Campbell's, Macquarie, Asciano hit market; Q1 breaks records; selling active in new bonds

By Andrea Heisinger and Cristal Cody

New York, March 31 - Three issuers tapped the investment-grade bond market Thursday to close out what was possibly a record month of March.

Campbell Soup Co. priced $500 million of 10-year notes that had a do-not-grow provision attached.

Australia's Macquarie Bank Ltd. priced $1 billion of 10-year subordinated notes via Rule 144A. They were priced at the low end of guidance.

A late-day sale came from Asciano Finance Ltd., also based in Australia. The issuer priced $1 billion of notes reallocated in two tranches under Rule 144A. There was $750 million of notes due 2018 and an added $250 million of notes due 2023. The full terms were not available at press time for the sale handled by J.P. Morgan Securities LLC, Morgan Stanley & Co., Inc. and RBS Securities Inc.

A market source said that people were looking at what the issuance total was for the first quarter more than for March. The quarter came in as the highest ever thanks to large amounts of new deals in a couple of weeks in early January and at the end of March.

A source said that there was about $93.3 billion of new deals in March and roughly $245 billion for the quarter.

"I know we hit a record for the quarter but haven't heard for the month," he said.

This was good news, another source said, as there has been a lot of volatility throughout the first part of the year, but issuers have mostly shrugged off headlines.

"We had a couple of rough spots, but I think after a breather everybody got back [to it]," the source said.

The new bonds from Macquarie and Campbell's tightened in the secondary market, sources said.

New corporate bonds have seen "pretty strong selling from underwriters that maintained some of the deals over the last two weeks," a source said Thursday.

"The Street has definitely been selling Sanofi-aventis," the source said.

Paris-based pharmaceutical company Sanofi-aventis SA's $7 billion deal (A2/AA-) priced on March 22 in six tranches.

Otherwise, though, secondary trading was slow on Thursday, a source said.

"Take a look at trading levels. Thus far, it's probably 80% of a usual Thursday," the source said in the late afternoon.

Overall investment-grade Trace volume was flat at just under $13 billion, according to a market source.

Most of the big names were trading, with high volume seen in Verizon Communications, Inc.'s $6.25 billion bond deal (A3/A-/A) priced the day after Sanofi-aventis tapped the market, a source said.

New York-based Verizon's new 4.6% notes due 2021, which priced at 135 basis points over Treasuries, traded Thursday at a spread of 119 bps, the source said.

In other trading, Archer-Daniels-Midland Co.'s tranche of long-dated debentures (A2/A/A) sold Wednesday narrowed, a source said. The Decatur, Ill.-based crop processor priced $1 billion of 5.765% 30-year bonds at 120 bps over Treasuries.

"Archer-Daniels-Midland's 30-year deal tightened about 15 basis points," the source said. "When you're looking at a 30-year bond, that's a big move."

In U.S. Treasuries, bonds dipped, sending yields up. The benchmark 10-year note yield rose 2 bps to 3.46%, and the 30-year bond yield edged up 1 bp to 4.51%.

"It's the last day of the quarter," a source said. "It's been relatively quiet out there as a result of the quarter-end malaise."

Campbell's $500 million sale

Campbell Soup sold $500 million of 4.25% 10-year senior notes (A2/A/A) to yield Treasuries plus 85 bps, a market source said.

They sold in line with guidance in the 85 bps area.

Merrill Lynch, Morgan Stanley & Co., Inc. and UBS Securities LLC were the bookrunners.

Proceeds are being used for general corporate purposes including repayment of commercial paper borrowings and to fund the purchase price of any acquisitions pursued.

The notes traded about 1 bp tighter in the secondary, a trader said. The notes were last seen at 84 bps bid, 83 bps offered.

The food products company is based in Camden, N.J.

Macquarie sells 10-year

Macquarie Bank sold $1 billion of 6.625% 10-year subordinated notes (A2/A-) at a spread of Treasuries plus 320 bps, said a source who worked on the trade.

They sold at the tight end of talk in the 325 bps area.

They priced under Rule 144A.

The bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch and Macquarie.

Proceeds are being used for general corporate purposes.

In trading, the notes firmed to 318 bps bid, 312 bps offered, a trader said.

The unit of investment bank and financial services firm Macquarie Group Ltd. is based in Sydney, Australia.

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