ConAgra, Hutchison Whampoa sell bonds; Suncorp-Metway, Ventas plan deals; secondary tightens

By Andrea Heisinger

New York, April 6 - Activity in the investment-grade bond market started off slowly Monday with ConAgra Foods, Inc. and Hutchison Whampoa International Ltd. two of the only issuers.

The lack of deals wasn't due to market conditions, a source said, as the remainder of the week's calendar looks thin.

Australia's Suncorp-Metway Ltd. is set to price a two-tranche offering Tuesday, along with split-rated Ventas Realty LP, which is planning a reopening of notes.

Spreads in general tightened late Monday as Treasury yields were slightly wider. All were about 3 basis points out, including the 10-year note, which was at 2.92%.

ConAgra upsizes sale

Omaha-based food company ConAgra sold an upsized $1 billion of senior notes in two tranches late Monday.

The size of the deal was originally announced at $750 million but was increased due to demand, a source said.

The $500 million of 5.875% five-year notes priced at a spread of Treasuries plus 400 bps.

The $500 million of 7% 10-year notes priced at a spread of Treasuries plus 412.5 bps.

Both came in line with price talk of the low 400 bps, a market source said, or in the case of the five-year notes, at the tight end.

The company is using proceeds to repurchase senior notes due 2027, 2010 and 2011 in tender offers, and for other purposes.

Banc of America Securities LLC and J.P. Morgan Securities Inc. ran the books.

Hutchison Whampoa sells 10 year

Hong Kong-based infrastructure company Hutchison Whampoa sold $1.5 billion of 7.625% 10-year notes at Treasuries plus 475 bps. They were sold via Rule 144A and Regulation S.

Price talk was 475 bps, a source said, which was where they priced.

Deutsche Bank Securities Inc., HSBC Securities and JPMorgan were bookrunners.

The bonds found strong interest in the market, a source close to the sale said, with books oversubscribed about 4.5 times.

"That was The Street bidding," said a strategist about the oversubscribed book.

Suncorp-Metway plans deal

Australia's banking and insurance company Suncorp-Metway is planning a sale of notes in two tranches guaranteed by the Australian government, a source close to the deal said Monday. It is going overnight to allow more accounts in and is expected to price Tuesday, he said.

The deal is expected to be in tranches of two- and three-year notes.

Bookrunners are Citigroup Global Markets and JPMorgan.

The company is based in Brisbane, Australia.

Ventas to reopen notes

Split-rated Ventas Realty LP, a unit of Ventas Inc., is set to reopen its issue of 6.5% senior notes due 2016 on Tuesday to add $200 million, according to a press release from the company.

The notes are rated Ba1 by Moody's Investors Service, BBB- by Standard & Poor's and BBB- by Fitch Ratings, with a source saying the deal is being run off the high-yield syndicate desk.

The notes will be added to the outstanding $200 million of 6.5% notes due 2016 from the company.

The sale will be concurrent with an issue of 8.5 million shares of common stock.

Banc of America Securities is active bookrunner, with Citigroup and UBS Investment bank as passives.

The health care real estate investment trust is based in Chicago and plans to use proceeds to fund cash tender offers for notes due 2010, 2012, 2014 and 2015.

Market volume quiets

The high-grade market may be quieter than in recent weeks, a market source said late Monday, adding that his syndicate desk's calendar was "looking slow."

Another source agreed that the volume was on the downturn.

"It's a little fatigued, I'd say," the source said of recent hectic weeks. "Companies need money but a lot of them already tapped [the market]."

With the exception of ConAgra, most of the deals priced or announced Monday were from overseas companies. One was a government-guaranteed bond from Australia.

"There are a lot of those [government] programs outside ours," a market source said. "I think a lot of them haven't really taken advantage yet, or aren't doing them in the U.S."

ConAgra gains slightly

The two tranches of the ConAgra deal were seen moving in slightly from pricing levels, a trader said late Monday.

The 5.875% five-year notes priced at Treasuries plus 400 bps and were in about 5 bps to 395 bps bid.

The 7% 10-year notes fared slightly better, the source said, tightening to 400 bps bid, 388 bps offered.

Hutchison bonds move up

The new 7.625% notes from Hutchison Whampoa were being traded and quoted at a dollar figure, an investment-grade secondary source said. They landed at 100.25 bid, up from the 99.676 price earlier in the afternoon.

A source outside the investment-grade market quoted the bonds at a spread of 467 bps bid, 463 bps offered, making them slightly better than the price of Treasuries plus 475 bps.

Energy Transfer bonds mixed

A recent two-tranche issue from Energy Transfer Partners was seen both losing and continuing gains from Friday after pricing Thursday, a trader said.

The 8.5% notes due 2014 were trading at 630 bps bid, 620 bps offered. This was better than the price of 674.7 bps over Treasuries but unchanged or worse than the 620 bps price Friday.

The 9% bonds due 2019, however, continued to make gains from the price of 624.5 bps.

On Monday they were at 588 bps bid, 582 bps offered, the trader said, which was better than Friday's 595 bps bid, 590 bps offered.

Pfizer takes top traded

A bond from a recent issue from Pfizer Inc. was the top traded as of early afternoon, a market source said. The 4.45% notes due 2012 have remained popular since pricing in late March as the short-dated tranche in a massive deal.

General Electric Capital Corp. and Bank of America Corp. also had issues high on the list of trading volume.

HSBC, Citi among movers

A 5.5% bond due 2016 from HSBC Finance tightened more than 45 bps late Monday, a source said, a day after another unit, HSBC Holdings, announced it had raised $17.7 billion in a sale of shares to investors.

Citigroup Inc.'s 6.125% notes due 2036 widened more than 60 bps by late Monday as the company's subsidiary, Citi Holdings, announced it had named Mike Corbat the unit's chief executive officer. Citi Holdings contains many of the company's riskier assets.

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