Dow Chemical, OneBeacon, Jones Lang bring deals ahead of election results; Interpublic firms

By Aleesia Forni and Andrea Heisinger

New York, Nov. 6 - The pace of the investment-grade bond market slowed on Tuesday ahead of election results.

Following in the footsteps of the $14.7 billion, six-tranche megadeal from AbbVie Inc. on Monday were Dow Chemical Co., OneBeacon U.S. Holdings, Inc. and Jones Lang LaSalle Inc.

Dow had the largest offering of the day at $2.5 billion in tranches due 2022 and 2042, a source said. Terms of the offering were unavailable at press time.

Both OneBeacon and Jones Lang LaSalle priced $275 million of 10-year senior notes.

City National Corp. gave terms of its $175 million of perpetual preferred stock shares priced on Monday.

There was also a $75 million sale of $25-par perpetual preferreds from Sun Communities Inc. on Tuesday.

While issuance was somewhat restrained, there are more offerings on tap for Wednesday and Thursday depending on the status of the presidential election results.

"We have things lined up for tomorrow and Thursday if there's a [election] decision and no deadlock." a market source said after the close.

"If there's uncertainty, it could keep people on the sidelines."

Spreads in the investment-grade secondary market were "largely unchanged" as the market continued to see "light volumes" following Hurricane Sandy, a trader said.

"I know the new issue market is hot [...] but things are really quiet in everything else," another trader said.

The trader added that the new deal from AbbVie "tightened quite a bit" on Tuesday.

In other recent deals, Boardwalk Pipeline LP's 3.375% notes due 2023 widened 2 bps, while Interpublic Group of Cos. Inc.'s two-tranche deal firmed during Tuesday's trading.

Monday's $600 million issue of 10-year notes from Invesco Finance plc was unchanged on the day.

Investment-grade bank and brokerage credit default swaps costs were unchanged to tighter on Tuesday.

Bank of America's CDS costs tightened 1 bp to 150 bps bid, 155 bps offered. Citi's CDS costs were also 1 bps tighter at 145 bps bid, 150 bps offered. J.P. Morgan's CDS costs firmed 3 bps to 101 bps bid, 105 bps offered. Wells Fargo's CDS costs tightened 1 bp to 78 bps bid, 82 bps offered.

Merrill Lynch's CDS costs were 2 bps tighter at 149 bps bid, 159 bps offered. Morgan Stanley's CDS costs firmed 2 bps to 208 bps bid, 213 bps offered. Goldman Sachs' CDS costs were unchanged at 176 bps bid, 181 bps offered.

Jones Lang prices tight

Jones Lang LaSalle was in the market with a $275 million sale of 4.4% 10-year senior notes (Baa2/BBB-/) priced to yield Treasuries plus 270 bps, a market source said.

Price talk was whispered in the 300 bps area, with the notes pricing tighter than this and revised guidance in the 280 bps area, the source said.

Active bookrunners were Barclays and J.P. Morgan Securities LLC.

Proceeds are being used for general corporate purposes, but initially to reduce the outstanding borrowings under a credit facility.

The financial and professional services firm for real estate is based in Chicago.

OneBeacon sells 10-years

OneBeacon U.S. Holdings priced $275 million of 4.6% 10-year senior notes (Baa2/BBB-/) to yield Treasuries plus 287.5 bps, according to an FWP with the Securities and Exchange Commission.

The sale is guaranteed by OneBeacon Insurance Group Ltd.

Bookrunners were Barclays, Bank of America Merrill Lynch and HSBC Securities (USA) Inc.

Proceeds are being used, along with cash on hand, to redeem $269.9 million of 5.875% notes due 2013.

The property and casualty insurance holding company is based in Bermuda.

City National preferreds

City National offered further terms of its $175 million of 5.5% series C noncumulative perpetual preferred stock in an FWP with the Securities and Exchange Commission.

The deal priced late Monday.

The shares were seen "hanging" around $24.60 bid, $24.70 offered, a trader said at midday Tuesday. The preferreds will be issued as depositary shares representing a 1/40th interest.

Goldman, Sachs & Co. and JPMorgan Securities LLC were bookrunners.

The Los Angeles-based institution will use proceeds for general corporate purposes, which may include advances to subsidiaries, the repayment of debt and/or the redemption or repurchase of outstanding securities.

Sun Communities' $25 pars

Sun Communities is selling $75 million 7.125% series A cumulative redeemable perpetual preferred shares, according to an FWP filing with the SEC.

Citigroup Global Markets Inc. and Bank of America Merrill lynch were bookrunners.

The Southfield, Mich.-based real estate investment trust will use proceeds from the offering for a planned acquisition of Rudgate Properties, which is expected to close Nov. 15. Any remaining funds will be sued for financing activities, to fund possible future acquisitions of properties and for working capital and general corporate purposes.

Boardwalk Pipeline tightens

Boardwalk Pipelines' $300 million of 3.375% senior notes due 2023 were quoted at 172 basis points bid, 167 bps offered.

The Houston-based natural gas and liquids pipeline and storage company priced the notes on Monday at a spread of Treasuries plus 170 bps.

Interpublic deal firms

Meanwhile, both tranches of Interpublic Group's new deal tightened on the day.

The $300 million tranche of 2.25% five-year notes were seen trading at 160 bps bid, 157 bps offered.

Another trader had seen the notes at 165 bps earlier in the session, following Monday's pricing at a spread of Treasuries plus 160 bps.

The $500 million of 3.75% 10-year notes was quoted 7 bps tighter from levels seen earlier in the day.

The notes traded at 210 bps bid, 207 bps offered. The New York City-based global advertising and marketing company sold the notes at 210 bps over Treasuries.

Invesco trades flat

Invesco Finance's 3.125%10-year senior notes were seen at 145 bps bid, 137 bps offered during the session, a market source said.

The company sold $600 million of the notes at a spread of Treasuries plus 145 bps on Tuesday.

The offering was guaranteed by London-based parent company, investment manager Invesco Ltd.

Stephanie N. Rotondo contributed to this review

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