Anadarko, Consumers Energy, Pitney Bowes, FPL price bonds; AIG bonds up slightly in trading

By Andrea Heisinger

New York, March 2 - It was a subdued day in the high-grade bond market Monday as Anadarko Petroleum Corp., Pitney Bowes Inc., FPL Group Capital Inc. and Consumers Energy Co. priced deals despite bad weather and a further bailout of American International Group.

Syndicate desks questioned whether there would have been more issuers if not for the weather.

The secondary saw most financial bonds lower, with the exception of AIG moving slightly higher. Most of the day's new issues priced too late for trading levels, but the two utilities were seen little changed from pricing.

Bonds were almost uniformly wider late Monday as Treasury yields went lower. Middle maturity bonds were seen dropping the most, with the three-year note dropping 12 basis points to 1.24%.

Anadarko sells $1.1 billion

Anadarko Petroleum priced $1.1 billion of senior notes in two tranches.

The $500 million of 7.625% five-year notes priced at 99.7 to yield 7.697%, or Treasuries plus 587.5 basis points.

The $600 million of 8.7% 10-year bonds priced to yield 8.747%, or Treasuries plus 587.5 bps.

The oil and gas company plans to use the proceeds to repay debt maturing in 2009.

J.P. Morgan Securities Inc. and UBS Investment Bank were active bookrunners.

FPL prices 10-year bonds

FPL Group Capital sold $500 million of 6% 10-year bonds at 99.957 to yield 6.006%, or Treasuries plus 310 bps.

The proceeds will be added to the general funds to repay commercial paper issued to fund investments in independent power projects.

Barclays Capital Inc., BNP Paribas Securities, Credit Suisse Securities and Scotia Capital ran the books.

Consumers Energy offers bonds

Michigan's Consumers Energy priced $500 million of 6.7% first mortgage bonds due 2019 at 99.952 to yield 6.706%, or Treasuries plus 380 bps.

Barclays Capital and JPMorgan ran the books.

Pitney Bowes sells small deal

Mail processing equipment company Pitney Bowes priced $300 million of 6.25% 10-year unsecured notes at 99.821to yield 6.274%, or Treasuries plus 337.5 bps.

Bookrunners were Banc of America Securities LLC and JPMorgan.

Weather, AIG slow high grade

The inclement weather on the East Coast put a damper on new deals Monday, a syndicate source said.

Although a few issues were priced, he said if it weren't for the snow there could have been more.

"It was kind of quiet today," he said. "We filled our day talking to [future] issuers."

The remainder of the week is looking busy, he said, as other syndicate desks had commented on Friday.

"It [issuance] should have started today," he said. "With the equity backdrop and the weather, it kind of shut things down."

Many desks were either thinly staffed or people left early due to the snow, a source said.

It was unclear because of this factor how much impact the further government bailout of AIG had on the market.

The insurance company, after reporting a $61.7 billion loss for the fourth quarter, received another $30 billion bailout from the government. It was the fourth injection of government money AIG has received.

"That was the question of the day," a source said, "if it would have been a 'go' day if the weather hadn't have been like it was."

Tuesday is looking busy, he added.

Louisiana-Pacific launches bonds

Louisiana-Pacific Corp. launched a split-rated issue of bonds (Ba3/BBB-/) Monday. The deal will be $350 million of senior secured notes due 2017. It will be priced via Rule 144A.

Banc of America Securities, Goldman Sachs & Co. and RBC Capital Markets are bookrunners.

New Chevron top traded

One tranche of the Chevron Corp. deal that priced Feb. 26 was seen as the top-traded high-grade bond early Monday afternoon.

The 3.45% notes due 2012 were seen trading significantly tighter than where they priced, holding onto early gains.

Financial sector sloppy in trading

A trader in the financial sector of the high-grade secondary said his side of the market was "sloppy" late Monday afternoon.

Most financial bonds were lower, with the exception of AIG, which saw its paper go 2 to 3 bps higher generally, he said.

Another trader said the company's 4% bonds due 2009 were down 9 bps to 39.5 bps bid, 40.5 bps offered.

Their 5.45% notes due 2017 were a little better at 52 bps bid, 53 bps offered, they said.

FPL Group bonds tighten

The new 6% bonds due 2019 from FPL Group Capital were seen 5 to 10 bps tighter soon after pricing, a trader said.

They were at 305 bps bid, 297 bps offered, in from the 310 bps over Treasuries price.

Consumers Energy unchanged

The new 6.7% bonds due 2019 from Consumers Energy were seen virtually unchanged from pricing, a trader said.

They were at 380 bps bid, 370 bps offered, after selling at 380 bps over Treasuries.

Bank, broker CDS widen

Bank and broker credit-default swaps were both seen widening slightly to significantly in late afternoon, a trader said.

The bank CDS were 15 to 55 bps wider generically. Bank of America Corp. was at the high end, seen 55 bps wider, while Citigroup Inc. was 50 bps out.

Brokers were 15 to 50 bps wider, with Merrill Lynch & Co. at the high end, moving out 50 bps.

GE day's big mover

A bond from General Electric Capital Corp. was the day's big mover late Monday.

The company's 5% bond due 2013 was more than 130 bps wider than the previous week's level. The move follows the company's dividend cut and other efforts to maintain its AAA credit rating.

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