Oracle, Cytec, ENAP offer bonds, MetLife plans hybrid sale; Cytec up, France Telecom strong

By Andrea Heisinger and Paul Deckelman

New York, June 30 - Software maker Oracle Corp., Cytec Industries Inc. and Chile's Empresa Nacional del Petroleo SA sold bonds on an otherwise uneventful Tuesday in the high-grade bond market.

A sale of hybrid junior subordinated debentures was announced by MetLife Inc.

The winner of the day was Oracle, with heavy investor interest and pricing levels that pleased. The day's other sales priced by early afternoon.

Among the established issues in the secondary arena on Tuesday, a market source said the CDX Series 12 North American high-grade index narrowed by 3 basis points to a mid bid-asked spread level of 132 bps.

Advancing issues - which on Monday had led decliners for a third consecutive session - continued to stay ahead of the decliners on Tuesday, although by only a relatively narrow margin.

Overall market activity, reflected in dollar-volume totals, jumped almost 50% from Monday's levels.

Spreads in general were seen tighter, in line with higher Treasury yields; for instance, the yield on the benchmark 10-year issue rose by 5 bps to 3.53%.

The new Oracle Corp. bonds were seen unchanged to perhaps a tad tighter than the spreads over comparable Treasury issues at which those bonds had originally priced. However, the new Cytec Industries deal pushed upward.

Among recently priced issues, Monday's two-part France Telecom bonds were seen having firmed solidly from their respective issue spreads.

Oracle offers $4.5 billion

Oracle sold $4.5 billion late Tuesday afternoon in three tranches, a source close to the sale said.

The deal was split into $1.5 billion in 3.75% five-year notes priced at Treasuries plus 120 bps, $1.75 billion of 5% 10-year notes priced at 155 bps over Treasuries and $1.25 billion of 6.125% 30-year notes priced at Treasuries plus 185 bps.

Banc of America Securities, Morgan Stanley & Co. Inc. and Wachovia Capital Markets acted as bookrunners for the deal from the software company based in Redwood City, Calif.

Proceeds will go to general corporate purposes and for future acquisitions including the proposed acquisition of Sun Microsystems Inc.

All of the tranches priced "in or around" price talk, the source said. There was never official guidance, only whispered, he said.

The deal was benchmark-sized and had "around $13 billion on the books," the source said, and was "skewed fairly evenly" among the three tranches. There were about 500 investors overall.

"It went great and everyone loved it," he said. "Everyone thought the [pricing] levels were great."

The company had wanted to get between $3 billion and $4 billion done, and topped that, he said.

Cytec prices eight-years

Specialty chemical and materials company Cytec Industries priced $250 million 8.95% eight-year senior notes to yield 9%. They have a spread of Treasuries plus 550.6 bps.

Citigroup Global Markets, Goldman Sachs & Co., RBS Securities and Wachovia Capital Markets ran the books.

Proceeds will be used to purchase for cash any and all notes due 2010 and up to the maximum tender amount of notes due 2013 tendered and accepted for purchase. The remainder will be used for general corporate purposes.

The issuer is based in Woodland Park, N.J.

Minimal deals expected Wednesday

With only two trading days left in the week to price bonds, it's likely that whatever is lurking will get done Wednesday, a source said.

"Yeah, I've heard there may be a couple away, but then Thursday everyone will clear out," he said. "No one will be working."

The market tone was "OK" Tuesday, a source said, adding that it was "good enough to get stuff done."

He pointed to Oracle as the standout issue of the day.

"They are pretty infrequent [bond issuers]," he said. "Plus, I heard they got a good price. It looked good to me, anyway."

ENAP sells 10-year

ENAP sold $300 million of 6.25% 10-year notes at Treasuries plus 287.5 bps, a source said.

Guidance was at 287.5 bps, a source said earlier in the day. The deal was done via Rule 144A and Regulation S.

Bookrunners were BNP Paribas Securities, HSBC Securities and Banco Santander.

The state oil and gas refiner is based in Santiago, Chile.

MetLife to sell hybrid notes

MetLife Inc. is planning a sale of fixed-to-floating-rate junior subordinated debentures due 2069, according to a 424B2 Securities and Exchange Commission filing Tuesday.

J.P. Morgan Securities and Morgan Stanley & Co. Inc. are running the books.

Proceeds will go for general corporate purposes.

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

American Airlines sells pass-throughs

American Airlines Inc. sold $520.11 million of 10.375% class A pass-through certificates on Monday, according to an FWP Securities and Exchange Commission filing Tuesday.

The notes have an initial maturity of July 2, 2019, and a final maturity of Jan. 2, 2021.

The average life is 7.3 years.

Bookrunners were Goldman Sachs & Co. and Morgan Stanley & Co. Inc.

Proceeds will be used to take delivery of new aircraft.

The commercial airline is based in Fort Worth, Texas.

Oracle unchanged

When the new Oracle bonds were freed for secondary dealings, traders did not see much movement in the Redwood Shores, Calif.-based software company's paper, versus the respective pricing levels on its three tranches.

Its $1.5 billion of $3.75% notes due 2014 were seen by a trader at 120 bps bid, 110 bps offered, versus their spread at pricing on Tuesday of 120 bps.

He saw its $1.75 billion of 5% notes due 2019 trading at 152 bps bid, 147 bps offered. That compares to the 155 bps over spread at which that tranche had priced.

And its $1.25 billion of new 6.125% bonds due 2039, which had priced earlier in the session at 185 bps, were seen going home at 182 bps bid, 178 bps offered.

Cytec seen better

Cytec Industries' $250 million of 8.95% senior notes due 2017 were seen by a trader to have moved up to a dollar-price level of 101 bid, 1011/2. Earlier in the session, the West Paterson, N.J.-based specialty chemicals and materials maker's new paper had priced at 99.722.

France Telecom trades tres bien

France Telecom's new two-part offering, which came to market on Monday, was heard to have firmed notably.

The Paris-based internet and mobile phone company's $1.25 billion of 4.375% notes due 2014, which had priced on Monday at 195 bps over, were quoted Tuesday as having firmed to 169 bps bid, 165 bps offered.

Meanwhile, the other $1.25 billion half of that deal - the company's 5.375% notes due 2019 - were seen having firmed to a spread of 175 bps bid, 172 bps offered, in from 195 bps at pricing.

AutoZone bonds show improvement

A trader saw AutoZone Inc.'s $500 million of 5¾% notes due 2015 trading at 315 bps bid, 310 bps offered.

That was in from the 325 bps over level at which the Memphis-based auto parts retailer had priced its deal on Monday.

The company's established 6.95% notes due 2016 meantime were quoted at 263 bps over, in by more than 30 bps on the day.

Financial credits mixed

In the financial sector, there didn't seem to be much of a pattern, according to a market source, who saw Goldman Sachs Group Inc.'s 5.625% notes due 2017 tighten by more than 30 bps on the day to just under the 300 bps level.

On the other hand, Bank of America Corp.'s 4.90% notes due 2013, also trading around the 300 bps area, were seen having widened out about 40 bps to reach that level.

Bank, brokerage CDS tighten up

A trader who watches the credit-default swaps market said that the cost of insuring a holder of bonds from a major bank, or one of the big investment banking names, against a possible event of default, was 5 to 10 bps tighter across the board.

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