Bank of NY Mellon, Eksportfinans price; coming week seen busy; secondary quiets on slim supply

By Andrea Heisinger

New York, Nov. 6 - The week ended Friday nearly as quietly as it began with little in the way of new investment-grade bond issues. Bank of New York Mellon Corp. and Eksportfinans ASA were the only entrants into the primary.

The deal from Bank of New York Mellon totaled $1.25 billion. It was divided into a $750 million tranche of five-year notes and a $500 million tranche of 10-year notes.

Syndicate sources said that no new issues were really expected during the week, and other factors may have fed into companies holding out until the coming week to issue debt.

There were unemployment numbers released for October on Friday, which didn't help encourage anyone to sell bonds. It was announced that the U.S. unemployment rate had increased to 10.2%, up from below 10% in September.

The secondary market was focused on the crop of new deals that came in the past few days.

There was "not much trading" of any of the recent issues, a trader said.

The Bank of New York deal sold late and was not seen trading shortly before the market close, he said.

Spreads were slightly wider as Treasury yields moved tighter by late afternoon. The five-year note was 3 basis points better than the day before at a yield of 2.3%, while the 30-year bond remained even at a 4.4% yield.

Bank of NY sells two tranches

Financial services company Bank of New York Mellon priced $1.25 billion of notes in two tranches late in the day.

A $750 million tranche of 3.1% five-year notes priced at 83 bps over Treasuries.

A $500 million tranche of 4.6% 10-year notes priced at Treasuries plus 112 bps.

Barclays Capital Inc. and Deutsche Bank Securities Inc. ran the books for the New York City-based issuer.

Eksportfinans sells floaters

Norway's export credit agency, Eksportfinans, sold $100 million of floating-rate notes due 2011 at par to yield three-month Libor plus 15 bps, according to an FWP filing with the Securities and Exchange Commission.

RBS Securities Inc. was agent for the deal.

Coming week seen busy

Friday marked a quiet end to the week, with little activity other than one new deal.

A market source called the day "quiet on the new issues, quiet in the secondary," and added that "it was quiet all over, really."

"Monday should be busy," another market source said.

Issuers are expected to take advantage of a mid-week break due to a Veterans Day holiday on the coming Wednesday and issue mostly in the top half of the week.

"Next week is a weird one," a syndicate source said. "We're busy on Monday and Tuesday, but then there's that break. I think a lot [of issues] are going to come early."

The following week is also expected to have steady issuance as companies get in prior to the Thanksgiving holiday.

"We're pretty stacked for the next couple weeks," a syndicate source said.

CVS, Petrobras bonds eyed

Bonds from CVS Caremark Corp. and Petrobras International Finance were among those trading at high volume by early afternoon.

The CVS 6.125% bond due 2039 has been trading strongly in previous days, among others.

The pharmacy chain was in the news after disclosing its business practices were being investigated by the Federal Trade Commission. This stems from questions over the $27 billion merger between CVS and Caremark.

Two recently priced Petrobras bonds have remained popular with investors, including the 6.875% note due 2040 that was behind the CVS issue in volume on Friday.

Both that and the other tranche, due 2020, have been popular with investors since pricing two weeks ago.

Bank, broker CDS mixed

Credit-default swaps for bank and brokerage names were each anywhere from unchanged to 5 bps wider, a trader said late in the day.

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