Simon Property, Empire District Electric, Northwest Natural Gas price; Pfizer bonds popular

By Andrea Heisinger

New York, March 20 - A day that at first appeared barren of new high-grade bond deals ended with a handful from Simon Property Group LP, Empire District Electric Co. and Northwest Natural Gas Co.

The slowdown after a swell of issues gave the market a breather, a source said.

In the secondary market, Pfizer Inc. had two of the most-traded bonds of the day, which were part of its $13.5 billion issue earlier in the week.

A two-tranche sale from United Parcel Service, Inc. was mixed in trading, while notes from Barrick Gold Corp. and Kansas City Power & Light Co. held or continued gains.

Spreads were generally tighter by the market close Friday as Treasury yields were slightly wider. The 30-year bond was out 4 basis points to yield 3.66%.

Simon Property sells 10-year

Simon Property Group priced an upsized $650 million of 10.35% 10-year senior notes to yield 10.75%, or Treasuries plus 812.8 bps.

The size was announced at $500 million in a press release Thursday.

The retail real estate property company, based in Indianapolis, is using proceeds to partially repay existing debt.

Banc of America Securities LLC, Goldman Sachs & Co. and J.P. Morgan Securities Inc. were the bookrunners.

Utilities sell small deals

Utilities Empire District Electric and Northwest Natural Gas each sold $75 million in notes Friday.

Empire District priced 7% 15-year first mortgage bonds at Treasuries plus 438 bps and is using the proceeds to repay short-term debt.

Banc of America Securities was the bookrunner for the deal from the Joplin, Mo.-based electric and gas provider.

Northwest Natural Gas sold 5.37% medium-term notes due 2020 at par, with JPMorgan as the bookrunner.

The company is based in Portland, Ore.

Issuance slows as market absorbs

New issuance slowed Friday after a busy week totaling more than $30 billion. A good chunk of this came from the Pfizer Inc. deal, with the rest from a variety of industrials, utilities and energy companies.

"I think the market deserves a breather," a source said. "It's been busy for a while now, and no one knows when it will slow down."

A new trend has emerged with issuers jumping out of the gate on Monday morning if conditions aren't terrible.

"We'll probably see that again," the source said. "I think there's enough of a calendar that we'll have at least a couple. Everyone needs financing."

After widening Wednesday, causing the postponement of a couple of deals, spreads were back down again Friday.

"I think it will probably stay that way," a source said. "That was kind of a one-day deal."

UPS bonds mixed

The two-tranche issue from United Parcel Service priced Thursday was seen furthering gains to unchanged in trading Friday, a trader said.

The 3.875% five-year notes priced at Treasuries plus 230 bps and were seen at 222 bps bid, 215 bps offered by late afternoon. They were seen Thursday at 225 bps offered soon after pricing.

Simon Property mostly unchanged

The new 10.35% notes due 2019 from Simon Property Group did not move much after pricing Friday, a trader said.

The notes were trading at 97.5 to 99, with pricing at 97.758.

Barrick Gold holds gains

The 6.95% notes due 2019 from Barrick Gold Corp. held their gains from Thursday after pricing at Treasuries plus 462.5 bps.

The notes were at 450 bps bid, 445 bps offered, a trader said. After pricing Thursday they were at 448 bps bid, 446 bps offered.

KC Power tighter

Kansas City Power & Light Co. saw its 7.15% notes due 2019 remain slightly tighter than their price of 460 bps over Treasuries on Friday.

The notes were trading at 455 bps bid, 450 bps offered, a trader said, which is similar to where they were trading Thursday.

Pfizer still top traded

A bond from Tuesday's five-tranche issue from Pfizer Inc. was seen holding the top spot in trading for the second day in a row.

The drug company's 4.45% notes due 2012 were the most traded, with the 5.35% notes due 2015 from the same issue also near the top in volume.

Simon, Countrywide big movers

Simon Property Group's 5.75% bond due 2012 was one of the biggest movers Friday, tightening upwards of 80 bps on the same day it successfully priced an issue of 10-year senior notes.

Countrywide Financial saw its 5.8% note due 2012 widening more than 150 bps.

Both shifts are over the previous week's levels.

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