National Australia Bank, MidAmerican Energy, Tampa Electric offer bonds; spreads steady

By Andrea Heisinger and Paul Deckelman

New York, July 1 - New offerings continued to come into the high-grade market Wednesday, with sales by National Australia Bank, MidAmerican Energy Holdings Co. and Tampa Electric Co.

All of the deals were priced by early afternoon, and a couple of hours later desks were already shutting down.

"It's pretty dead around here," a source said, despite the fact that there's technically one more day of trading left Thursday before a long Fourth of July weekend.

"That's pretty much a myth," he said. "Nobody's really going to do anything tomorrow."

Terms were announced Wednesday for an issue of hybrid subordinated notes from MetLife Inc. that priced a day earlier.

Among the established issues in the secondary arena on Wednesday, a market source said the CDX Series 12 North American high-grade index narrowed by 1 basis point to a mid bid-asked spread level of 131 bps.

Advancing issues - which on Tuesday had led decliners for a fourth consecutive session - continued to stay ahead of the decliners on Wednesday, by a better than eight-to-seven margin.

Overall market activity, reflected in dollar-volume totals, fell almost 20% from Tuesday's levels.

Spreads in general were seen little changed, in line with steady Treasury yields; for instance, the yield on the benchmark 10-year issue was unchanged Wednesday at 3.53%.

National Australia sells two tranches

National Australia Bank priced $2.75 billion of notes in two tranches via Rule 144A and with the guarantee of the Australian government.

The $1.75 billion of five-year floating-rate notes priced at par to yield three-month Libor plus 50 bps.

A $1 billion tranche of 3.375% five-year notes priced at a spread of Treasuries plus 92.4 bps.

Bookrunners were Deutsche Bank Securities, Goldman Sachs & Co. and HSBC Securities.

The international financial services group is based in Melbourne, Australia.

Tampa Electric reopens bond

TECO Energy Inc. subsidiary Tampa Electric reopened its issue of 6.1% notes due 2018 to add $100 million. They priced at Treasuries plus 210 bps.

The total size is now $250 million including $150 million issued May 16, 2008.

Bookrunners were J.P. Morgan Securities and SunTrust Robinson Humphrey.

The Tampa, Fla., electric company will use proceeds to repay short-term debt and for general corporate purposes.

New deals wind down

The high-grade market was having a "catch up day," a syndicate source said, adding that "it was pretty slow out there."

A few desks handled the day's deals, and those offerings that did price were mostly small and done quickly.

"It was pretty unchanged today," a source said of the tone. "There was not really much to look at."

A syndicate source - when asked in late afternoon how the market looked - said "well, everyone's shutting down for the weekend."

The consensus was that there would be nothing consequential pricing Thursday, and that it was essentially a half day.

"I haven't heard of anything away," a source said. "We don't have anything. I think a lot [of people] are already on vacation."

MidAmerican sells deal privately

MidAmerican Energy Holdings priced $250 million 3.15% three-year notes at Treasuries plus 160 bps, a market source said.

Full terms for the deal were not available at press time.

It was priced via Rule 144A.

J.P. Morgan Securities was tapped as bookrunner by the diversified energy producer based in Des Moines, Iowa.

MetLife sells hybrids

MetLife sold $500 million 10.75% 60-year of fixed-to-floating-rate junior subordinated debentures late Tuesday.

They priced to yield 10.75% with a spread of Treasuries plus 640.8 bps.

The notes are callable on or after Aug. 1, 2034 at their principal amount plus accrued interest. If the notes are not called on or before Aug. 1, 2039, the coupon will change to a floating rate of three-month Libor plus 754.8 bps.

J.P. Morgan Securities and Morgan Stanley & Co. Inc. were bookrunners.

Proceeds will go for general corporate purposes.

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

Oracle firms slightly

A trader saw Oracle Corp.'s bonds, which had priced on Tuesday in a three-part mega-deal, firming a little from the levels which the Redwood Shores, Calif.-based software company's paper had held on Tuesday.

Its $1.5 billion of $3.75% notes due 2014 were seen by a trader at 110 bps bid, 105 bps offered. That was tighter than the 120 bps bid, 110 bps offered seen in Tuesday's secondary, as well as their spread at pricing of 120 bps.

He saw its $1.75 billion of 5% notes due 2019 trading at 153 bps bid, 148 bps offered, essentially unchanged on the day. 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 at 185 bps, were seen going home at 177 bps bid, 172 bps offered, in from Tuesday's levels at 182 bps bid, 178 bps offered.

Cytec edges up

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 101.25 bid, 101.75 offered, up ¼ point from initial aftermarket dealings on Tuesday. Earlier that session, the West Paterson, N.J.-based specialty chemicals and materials maker's new paper had priced at 99.722.

Financials seen firm

A trader said that the financial sector, meanwhile, "had a really good tone to start the day, and it looked like we carried that through. I don't think we got too much tighter as the day progressed, but we definitely had a good bid, and a good tone in the market going forward."

He saw MetLife Inc.'s 10.75% fixed-to-floating-rate-junior subordinated debentures due 2069 trading at 98.5 bid, 99.5 offered - down from the 99.981 level at which the New York-based insurer had priced those bonds earlier in the session.

Also among the financials, Citigroup Inc.'s bonds were seen among the most busily traded. A market source saw its 5.30% notes due 2012 having tightened by 30 bps to the 465 bps over level.

General Electric Capital Corp. was seen as something of a mixed bag, with the Fairfield, Conn.-based lending arm of industrial giant GE's 5.625% notes due 2018 some 30 bps tighter, at 245 bps over. But its 5.45% notes due 2013 widened about 20 bps to the 195 bps level.

Bank, brokerage CDS tighten up

A trader who watches the credit-default swaps market said that for a second straight day, 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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