New Energy Transfer Partners bonds firm smartly, TJX still trading tight; primary activity seen muted

By Paul Deckelman and Sheri Kasprzak

New York, April 3 - The new Energy Transfer Partners LP bonds were the standouts of an otherwise quiet day in the investment-grade market Friday, firming solidly from the levels at which the Dallas-based natural gas midstream and intrastate transportation company priced those bonds late in the previous session.

Another solidly performing name was TJX Cos. Inc., which also priced on Thursday. The retailer's new 10-year notes traded at notably tighter levels for a second straight session.

Recently priced new deals for Dell Inc. and for Pfizer Inc. - the latter a high-volume market favorite lately - were also seen actively traded during the session.

Meanwhile, the primary arena, after a fairly busy week that saw the ETP , TJX and Dell deals price, along with offerings for Ingersoll-Rand Global Holding Co. Ltd., Black & Decker Corp. and Coca Cola Bottling Co. Consolidated, among others, took a breather Friday, traders said.

Among the established issues in the secondary sphere on Friday, a market source said the widely followed CDX Series 12 North American high-grade index tightened on the day to a mid bid-asked spread level of 189 bps, versus 198 bps on Thursday.

Advancing issues fell behind decliners by nearly a four-to-three ratio.

Overall market activity, reflected in dollar volumes, fell nearly 18% from the levels seen on Thursday.

Spreads in general were seen tighter, in line with substantially higher Treasury yields; for instance, the yield on the benchmark 10-year issue rose by 12 bps for a second straight session, to 2.89%

Energy Transfer deal energizes investors

A trader said that the new Energy Transfer Partners two-part mega-deal performed very well once it reached the secondary market.

He saw the company's 8.50% notes due 2014 tighten handsomely to an offered level of 620 bps, versus the 674.7 bps spread over comparable Treasuries at which the company priced that $350 million of bonds late Thursday.

Meanwhile, the other half of that $1 billion deal, its $650 million of 9% notes due 2019, also moved up smartly. The trader quoted those bonds at 595 bps bid, 590 bps offered, well in from the 624.5 bps over spread at which the bonds had priced.

TJX hangs onto most gains

Another winner Friday was the new issue from TJX.

A trader saw the 6.95% notes due 2019 at a bid level of 397 bps. While that was actually slightly wider than the 392 bps bid, 390 bps level seen in initial aftermarket trading Thursday, it was still well in from the 425 bps spread at which the Framingham, Mass.-based operator of the T.J. Maxx and Marshalls off-price department stores priced the $3745 million offering earlier Thursday.

Anglo American trades below issue price

On the other hand, Anglo American Capital plc's new bonds proved to be something of a disappointment to the market.

A trader included it among his listing of "a couple of deals that didn't do that hot," seeing the London-based mining group's two tranches of bonds - $1.25 billion of 9 3/8% notes due 2014 and $750 million of 9 3/8% 2019 notes - "start out like a house afire" after pricing Thursday at par, getting as good as 102 bid, before dropping back to around their respective issue levels.

Another trader the new bonds retreat still further, pegging the '19s slightly below par, at 99.5 bid, 100.25 offered.

Dell a definite gainer

One of the most widely traded issues Friday was Dell's new 5.625% notes due 2014. The bonds were quoted by a market source as trading at the 326 bps level, on mid-afternoon volume of nearly $60 million.

That was considerably tighter than the 367 bps bid, 362 bps offered level seen on Thursday, and even more of a gain from the 400 bps over spread at which the Round Rock, Tex.-based computer maker priced its $500 million of notes on Wednesday.

Tool-maker trading tighter

Black & Decker's 8.95% notes due 2014 were seen by a market source trading at 662 bps over, on busy volume of some $25 million at mid-afternoon.

The Towson, Md.-based power tool maker priced its $350 million of new bonds at a spread of 754.9 bps over last Monday.

Pfizer still good medicine for the market

But the market favorite seems to remain the bonds of New York drug giant Pfizer, which priced on March 17 as part of a near record five-part $13.5 billion mega-deal on steroids.

The various tranches of bonds have continued to trade at substantially firmer levels since then, and on many days have been among the most actively traded issues.

Friday was no exception, with Pfizer's 4.45% notes due 2012 the single most active investment-grade credit, the market source said, with over $85 million having changed hands at mid-afternoon.

Those bonds were seen trading at a spread of 187 bps over - in by nearly 20 bps from the 206 bps level at which they traded on Thursday, and in even more substantially from the 305 bps over level at which the company priced its $3.5 billion of three-years.

Pfizer's 6.20% notes due 2019 were quoted at 229 bps over, having tightened from the 250 bps over level at which the $3/25 billion of 10-years had traded earlier in the week. Those bonds originally priced at 325 bps over. Some $47 million of the bonds had changed hands by mid-afternoon.

Another active Pfizer issue was its 7.20% bonds due 2039. A market source saw them hovering around the 280 bps over level - some 10 bps tighter than where they were on Thursday, and 65 bps in from the 345 bps level at which the company priced its $2.5 billion of 30-years on March 17.

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