Packed primary sees Gilead, RBC, Coca-Cola price; Aetna, Air Lease, Pitney Bowes firm

By Cristal Cody and Aleesia Forni

Virginia Beach, March 4 - Issuers stormed the high-grade bond market on Tuesday as tensions surrounding the situation in the Ukraine eased, marking one of the busiest days of the year so far for the primary.

The session's largest sale was priced by Gilead Sciences Inc., which brought to market a $4 billion offering in three tranches.

Royal Bank of Canada sold $1.65 billion of five-year notes in two maturities on Tuesday.

The sale included $650 million of floating-rate notes due 2019 priced at par to yield Libor plus 53 basis points and $1 billion of 2.15% five-year notes sold at Treasuries plus 63 bps.

Also on Tuesday, Burlington Northern Santa Fe LLC sold $1.5 billion of senior debentures in two tranches.

There was $500 million of 3.75% notes due 2024 priced at 110 bps over Treasuries.

A second tranche was $1 billion of 4.9% 30-year bonds priced at 128 bps over Treasuries.

Coca-Cola Co. brought to market a $1 billion issue of 18-month floating-rate notes, which sold at par to yield Libor plus 1 bp, according to a market source.

Potash Corp. of Saskatchewan Inc. sold $750 million of 10-year notes at 105 bps over Treasuries.

The notes sold at the tight end of talk.

Meanwhile, Aetna Inc. sold $750 million of senior notes in tranches due 2019 and 2024 on Tuesday.

The company priced $375 million of 2.2% notes due 2019 sold at Treasuries plus 70 bps and $375 million of 4.75% 30-year bonds at a spread of 115 bps over Treasuries.

Pitney Bowes Inc. sold an upsized $500 million of 4.625% senior notes due 2024 during the session with a spread of 205 bps over Treasuries.

In another upsized deal, Air Lease Corp. priced $500 million of 3.875% seven-year senior notes at 175 bps over Treasuries, a market source said.

The deal was upsized from $350 million and priced at the tight end of talk.

NStar Electric Co. also came to market, selling $300 million of 30-year senior debentures at 83 bps over Treasuries.

Pricing was at the tight end of price talk.

Also on Tuesday, Kommunalbanken AS priced a $350 million add-on to its existing floating-rate notes due May 2, 2017 to yield Libor plus 9 bps, a market source said.

Pricing was in line with talk.

The notes have a coupon of Libor plus 12 bps and sold at 100.101 in a Rule 144A and Regulation S deal.

The session also saw new issues from Viacom Inc. and Citigroup Inc., though full details were not available at press time.

In other market news on Tuesday, the Bank of England announced plans to price a dollar-denominated offering of three-year notes in a Rule 144A and Regulation S deal.

Roughly $19 billion of paper has priced this week in just two sessions, already closing in on earlier predictions of a $20 billion to $25 billion week.

One source quipped that the busy week is "not over yet," and expects the flood of new issuance to continue on Wednesday.

Investment-grade credit spreads tightened at the start of the session on Tuesday and traded better over the day, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 2 bps to a spread of 63 bps.

In the secondary market, Viacom's three tranches of notes firmed late in the day, according to traders.

Pitney Bowes' 4.625% notes due 2024 tightened 5 bps in aftermarket trading, according to a trader.

Aetna's 4.75% notes due 2044 traded about 5 bps better.

Air Lease's 3.875% notes due 2021 headed out 5 bps tighter, a source said.

Burlington Northern's two tranches of debentures brought on Tuesday firmed 3 bps, according to traders.

Burlington Northern's 3.75% debentures due 2024 traded better at 107 bps bid, 105 bps offered and later at 107 bps bid, 104 bps offered, according to traders.

The tranche of 4.9% debentures due 2044 headed out tighter in aftermarket trading at 125 bps bid, 122 bps offered, traders said.

Other new issues were mostly unchanged in aftermarket trading, sources said.

Coca-Cola's floating-rate notes due 2015 traded flat.

