omnicom upsizes 10-year

Omnicom Group, along with subsidiaries Omnicom Capital Inc. and Omnicom Finance Inc. sold an upsized $1 billion of 4.45% 10-year senior unsecured notes (Baa1/BBB+/A-) in early afternoon at Treasuries plus 155 bps, an informed source said.

The deal was announced at $750 million and talk was in the 160 bps area with a margin of plus or minus 5 bps.

The notes were seen tighter in afternoon trading in the secondary market at 149 bps bid, 143 bps offered, one trader said.

Late in the day, the 10-year notes were quoted by one source at 145 bps bid, 144 bps offered.

J.P. Morgan Securities was the active bookrunner, with Bank of America Merrill Lynch, Citigroup Global Markets, Deutsche Bank Securities and HSBC Securities as passives.

Proceeds are going to general corporate purposes.

The obligations of the two subsidiaries are guaranteed by Omnicom Group.

The marketing and corporate communications company is based in Greenwich, Conn., and New York City.

Credit Suisse's $2 billion

Credit Suisse, New York branch priced a $2 billion deal of 4.375% 10-year notes (Aa1/A+/AA-) at Treasuries plus 145 bps, a syndicate source away from the sale said.

The issue priced in line with guidance in the 145 bps area.

The notes firmed in secondary trading to 143 bps bid, 141 bps offered and later slightly wider on the offer side at 142 bps, according to traders.

Credit Suisse Securities Inc. ran the books.

The financial services company is based in Zurich, Switzerland.

Citi prices two tranches

Citigroup priced $3 billion of notes (A3/A/A+) in two upsized tranches late in the day, a source close to the deal said.

The terms of the notes were still being finalized at 5:30 p.m. ET, a source said.

A tranche of reopened 4.75% notes due 2015 was added to the sale that was initially only new 10-year notes.

Those notes were reopened to add $750 million and they priced at a spread of Treasuries plus 255 basis points.

Total issuance is $2.25 billion, including $1.5 billion priced on May 12 at Treasuries plus 260 bps.

A $2.25 billion tranche of 5.375% 10-year notes also sold at a spread of Treasuries plus 255 bps.

Citigroup Global Markets Inc. ran the books.

The 10-year notes were seen trading wider on the bid side at 257 bps, a source said.

The financial services provider is based in New York City.

Rubbermaid sells 10-year

Newell Rubbermaid sold $550 million of 4.7% 10-year senior unsecured notes (Baa3/BBB-/BBB) to yield Treasuries plus 175 bps, a source close to the deal said.

The notes traded tighter in the secondary market on the offer side at 175 bps bid, 167 bps offered, a trader said.

Bookrunners were Goldman Sachs & Co., Barclays Capital and Citigroup Global Markets.

Proceeds, together with cash at hand and short-term borrowings, will be used to purchase shares of common stock, purchase 2019 notes pursuant to a tender offer and for general corporate purposes, including repayment of debt.

The consumer and commercial products company is based in Atlanta.

Altria reopens five-year

Altria Group reopened its issue of 4.125% senior unsecured notes due 2015 to add $200 million, according to a market source and an FWP with the SEC.

The notes (Baa1/BBB/BBB+) priced at a spread of Treasuries plus 147 bps. They were talked in the area of 147 bps.

Total issuance is $1 billion, including $800 million issued on June 11 at 225 bps over Treasuries.

The deal is guaranteed by Philip Morris USA Inc.

Barclays Capital Inc., Credit Suisse Securities and Deutsche Bank Securities ran the books.

Proceeds are being added to a general fund for general corporate purposes.

The holding company for tobacco subsidiaries is based in Richmond, Va.

Expedia upsizes

Expedia sold an upsized $750 million of split-rated 5.95% 10-year senior unsecured notes (Ba1/BBB-/BBB-) in late afternoon to yield Treasuries plus 300 bps, a market source away from the deal said.

The size was increased from $500 million.

The notes were sold off the high-grade syndicate desk under Rule 144A and Regulation S.

The deal is guaranteed by certain subsidiaries and proceeds are being used for general corporate purposes.

Bank of America Merrill Lynch and J.P. Morgan Securities were active bookrunners.

The notes tightened 10 bps in secondary trading, sources said.

Mid-afternoon, the notes traded at 291 bps bid, 287 bps offered and later 1 bp tighter on the bid side at 291 bps.

The online travel company is based in Bellevue, Wash.

MetLife plans debt sale

MetLife is planning to sell about $3 billion of senior notes, according to a press release.

The notes would be in several series and maturities.

The debt offering is in addition to the company's sale of 75 million shares of common stock, which was also announced Monday.

Proceeds from the debt and stock sales are being used to help finance the $6.8 billion cash portion of the purchase price for MetLife's previously announced acquisition of American Life Insurance Co. from American International Group, Inc.

The insurance and financial services company is based in New York City.

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