Goldman Sachs, Lloyds, Oneok, Total Capital sell in busy primary; Goldman, bank paper firms

By Andrea Heisinger and Cristal Cody

New York, Jan. 21 - Total Capital SA and Total Capital Canada Ltd., Goldman Sachs Group Inc., Lloyds TSB Bank plc and Oneok Partners, LP sold bonds on a busy Friday to end the short week.

Every deal that was priced was more than $1 billion, and all were priced in fairly short order.

"I think there was interest in all of them, and investors snapped them up," a source said. "They were all good-quality paper."

The two funding units of oil company Total SA sold an upsized $2 billion of notes in three parts. A tranche of three-year floating-rate notes was added, increasing the deal size by $750 million.

They were joined in the market by two new bonds from financial names.

Goldman Sachs Group sold $2.5 billion of 30-year senior notes after giving earnings results earlier in the week.

Lloyds TSB Bank tapped the market for $2 billion of three-year floating-rate notes.

A late sale came from Oneok Partners. The natural gas transporter sold $1.3 billion in maturities of five and 30 years. Both priced at the tight end of guidance.

The coming week is expected to have less issuance but still be fairly active in the primary, sources said late in the day.

One syndicate desk predicted between $15 billion and $20 billion of new deals in the coming week, and another said "pushing $20 [billion]."

Trading was quieter on Friday, sources said. Overall investment-grade Trace volume fell 15% to about $13.5 billion, according to a market source.

"Everything's generally in a couple basis points," a trader said. "There really wasn't a ton going on to push things one way or the other. Everyone's just waiting on new issues."

Goldman Sachs' notes firmed more than 10 basis points in secondary trading, and the financial sector was stronger overall on Friday, sources said.

"It's probably 2 to 5 basis points better," a trader said.

Also in secondary trading, Sprint Nextel Corp.'s bonds were wider but have recovered some gains since the end of 2010, sources said.

The Markit CDX Series 14 North American investment-grade index firmed 2 bps on Friday to a spread of 83 bps, a source said.

Treasuries finished up on Friday, sending yields 2 bps to 4 bps lower across the curve. The 10-year benchmark note yield fell 4 bps to 3.41%. The yield on the 30-year bond dropped 4 bps to 4.57%.

Early in the day, the New York Federal Reserve purchased $8.36 billion of Treasuries due 2018 through 2020 as part of the $600 billion quantitative easing program expected to run through the second quarter. The Federal Reserve plans to buy $7 billion to $9 billion of Treasuries on Monday.

Traders were looking to the upcoming week's auctions of $99 billion of debt. The Treasury Department will sell $35 billion of two-year notes on Tuesday, $35 billion of five-year notes on Wednesday and $29 billion of seven-year notes on Thursday.

Total Capital upsizes

Total Capital and Total Capital Canada sold an upsized $2 billion of notes (Aa1/AA/AA) in three tranches, an informed source said.

The deal size was increased from $1.25 billion in two parts. A $750 million tranche of three-year floating-rate notes was added on reverse inquiry, the source said.

Total Capital Canada was the issuer of both tranches with three-year maturities. Total Capital was the issuer of the 10-year notes.

The $750 million of 1.625% three-year notes priced at a spread of Treasuries plus 65 bps.

A $500 million tranche of 4.125% 10-year notes sold at a spread of 80 bps over Treasuries.

The $750 million of three-year floaters sold at par to yield Libor plus 38 bps.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Inc. were active bookrunners.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by parent oil company Total, which is based in Courbevoie, France.

Oneok sells $1.3 billion

Oneok Partners sold $1.3 billion of senior notes (Baa2/BBB) in two tranches late in the day, a source who worked on the deal said.

A $650 million tranche of 3.25% five-year notes sold at Treasuries plus 125 bps. Price talk was in the 130 bps area, with the notes coming in at the tight end of that.

The second part was $650 million of 6.125% 30-year bonds priced at a spread of 160 bps over Treasuries. The notes priced in line with talk in the low 160 bps.

Each tranche was more than two times oversubscribed with about $1.6 billion on the books for each.

Bookrunners were Citigroup Global Markets Inc., RBS Securities Inc. and UBS Securities LLC.

Proceeds are being used to repay amounts outstanding under a $1 billion commercial paper program, to repay amounts at maturity of $225 million senior notes due March 2011 and for general partnership purposes.

The sale is guaranteed by Oneok Partners Intermediate LP.

The natural gas transportation, gathering and processing company is based in Tulsa, Okla.

Goldman prices long bond

Goldman Sachs Group sold $2.5 billion of 6.25% 30-year senior notes (A1/A/A+) at a spread of 170 bps over Treasuries, a source away from the deal said.

Bookrunner was Goldman Sachs & Co.

In the secondary market, Goldman's notes were quoted at 158 bps bid, 155 bps offer, a trader said.

In the late afternoon, a trader on another desk saw an offer of 154 bps.

The financial services company and investment bank is based in New York.

Lloyds prices

Lloyds TSB Bank priced $2 billion of three-year floating-rate notes (Aa3/A+/AA-) at par to yield Libor plus 235 bps, according to an FWP filing with the Securities and Exchange Commission.

They sold in line with guidance in the Libor plus 235 bps area.

Bank of America Merrill Lynch, Barclays Capital Inc. and Goldman Sachs were bookrunners.

The retail bank is based in London and Edinburgh.

Sprint weaker

Sprint Nextel's debt widened in secondary trading, but it has performed better since late 2010, sources said Friday.

"Sprint paper was actually weaker on the day - it's down about a quarter to a half," a trader said.

Overland Park, Kan.-based Sprint's 8.5% bonds due 2032 were quoted trading at 104.0,104.5 on Friday, compared with a quote of 101.5, 102.5 on Nov. 15.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.