Hewlett-Packard, AmEx Credit among names in continued flood of bonds; Dell weaker in trading

By Andrea Heisinger and Cristal Cody

New York, Sept. 8 - Hewlett-Packard Co., American Express Credit Corp., Unum Group, Province of Ontario, Eksportfinans ASA, Goodrich Corp., City National Corp., Pacific Gas & Electric Co., Enbridge Energy Partners, LP, Teck Resources Ltd., Total Capital SA, US Bancorp, Oncor Electric Delivery LLC and the Republic of Italy all sold bonds on a Wednesday in the high-grade market that saw issuance of nearly $15 billion.

There was about $14.925 billion in bonds priced, including sovereigns. This tops the previous day's total of nearly $13 billion.

Aerospace and defense company Goodrich sold an upsized $600 million of notes due 2021 at the tight end of guidance.

Hewlett-Packard priced a $3 billion deal in three tranches, making it the largest of the day. The tranches consisted of floaters and fixed-rate notes, all of which mature in five years or less.

New York City-based American Express Credit doubled the size of its deal to $2 billion in five-year notes.

Ontario was one of the first to price, bringing a $1.25 billion deal of five-year global notes. Eksportfinans also priced $1.25 billion in five-year global notes.

City National priced its $300 million deal of 10-year notes without upsizing, which many of the day's other corporates did. Another bank, US Bancorp, sold $1 billion of three-year notes late in the afternoon.

Another in the financial sector, Unum Group, sold an upsized $400 million of 10-year notes. The size was increased by $100 million.

San Francisco-based Pacific Gas & Electric priced an upsized $550 million deal of 10-year notes. The size was increased from $400 million.

Enbridge Energy priced its $300 million deal of 30-year bonds at the same size it was announced at.

Mining company Teck Resources sold its $700 million deal in two tranches. One tranche was a reopening of 30-year notes priced in August.

Oil giant Total Capital announced and priced its $1 billion deal of notes due 2016 late in the day. They priced at the wide end of guidance.

Italy sold a $2 billion deal of three-year notes, adding to the slate of sovereign names coming to the U.S. bond market.

On the upcoming deals calendar is Nabors Industries Inc., which is expected to price $500 million in 10-year notes under Rule 144A on Thursday.

Overall investment-grade Trace volume jumped about 30% to more than $11 billion, a source said.

Secondary spreads performed well under the heavy load of new deals, a trader said.

The Markit CDX Series 14 North American investment-grade index eased 1 bp to a spread of 105 bps, according to Markit Group Ltd.

"At some point, I would imagine there would be some widening, but there's been plenty of cash to absorb these deals," the trader said.

While the short term notes Dell Inc. sold on Tuesday performed well in secondary trading, the company's longer bonds widened on Wednesday, a source said.

The onslaught in new corporate bonds over the past two days played a part in a drag on Treasuries, according to sources.

The yield on the benchmark 10-year note rose 6 bps to 2.65%. The yield on the 30-year bond jumped 7 bps to 3.73%.

"There has definitely been hedging of those deals going on in the Treasury market," said Mary Ann Hurley, a fixed income trader for D.A. Davidson & Co. "Corporates are being helped by that. Treasuries were a little bit hurt by that and we continue to monitor the situation over in Europe with the sovereign debt."

The jump in corporate issuance is unlikely to impact Treasuries for long with a coming slowdown expected in October, she said.

"We're coming to the fiscal year end for many companies, so that's going to prohibit a lot of companies from taking some debt down," she said.

AmEx unit's upsized $2 billion

American Express Credit sold an upsized $2 billion of 2.75% five-year senior notes (A2/BBB+/A+) by mid-afternoon to yield Treasuries plus 143 bps, a source who worked on the trade said.

The size was announced in the morning at $1 billion, but was upsized at the launch in the afternoon. The notes priced in line with talk in the 143 bps area.

Bookrunners were Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs & Co. Inc. and RBS Securities.

In secondary trading, the notes tightened to 144 bps bid, 141 bps offered, a trader said.

The subsidiary of financial services provider American Express Co. is based in New York City.

Hewlett-Packard's three tranches

Hewlett-Packard sold $3 billion of global senior notes (A2/A/A) in three tranches a day after competitor Dell priced $1.5 billion, a syndicate source confirmed.

An $800 million tranche of two-year floating-rate notes priced at par to yield three-month Libor plus 12.5 bps. This was at the tight end of guidance in the Libor plus 15 bps area.

A $1.1 billion tranche of three-year notes priced at a spread of Treasuries plus 50 bps. They priced in line with talk in the 50 bps area.

The third tranche was $1.1 billion of five-year notes priced at a 70 bps over Treasuries spread. This was also in line with talk in the 70 bps area.

