Halliburton, Boeing, CVS, KeyCorp, Morgan Stanley among day's sales; Medtronic tightens

By Andrea Heisinger

New York, March 10 - The high-grade primary market came alive Tuesday with deals from Halliburton Co., Boeing Co., CVS Caremark Corp. and South Carolina Electric & Gas Co. on the industrial side. There were also sales of notes backed by the Federal Deposit Insurance Corp. Temporary Liquidity Guarantee Program from KeyCorp and Morgan Stanley.

Meanwhile, the market tone got a boost from a Citigroup Inc. internal memo about how the company was doing well so far in 2009 and turning a profit.

The secondary was busy, mostly on the industrial side, dealing with the many new issues for the week so far.

Many of the day's issues tightened modestly or not at all. The recent three-tranche deal from Medtronic Inc. moved in solidly.

Spreads were generally tighter Tuesday as Treasury yields widened from the previous day's levels. The 10-year Treasury note was out 15 basis points to 3.00%.

Halliburton sells $2 billion

Oilfield operator Halliburton sold $2 billion senior notes in two tranches.

The $1 billion of 6.15% 10-year notes priced at Treasuries plus 320 bps, while the $1 billion of 7.45% 30-year notes priced at Treasuries plus 375 bps.

Both came in line with price guidance that was in the 320 bps area for the 10-year notes and in the 375 bps area for the 30-year tranche.

The deal was "well-oversubscribed," a source close to it said, adding that total books were $8 billion.

"We were going for benchmark [size] in both tranches," he said. "It came out very in line with what the company and market were looking for."

The sale from the Houston-based company was pretty evenly split between the two tranches, he said, with slightly more in the 10-year books.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities and RBS Greenwich Capital were tapped as bookrunners.

Boeing prices three tranches

Aerospace and defense company Boeing sold $1.85 billion senior notes in three tranches late Tuesday, making full terms unavailable at press time, a source said.

The $700 million of five-year notes priced at Treasuries plus 310 bps, while the $650 million of 10-year notes sold at Treasuries plus 320 bps.

A $500 million tranche of 30-year notes priced at Treasuries plus 330 bps.

Bookrunners were J.P. Morgan Securities Inc. UBS Investment Bank, Banc of America Securities LLC, Barclays Capital Inc., BNP Paribas Securities, Citigroup, Credit Suisse Securities, Deutsche Bank Securities, Goldman Sachs & Co., Morgan Stanley & Co. Inc. and RBS Greenwich Capital.

The company is based in Chicago.

CVS offers 10-year notes

CVS Caremark priced $1 billion of 6.6% 10-year senior notes at Treasuries plus 370 bps.

The notes priced in line with talk that was in the 370 bps area, a source close to the deal said.

The prescription and health care chain, based in Woonsocket, R.I., plans to use proceeds to repay debt under a bridge credit facility and repay a portion of outstanding commercial paper.

Barclays Capital, Banc of America Securities, Deutsche Bank Securities, Morgan Stanley and Wachovia Capital Markets ran the books.

Morgan Stanley prices FDIC deal

New York City-based financial services firm Morgan Stanley quietly priced a $5 billion issue of notes in two tranches backed by the FDIC.

Full terms were not available from the bookrunner as of press time.

The offering consisted of a $2 billion tranche of three-year fixed-rate notes priced to yield Treasuries plus 87.4 bps and a $3 billion tranche of three-year floaters priced at par to yield three-month Libor plus 20 bps.

Morgan Stanley was the bookrunner.

KeyCorp sells FDIC notes

KeyBank holding company KeyCorp priced $437.5 million of floating-rate notes due 2012 that are backed by the FDIC.

The deal from the Cleveland-based company was announced late Monday and went overnight to take advantage of Asian and European investors, a source said.

The notes priced at par to yield one-month Libor plus 43 bps.

Credit Suisse Securities and J.P. Morgan Securities were bookrunners.

South Carolina utility reopens issue

South Carolina Electric & Gas reopened its issue of 6.05% first mortgage bonds due 2038 to add $175 million. The amount was increased from a planned $150 million, a market source said.

The bonds priced to yield Treasuries plus 240 bps, which was significantly wider than the original issue's Treasuries plus 165 bps from January 2008.

Total issuance is $535 million, including $360 million issued Jan. 14, 2008.

The Columbia, S.C.-based utility is using the proceeds to repay short-term borrowings made under a cash management money pool and to finance capital expenditures.