Potash's 3.625% notes due 2024 were wrapped around issuance, according to a trader.

Gilead prices $4 billion

Gilead Sciences priced $4 billion of senior notes (Baa1/A-/) in three tranches, according to a company press release.

The sale included $500 million of 2.05% notes due April 2019 and $1.75 billion of 3.7% 10-year bonds.

There was also a $1.75 billion tranche of 4.8% bonds due 2044.

Full details of the sale were not available at press time.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes.

The biopharmaceutical company is based in Foster City, Calif.

RBC two-parter

Royal Bank of Canada priced $1.65 billion of five-year notes (Aa3/AA-/AA-) in two tranches during Tuesday's session, according to two separate FWP filings with the Securities and Exchange Commission.

The sale included a $650 million tranche of floating-rate notes due 2019 priced at par to yield Libor plus 53 bps.

A $1 billion tranche of 2.15% five-year notes sold at 99.926 to yield 2.158%, or Treasuries plus 63 bps.

RBC Capital Markets LLC, Credit Agricole Securities (USA) Inc. and Goldman Sachs were the joint bookrunners.

RBC is a Montreal-based financial services company.

Burlington sells $1.5 billion

Burlington Northern Santa Fe priced $1.5 billion of senior debentures (A3/BBB+/) in tranches due 2024 and 2044, according to an informed source and an FWP filed with the SEC.

A $500 million tranche of 3.75% notes due 2024 priced at 110 bps over Treasuries, or 99.673, to yield 3.789%.

There was also $1 billion of 4.9% 30-year bonds priced at 128 bps over Treasuries.

Pricing was at 99.792 to yield 4.913%.

JPMorgan, Morgan Stanley & Co. LLC and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, repayment of outstanding debt and distributions.

Burlington Northern was last in the market with a $1.5 billion offering of debentures on Aug. 13, 2013.

The deal included $800 million of 3.85% debentures due 2023 sold with a spread of Treasuries plus 117 bps and $700 million of 5.15% debentures due 2043 priced at Treasuries plus 140 bps.

The holding company for railroad transportation subsidiaries is based in Fort Worth.

Coca-Cola prices floaters

Coca-Cola priced $1 billion of 18-month floating-rate notes (Aa3/AA-/A+) at par to yield Libor plus 1 bp, according to a market source.

Coca-Cola's floating-rate notes due 2015 traded flat at 1 bp bid, a trader said.

Citigroup Global Markets Inc. and JPMorgan were the bookrunners.

Proceeds will be used to repay commercial paper.

The Atlanta-based beverage company was last in the U.S. bond market with a $5 billion sale in five maturities on Oct. 29.

Aetna prices in two maturities

Aetna priced $750 million of senior notes (Baa2/A-/A-) in two tranches, according to an FWP filing with the SEC.

A $375 million tranche of 2.2% notes due 2019 sold at 99.9 to yield 2.221%, or Treasuries plus 70 bps.

There was also a $375 million tranche of 4.75% 30-year bonds, which priced at a spread of 115 bps over Treasuries.

Pricing was at 99.76 to yield 4.765%.

Aetna's 4.75% notes due 2044 firmed to 110 bps bid, 109 bps offered, a trader said.

The joint bookrunners were BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, RBS Securities Inc. and U.S. Bancorp Investments Inc.

Proceeds will be used to redeem all of the company's outstanding 6% senior notes due 2016.

The diversified health-care benefits company is based in Hartford.

Potash prices tight

Potash Corp. of Saskatchewan priced $750 million of senior notes (A3/A-/) due 2024 with a spread of 105 bps over Treasuries during Tuesday's session, according to a market source and an FWP filed with the SEC.

Pricing was at 99.111 to yield 3.732%.

The notes sold at the tight end of talk.

Potash's 3.625% notes due 2024 headed out in the secondary market flat at 105 bps bid, 104 bps offered, a trader said.

BofA Merrill Lynch, Morgan Stanley and UBS Securities LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes, including the refinancing of $500 million of Potash's 5.25% notes maturing on May 15, 2014.