Full terms were not available at press time.

Citigroup Global Markets, Barclays Capital Inc. and J.P. Morgan Securities were bookrunners.

Proceeds are being used for general corporate purposes including commercial paper repayment and acquisitions.

The notes firmed 5 bps immediately on release to the secondary market, a source said. Later in the day, the notes were seen trading at 68 bps bid, 65 bps offered, a trader said.

The computer products and technology company is based in Palo Alto, Calif.

Bond onslaught continues

The high-grade bond market was hit with a wave of new deals for the second day in a row as companies tried to get deals priced ahead of the Rosh Hashanah holiday and to take advantage of stable market conditions.

"It was absolutely insane," a source said at the end of the day of the number of new deals pricing.

"It should slow down [tomorrow]," he said. "I don't know how much more volume the market can support."

Another syndicate source reported that several deals at his desk and away were oversubscribed.

"That's why a lot [of the deals] were upsized," he said. "We just had so much demand."

The pace is expected to slow on Thursday to let the secondary market absorb the new paper and also to take a step back and look at how some of the bonds are performing.

Hewlett-Packard was one of the marquee sales of the day, and the three- and five-year notes priced a little better than the same maturities that Dell Inc. priced on Tuesday. Both of the Hewlett-Packard bonds priced at levels 20 bps narrower.

Goodrich prices tight

Goodrich sold an upsized $600 million of 3.6% notes due 2021 (Baa2/BBB+/BBB+) at 100 bps over Treasuries, a source who worked on the deal said.

The size was increased from $500 million, and the deal priced at the tight end of guidance in the range of 100 to 105 bps.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets, UBS Investment Bank and Wells Fargo Securities LLC.

Proceeds will be used to fund the retirement of $257.46 million in outstanding 7.625% notes due 2012, to fund contributions to defined benefit pension plans in the United States, United Kingdom and/or Canada and for other general corporate purposes.

In secondary trading, the notes tightened to 99 bps bid, 96 bps offered, according to a trader.

The aerospace and defense industries systems company is based in Charlotte, N.C.

PG&E sells $550 million

Pacific Gas & Electric sold an upsized $550 million of 3.5% 10-year senior unsecured notes (A3/BBB+) to yield 90 bps over Treasuries, an informed source said.

The size was initially $400 million, with the extra $150 million added due to demand.

"People are on the hunt for paper - especially 10-years," the informed source said.

BNP Paribas Securities, Goldman Sachs & Co. Inc. and J.P. Morgan Securities were bookrunners.

Proceeds are going to repay a portion of outstanding commercial paper.

The notes firmed in secondary trading to 88 bps bid, 84 bps offered, according to a trader.

The electric and natural gas utility is based in San Francisco.

Total prices wide

France's Total Capital sold a benchmark $1 billion of 2.3% global notes due 2016 late in the day at Treasuries plus 90 bps, a syndicate source said.

Guidance was in the 87.5 bps area, a source said, with the notes pricing on the wide end of that.

The notes (Aa1/AA) are guaranteed by Total SA.

Bookrunners were BNP Paribas Securities, Deutsche Bank Securities and Morgan Stanley & Co. Inc.

Proceeds are going for general corporate purposes.

In the secondary market, the notes firmed to 80 bps bid, 75 bps offered, a source said.

The oil and gas company is based in Courbevoie, France.

US Bancorp sells bonds late

US Bancorp sold a benchmark $1 billion deal of 1.375% three-year notes (Aa3/A+/AA-) at Treasuries plus 65 bps, a syndicate source said late in the day.

Bookrunners were Credit Suisse Securities and Deutsche Bank Securities.

In late afternoon secondary trading, the notes were quoted at 65 bps bid, 61 bps offered, a source said.

The financial services company is based in Minneapolis.

Teck offers two tranches

Teck Resources sold $700 million of senior unsecured notes (Baa3/BBB) in two tranches, a source who worked on the deal said.

A $500 million tranche of 4.5% notes due 2021 priced at Treasuries plus 185 bps.

The second tranche was a reopening of 6% notes due 2040 to add $200 million. They priced at a spread of Treasuries plus 215 bps.

This brings total issuance for the notes due 2040 to $650 million, including $450 million issued on Aug. 17 at 198 bps over Treasuries.

Both tranches have make-whole calls at Treasuries plus 30 bps. The deal is guaranteed by Teck Metals Ltd.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets, Goldman Sachs & Co. Inc. and J.P. Morgan Securities.

Both tranches firmed in the secondary market, a source said.

The notes due 2021 firmed to 183 bps bid, 178 bps offered. The bonds due 2040 tightened to 212 bps bid, 208 bps offered.

The mining and metals company is based in Vancouver, B.C.

