BP Capital, Bunge, Ensco, Best Buy, ING sell at attractive yields; Sprint bonds stronger

By Andrea Heisinger and Cristal Cody

New York, March 8 - BP Capital Markets plc, Bunge Limited Finance Corp., Ensco plc, Best Buy Co., Inc. and ING Bank NV sold high-grade bonds on Tuesday in a packed primary.

Most of the deals were multi-billion dollars in size and in multiple tranches.

BP Capital Markets had the largest sale of the day at $3.5 billion in three parts. A tranche of three-year floating-rate notes was added at the launch, and the other two tranches with maturities of 2016 and 2021 sold in line with talk. The sale was oversubscribed with about $5 billion initially on the books.

London-based Ensco sold $2.5 billion of notes with maturities of 2016 and 2021. Both sold at the tight end of guidance, and the sale was largely oversubscribed.

Bunge upsized its sale to $500 million from $400 million of five-year notes. The debt is guaranteed by parent company Bunge Ltd.

Electronics and entertainment retailer Best Buy priced $1 billion in two parts. There were maturities of 2016 and 2021 with more interest in the 10-year notes, a source said.

There was also a $3.25 billion sale of notes due 2016 and 2021 late in the day from ING Bank. It was priced in the Rule 144A market.

Overall investment-grade Trace volume climbed more than 25% to about $14.5 billion, a source said.

In the secondary market, the new debt from BP Capital Markets and Best Buy was slightly firmer, while Bunge's notes firmed 5 basis points in trading, according to sources.

"All in all, it was a mixed bag," a trader said.

Sprint Nextel Corp.'s bonds due 2032 rose 4.5 points to 108.25, 109 on the news it may buy competitor T-Mobile USA, the trader said.

The Markit CDX Series 14 North American investment-grade index was flat a second day at a spread of 84 bps, according to Markit Group Ltd.

Treasuries slipped on Tuesday after a well-bid auction for three-year debt. The 10-year note yield rose 4 bps to 3.55%, and the 30-year bond yield closed at 4.66% from 4.62%.

Primary lives up to hype

At the end of Monday, syndicate desks were predicting a big day of issuance for Tuesday and it did not disappoint.

There was about $10.75 billion of new high-grade paper priced by the end of the day. All of the deals but one were $1 billion or more in size.

"It was packed out there," a syndicate source said. "This has to be one of the busiest days [of the year]."

Investors grabbed for the new paper as yields continue to be attractive, a market source said. It wasn't only the well-known names that were oversubscribed, but also lesser-known Ensco.

"It's one of those times when anything is going to be over[subscribed]," the source said.

There are more sales expected for Wednesday as desks reported that the upbeat tone is bringing sellers to the debt market that may have been on the fence in the past couple of rockier weeks.

"We have two or three things possible," the syndicate source said.

BP heavily oversubscribed

BP Capital Markets priced $3.5 billion in an upsized three parts by late afternoon, an informed source said.

The $1.6 billion of 3.2% five-year notes sold at a spread of 100 bps over Treasuries. The notes were priced wide of whispered guidance in the 95 bps area, but in line with revised talk in the 100 bps area.

A $1.4 billion tranche of 4.742% 10-year notes priced at Treasuries plus 120 bps. The tranche sold in line with talk in the 120 bps area.

The added tranche was $500 million of three-year floating-rate notes priced at par to yield Libor plus 60 bps.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Inc. and RBS Securities Inc. were bookrunners.

BP Capital's notes due 2016 were seen in the gray market at 97 bps bid, 92 bps offered, a trader said.

Later in the afternoon, in the secondary market, another trader saw the notes at 99 bps bid, 95 bps offered.

The notes due 2021 were slightly better at 119 bps bid, 116 bps offered.

The issuing arm of the oil company is based in Middlesex, United Kingdom.

Ensco prices two tranches

Offshore contract drilling company Ensco priced $2.5 billion of senior notes (Baa1/BBB+) in two parts late in the day, an informed source said.

Pricing was about 5 p.m. ET, a source said. There was "north of $7.5 billion" on the books, the source said. This was partly due to a "bunch of different accounts going" and the fact that some investors were unfamiliar with the name and had to look over the deal information.

The $1 billion of 3.25% five-year notes sold at 120 bps over Treasuries. The notes were sold at the tight end of talk in the 125 bps area plus or minus 5 bps.

A second part was $1.5 billion of 4.7% 10-year notes priced at a spread of Treasuries plus 140 bps. The notes sold at the tight end of guidance in the 145 bps area, plus or minus 5 bps.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used to finance a portion of the cash consideration for a merger with Pride International Inc. There is a mandatory redemption provision if the merger is not completed by Feb. 3, 2012.

The issuer is based in London.

Best Buy sells $1 billion

Best Buy sold $1 billion of senior notes (Baa2/BBB-/BBB+) in two tranches late in the day, according to a source away from the deal.

The $350 million of 3.75% five-year notes priced at a spread of Treasuries plus 162.5 bps.

A second $650 million tranche of 5.5% 10-year notes sold at 200 bps over Treasuries.

Bookrunners were Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and UBS Securities LLC.

Proceeds are being used for general corporate purposes.

In the secondary market, the notes due 2016 were seen trading at 162 bps bid, 157 bps offered, and the tranche of notes due 2021 firmed to 198 bps bid, 193 bps offered, a trader said.

The electronics and entertainment retailer is based in Richfield, Minn.

Bunge upsizes five-years

Bunge Limited Finance priced an upsized $500 million of 4.1% five-year senior notes (Baa2/BBB-/BBB) to yield Treasuries plus 190 bps, said a source close to the sale.

The size was increased from $400 million, a source said.

Bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBS Securities Inc.

Proceeds are being used for general corporate purposes including working capital.

The notes firmed in the secondary market to 185 bps bid, 183 bps offered, a trader said.

The sale is guaranteed by agribusiness and food company Bunge Ltd., based in White Plains, N.Y.

ING prices late

ING Bank priced $3.25 billion of notes (Aa3/A+/A+) in two parts late in the day under Rule 144A, an informed source said.

The $2 billion of two-year floating-rate notes priced at par to yield three-month Libor plus 105 bps.

A $1.25 billion tranche of 4% five-year notes sold at a spread of Treasuries plus 180 bps.

Bookrunners were Barclays Capital Inc., Goldman Sachs & Co., ING Securities and RBC Capital Markets Corp.

Proceeds are being used for general corporate purposes.

The retail bank is based in Amsterdam.

EIB, KfW plan sovereign debt

Germany's KfW is planning a sale of three-year notes (Aaa/AAA), according to a market source.

The deal is expected to price on Wednesday via bookrunner HSBC Securities.

The government-owned development bank is based in Frankfurt.

Also expected to sell on Wednesday is a sale of five-year notes from the European Investment Bank.

The notes (Aaa/AAA/AAA) are expected to price after going overnight to allow Europe and Asia on the books.

Bookrunners are Goldman Sachs & Co., Morgan Stanley & Co., Inc. and UBS Securities LLC.

The funding arm of the European Union is based in Kirchberg, Luxembourg.

Pebblebrook's preferreds

Pebblebrook Hotel Trust priced $125 million, or 5 million shares, of 7.875% perpetual series A cumulative preferred stock (unrated) early in the day at par of $25, according to an FWP filing with the Securities and Exchange Commission.

The securities sold at the tight end of talk given late Monday at 7.875% to 8%.

Wells Fargo Securities LLC was active bookrunner.

Proceeds are being contributed to the operating partnership to invest in hotel properties and used for general business purposes.

The hotel investment company is based in Bethesda, Maryland.

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