Hasbro, Oncor price; Province of Ontario on deck; Celgene mixed; National Retail better

By Cristal Cody and Aleesia Forni

Virginia Beach, May 8 - The high-grade bond market saw another subdued primary on Thursday as Federal Reserve chairwoman Janet Yellen gave her second day of testimony before Congress.

The session's largest deal was priced by Hasbro Inc., selling $600 million of senior notes in seven- and 30-year tranches, a syndicate source said.

The sale included a $300 million offering of 3.15% notes due 2021 priced with a spread of Treasuries plus 100 basis points and $300 million of 5.1% 30-year bonds sold at 170 bps over Treasuries.

Both tranches priced at the tight end of price talk.

The session also saw Oncor Electric Delivery Co. sell $250 million of 2.15% five-year first mortgage bonds with a spread of Treasuries plus 55 bps, according to a market source.

Fannie Mae was also in the market on Thursday. The mortgage lender sold $2 billion of 1.75% five-year Benchmark Notes with a spread of Treasuries plus 12 bps.

More than $13 billion of high-grade paper sold this week, though at least one deal is expected to price on Friday to add to that figure.

The Province of Ontario announced price guidance for its planned 10-year benchmark offering of notes in the area of at mid-swaps plus the low 50 bps area, according to a market source.

The notes are expected to price on Friday.

Meanwhile, corporate investment-grade bond funds saw $2.13 billion of outflows for the week ended May 7, according to Lipper.

This compares to last week's outflows of $73 million, the first outflows seen since October 2013.

Investment-grade funds have seen more than $35 billion of inflows year to date.

High-grade bonds were flat to modestly better on the day, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 bp to a spread of 65 bps.

Celgene Corp.'s new senior notes (Baa2/BBB+/) were mixed in trading on Thursday, with the long bonds slightly weaker, according to a market source.

National Retail Properties, Inc.'s 3.9% senior notes due 2024 (Baa1/BBB/BBB+) brought on Monday traded slightly better, according to a market source.

Hasbro prices tight

Hasbro was in Thursday's market with a $600 million two-part offering of senior notes (Baa2/BBB/BBB+) due 2021 and 2044, according to a syndicate source.

The $300 million of 3.15% seven-year notes priced with a spread of Treasuries plus 100 bps, or 99.906 to yield 3.165%.

A second tranche was $300 million of 5.1% 30-year bonds sold at 99.817 to yield 5.112%. The notes sold at 170 bps over Treasuries.

Both tranches sold at the tight end of talk.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and RBS Securities Inc. were the joint bookrunners.

Proceeds will be used to repay $425 million of the company's 6.125% notes due 2014, and remaining proceeds will be used for general corporate and working capital purposes, which may include the repayment of debt, capital expenditures, acquisitions and repurchases of shares of its common stock.

The toy and game company is based in Pawtucket, R.I.

Oncor mortgage bonds

Oncor Electric Delivery priced $250 million of 2.15% first mortgage bonds (Baa3/A/BBB+) due 2019 on Thursday with a spread of Treasuries plus 55 bps, according to a market source.

Pricing was at 99.895 to yield 2.172%.

BofA Merrill Lynch, Barclays, Mitsubishi UFJ Securities, Morgan Stanley, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the joint bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to repay debt and for general corporate purposes.

The electric company is based in Dallas.

Fannie Mae taps market

Fannie Mae priced $2 billion of 1.75% notes due June 20, 2019 with a spread of Treasuries plus 12 bps, according to a company news release. Pricing was at 99.947 to yield 1.761%.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Nomura Securities International Inc. were the joint lead managers.

The government-backed mortgage lender is based in Washington, D.C.

About 81% of the orders came from the United States, 12.2% from Asia, 5.6% from Europe and 0.4% from other regions.

Fund managers accounted for 51%, state and local governments 16.6%, insurance companies 15%, central banks 11.9%, commercial banks 5.3% and retail 0.2%.

Ontario on deck

The Province of Ontario has set price guidance for its planned 10-year benchmark offering of notes (Aa2/AA-/) at mid-swaps plus the low 50 bps area, according to a market source.

The notes are expected to price on Friday.

CIBC World Markets Corp., Credit Suisse Securities, JPMorgan and RBC Capital Markets LLC are the joint bookrunners.

National Retail better

National Retail's 3.9% notes due 2024 climbed to 100.41 during the session, according to a market source.

The company priced $350 million of the notes on Monday at 99.789 to yield 3.924%.

The real estate investment trust for retail properties is based in Orlando.

Bank/brokerage CDS mixed

Investment-grade bank and brokerage CDS prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 65 bps bid, 68 bps offered. Citigroup Inc.'s CDS costs declined 1 bp to 68 bps bid, 71 bps offered. JPMorgan Chase & Co.'s CDS costs firmed 1 bp to 53 bps bid, 56 bps offered. Wells Fargo & Co.'s CDS costs tightened 1 bp to 34 bps bid, 37 bps offered.

Merrill Lynch's CDS costs firmed 1 bp to 69 bps bid, 73 bps offered. Morgan Stanley's CDS costs were unchanged at 71 bps bid, 74 bps offered. Goldman Sachs Group, Inc.'s CDS costs closed flat at 82 bps bid, 85 bps offered.

Paul Deckelman contributed to this review

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