Unum upsizes 10-year

Unum Group priced its upsized $400 million sale of 5.625% 10-year senior unsecured notes (Baa3/BBB-) late in the day at 300 bps over Treasuries, a market source away from the deal said.

The size was increased from $300 million.

Morgan Stanley & Co. Inc. and UBS Investment Bank ran the books.

Proceeds are being used to repay senior notes due March, 2011, and for other general corporate purposes.

The notes were stronger in the secondary, firming to 290 bps bid, 280 bps offered, a trader said.

The employee benefits provider is based in Chattanooga, Tenn.

Enbridge prices long bonds

Enbridge Energy Partners sold $400 million of 5.5% 30-year senior unsecured notes (Baa2/BBB) at Treasuries plus 180 bps, a syndicate source away from the sale said.

RBS Securities, Deutsche Bank Securities, HSBC Securities and RBC Capital Markets were bookrunners.

Proceeds are going to fund a portion of the purchase price of the pending acquisition of entities comprising the Elk City Gathering & Processing System, including repayment of short-term debt for such purpose.

The bonds were slightly tighter in secondary trading and were last quoted at 179 bps bid, 178 bps offered, a trader said.

The crude oil and liquid petroleum transportation and storage company is based in Houston.

City National's 10-year notes

City National priced its $300 million deal of 5.25% 10-year senior unsecured notes (A1/BBB+) at Treasuries plus 262.5 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunner was J.P. Morgan Securities.

Proceeds are going to redeem $250 million of 9.625% cumulative trust preferred shares issued by City National Capital Trust I on Dec. 8, 2009, with the remainder to be used for general corporate purposes.

The bank and financial holding company for City National Bank is based in Los Angeles.

Oncor offers $475 million

Dallas-based utility Oncor Electric Delivery sold $475 million of 5.25% 30-year senior secured bonds (Baa1/A-) at 158 bps over Treasuries, a source close to the sale said.

The deal was sold under Rule 144A and Regulation S.

Bookrunners were Barclays Capital and Citigroup Global Markets, with Credit Suisse Securities as passive.

The electric utility is based in Dallas.

Ontario sells global notes

Ontario priced $1.25 billion of 1.875% five-year global notes (Aa1/AA-) by early afternoon at 44.7 bps over Treasuries or mid-swaps plus 25 bps, according to an FWP filing with the Securities and Exchange Commission.

Underwriters were Bank of America Merrill Lynch, Credit Suisse Securities, HSBC Securities, Scotia Capital USA Inc., Bank of Montreal, London branch, CIBC World Markets Corp., National Bank Financial Inc., RBC Capital Markets and TD Securities USA LLC.

Proceeds are going for general corporate purposes.

The issuer is based in Toronto.

Eksportfinans offers $1.25 billion

Norway's Eksportfinans priced $1.25 billion of 2% five-year global notes (Aa1/AA/AA) at Treasuries plus 61 bps, or mid-swaps plus 42 bps, according to an FWP filing with the Securities and Exchange Commission.

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

The issuer provides financial services to the country's export and municipal sectors and is based in Oslo.

Italy sells $2 billion

The Republic of Italy priced $2 billion 2.125% three-year notes to yield Treasuries plus 120 bps, according to an FWP filing with the Securities and Exchange Commission.

Deutsche Bank Securities, Goldman Sachs & Co. Inc. and Morgan Stanley & Co. Inc. were bookrunners.

Nabors plans private sale

Nabors Industries announced a $500 million offering of 10-year senior unsecured notes on Wednesday, according to a press release and market source.

The notes (Baa2/BBB+) are expected to price on Thursday morning, the source said.

They are being sold under Rule 144A and Regulation S and are guaranteed by Nabors Industries Ltd.

Proceeds will be used to fund the $900 million acquisition of Superior Well Services, Inc. and for general corporate purposes.

The land drilling and well servicing rigs operator is based in Hamilton, Bermuda.

Dell bonds widen

Dell's three tranches of debt sold on Tuesday were mixed in secondary trading, with the longer bonds wider on the day, a source said.

Dell priced $1.5 billion of unsecured notes (A2/A-) in three tranches, including 1.4% notes due 2013 at a spread of Treasuries plus 70 bps; 2.3% notes due 2015 at a spread of 90 bps over Treasuries; and 5.4% bonds due 2040 at Treasuries plus 175 bps.

The notes due 2013 firmed in the secondary on Wednesday to 65 bps bid, 60 bps offered, the source said.

The other two tranches were wider. The notes due 2015 were seen weaker on the bid side at 92 bps bid, 87 bps offered.

The bonds due 2040 moved out to 182 bps bid, 177 bps offered.

The technology and IT company is based in Round Rock, Texas.

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