PacifiCorp prices, adds to month totaling about $101 billion to beat out busy August

By Andrea Heisinger

Omaha, Sept. 28 - PacifiCorp closed out the week with a $600 million issue that added to more than $24.5 billion in new issues for the week.

This ended a strong September with about $101 billion in new issues, topping the surge in August that saw close to $90 billion, a record for that month.

"Everyone was kind of waiting on the Fed this month," a market source said of the wait on whether the Fed would announce a rate cut. The cut was made at 50 basis points.

"There probably would have been more [issues] if it weren't for that."

PacifiCorp's issue of notes priced at Treasuries plus 140 basis points. Bookrunners were J.P. Morgan Chase & Co., Lehman Brothers Inc. and RBS Greenwich Capital.

Full terms were not available at press time.

Stability encourages financials

Among this week's larger issuers were Goldman Sachs Group Inc. with $2.5 billion in 30-year subordinated notes, Bear Stearns Cos. Inc. with $2.5 billion in 10-year notes, The Royal Bank of Scotland plc with $3.1 billion in preferreds, JPMorgan Chase & Co. with $1.25 billion in five-year notes and ING Groep NV with $1.5 billion in perpetual hybrids.

Mortgage lenders Fannie Mae and Freddie Mac sold preferred stock. It was the first issue of this kind in three years for Freddie Mac.

It was a week of financials getting into the market, taking advantage of stability and other factors.

"They're all just trying to get in because they know spreads are going to go wider," a source said.

Friday was "very stable," a source said, and that should carry over into next week.

"The Treasury backed off a little today, but then it rallied," he said.

There is still a backlog of new issues from before the Fed rate cut and going back to less stable times before September.

October seen slower

Predictions are that October will have slightly less in new issues than September.

"I'm guessing about $80 billion," a source said.

Another source said that sounded about right because of a blackout of banks issuing in the first part of the month.

"There's all of this backlog and that blackout, and I think you're going to see a slew of issues from them the second half of the month," he said.

One of the most surprising issues and performers for September was AstraZeneca plc with its issue of $6.9 billion of notes in four tranches. It priced the first week of the month when market conditions were still shaky, and not only upsized the offering but subsequently priced an issue in euros.

"October could be pretty active, but probably not quite as active as September," a source said.

The secondary market was quiet Friday, sources said.

Bear Stearns' issue of 6.4% 10-year notes that priced Thursday at Treasuries plus 190 basis points was trading at about that Friday afternoon after going out to 195 bps earlier, a source said.

Other issues were trading both tighter and wider.

Sprint Capital's 8.375% five-year notes were five bps wider than the Treasuries plus 160 bps they priced at while Verizon Communications 6.25% 30-year notes were one bps tighter than Treasuries plus 135 bps where they priced.

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