Potash is a fertilizer and related industrial and feed products company based in Saskatoon, Sask.

Air Lease issues $500 million

Air Lease priced an upsized $500 million of 3.875% senior notes (/BBB-/) due 2021 with a spread of 175 bps over Treasuries, a market source said.

The notes sold with an issue price of 99.802 to yield 3.907%.

In the secondary market, Air Lease's 3.875% notes due 2021 firmed to 170 bps bid, 166 bps offered, a trader said.

BofA Merrill Lynch, Citigroup Global Markets, JPMorgan, RBS Securities, Barclays, BMO Capital Markets, BNP Paribas Securities Corp., Credit Suisse Securities, Deutsche Bank Securities Inc., Fifth Third Securities Inc., Goldman Sachs, Mizuho Securities USA Inc. and RBC Capital Markets were the joint bookrunners.

Proceeds will be used general corporate purposes, which may include the purchase of commercial aircraft and the repayment of debt, according to an FWP filed with the SEC.

Air Lease is a Los Angeles-based aircraft leasing company.

Pitney Bowes upsizes

Pitney Bowes priced an upsized $500 million issue of 4.625% 10-year senior notes (Baa2/BBB/) on Tuesday at 205 bps over Treasuries, according to an informed source and an FWP filed with the SEC.

The notes priced at 99.155 to yield 4.732%.

Pitney Bowes' 4.625% notes due 2024 tightened to 200 bps bid, 196 bps offered in the secondary market, a trader said.

Goldman Sachs, JPMorgan, RBS Securities and HSBC Securities (USA) Inc. were the joint bookrunners.

Proceeds will be used to purchase a portion of the company's outstanding debt securities and to pay related costs and expenses. Any remaining proceeds will be used for general corporate purposes.

The issuer is a Stamford, Conn.-based office supply manufacturer.

NStar new issue

NStar Electric priced $300 million of senior debentures (A2/A-/) due March 1, 2044 on Tuesday at 83 bps over Treasuries, according to a market source and an FWP filing with the SEC.

Pricing was at 99.309 to yield 4.442%.

BofA Merrill Lynch, JPMorgan, Mitsubishi UFJ Securities, RBC Capital Markets and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay $300 million of outstanding 4.875% debentures due April 15, 2014 originally issued by Boston Edison Co.

The electric subsidiary of Northeast Utilities is based in Boston.

Kommunalbanken tap

Kommunalbanken reopened its issue of floating-rate notes due May 2, 2017 (Aaa/AAA/) on Tuesday to add $350 million to yield Libor plus 9 bps, a market source said.

Pricing was in line with talk.

The notes priced at 100.101 and carry a coupon of Libor plus 12 bps.

Total issue size is now $850 million.

BNP Paribas Securities, Goldman Sachs and Morgan Stanley were the joint bookrunners for the Rule 144A and Regulation S deal.

The government-funded lender to municipalities is based in Oslo.

Bank of England eyes deal

The Bank of England is planning a dollar-denominated offering of three-year notes, an informed source said.

The sale is being done under Rule 144A and Regulation S.

Bookrunners are Barclays, Credit Suisse Securities, JPMorgan and RBC Capital Markets.

The central bank of the United Kingdom is based in London.

Bank/brokerage CDS fall

Investment-grade bank and brokerage CDS prices fell, according to a market source.

Bank of America Corp.'s CDS costs tightened 5 bps to 65 bps bid, 68 bps offered. Citigroup's CDS costs firmed 2 bps to 78 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs declined 2 bps to 60 bps bid, 63 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 39 bps bid, 44 bps offered.

Merrill Lynch's CDS costs tightened 5 bps to 68 bps bid, 71 bps offered. Morgan Stanley's CDS costs firmed 3 bps to 87 bps bid, 90 bps offered. Goldman Sachs Group, Inc.'s CDS costs tightened 2 bps to 88 bps bid, 93 bps offered.

Paul Deckelman contributed to this review.

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