Bank of New York Capital Markets and Mizuho Securities were bookrunners.

Medtronic gives deal terms

Medical technology company Medtronic Inc. gave terms for its three-tranche issue priced late Monday.

The $550 million of 4.5% five-year notes priced at 262.5 bps over Treasuries, while the $400 million of 5.6% 10-year notes sold at Treasuries plus 275 bps.

The $300 million tranche of 6.5% 30-year notes priced at 295 bps over Treasuries.

The Minneapolis-based company is using the proceeds to repay a portion of commercial paper outstanding.

J.P. Morgan Securities and Deutsche Bank Securities ran the books.

Day sees big trades

The primary market was crowded with industrial names and a couple of FDIC-backed sales as the tone improved on some slightly positive banking news from Citigroup.

"We had a lot of big trades today," a source said, noting Boeing and Halliburton as garnering the most attention.

"I think today set a good tone for the week," he said. "Last week was terrible."

Sources were hesitant to say if the next couple of days would build on Tuesday's momentum with an equally crowded market.

"It's going to be a go, no-go call in the morning," one market source said. "It's really hard to tell overall."

Halliburton mixed in trading

The two tranches of the new Halliburton deal were seen mixed in the secondary, a trader said.

The 6.15% notes due 2019 tightened 10 to 20 bps, seen at 310 bps bid, 300 bps offered. The 7.45% notes due 2039 were virtually unchanged at 375 bps bid, 365 bps offered from the 375 bps price.

CVS bonds better in trading

The new 6.6% notes due 2019 from CVS Caremark were seen in about 10 bps from their pricing level, a trader said.

They were at 360 bps offered soon after pricing, which is in from the 370 bps over Treasuries price.

Boeing nearly unchanged

The new three tranches from Boeing moved in slightly or were seen unchanged in trading late Tuesday, a secondary source said.

The notes due 2014 were at 305 bps bid, in about 5 bps from the 310 bps over Treasuries price.

The tranche due 2019 tightened even less from the Treasuries plus 320 bps price to 317 bps bid.

The notes due 2039 were mostly unchanged at 330 bps bid, 315 bps offered from the 330 bps price.

South Carolina notes move little

The reopened notes from South Carolina Electric & Gas were seen moving in slightly in the secondary late Monday, a trader said.

The 6.05% notes due 2038 were at 239 bps bid, 233 bps offered. This was a minimal change from the 240 bps price.

Medtronic tranches firm

The new three-tranche deal from Medtronic was seen performing well in the secondary late Tuesday, a trader said.

All of the tranches were firmer, with the short and long bond moving in the most.

The 4.5% bond due 2014 was at 242 bps offered, in about 20 bps from the 262.5 bps over Treasuries price.

The 5.6% notes due 2019 were about 6 bps tighter, seen at 269 bps offered from the 275 bps price.

The 6.5% notes due 2019 were about 25 bps better, at 270 bps offered, in from the 295 bps over Treasuries price.

PG&E moves in slightly

The new 5.75% bond due 2014 from PG&E Corp. was seen in slightly from its price of 395 bps over Treasuries, a trader said.

They were at 390 bps bid, 382 bps offered.

Bank CDS reverse moves

A trader said late Tuesday afternoon that the bank credit-default swaps had reversed Monday's moves, mostly for the better.

Bank of America Corp. was seen 40 bps tighter Tuesday, while it was 20 bps wider Monday.

Citigroup was 55 bps tighter, while it was 65 bps wider Monday. The bank remains 10 bps wider than two days ago, the trader said.

JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs & Co. and Wells Fargo & Co. were all seen 20 bps tighter Tuesday.

Merrill Lynch & Co. did slightly better at 30 bps tighter.

B of A top traded

Bank of America was seen with the top-traded bond of the day as of early Tuesday afternoon.

The company's 3.125% FDIC-backed bond due 2012 was at the top of the list.

Following this issue were three from General Electric Capital Corp., which were not all backed by the FDIC.

Financials day's big movers

HSBC Holdings, Merrill Lynch and JPMorgan Chase were seen having the day's big moving issues late Tuesday.

A 6.5% bond due 2036 from HSBC Holdings tightened more than 50 bps.

Merrill Lynch's 6.11% notes due 2037 and JPMorgan's 5.6% notes due 2011 were each more than 50 bps wider.

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