Plains All American, IADB sell bonds; more supply on tap; Emerson Electric, Rio Tinto tighten

By Andrea Heisinger

New York, April 15 - An uptick in new deals didn't materialize Wednesday, but sales did go through from Plains All American Pipeline LP and Inter-American Development Bank.

Price talk was given for an upcoming sale of five-year notes from the Industrial Bank of Korea.

Investors weren't scared away Wednesday by the news that data from bank stress tests would be revealed, a source said, but that may change when the material is out there.

In the secondary market, recent issues were doing well across the board, with Emerson Electric Inc. and Rio Tinto Finance (USA) Ltd. some of the best performing.

Spreads were slightly wider to unchanged, in general, as Treasury yields didn't budge or were a couple of basis points down from the previous day. The 10-year note was down 3 bps to yield 2.76%, while the 30-year bond was unchanged at a yield of 3.66%.

Plains sells 10-year notes

Plains All American Pipeline sold $350 million of 8.75% 10-year senior notes early Wednesday at Treasuries plus 592.7 bps.

Banc of America Securities LLC and J.P. Morgan Securities Inc. were bookrunners.

The oil and petroleum products company, based in Houston, plans to use proceeds to reduce borrowings under credit facilities and for general partnership purposes.

IADB prices $2.5 billion

The Inter-American Development Bank sold $2.5 billion in five-year bonds, two days after the sale was announced and guidance was set.

"I'm not sure why that one was delayed," a market source said. "It's kind of weird."

The unit of the World Bank Group, based in Washington, D.C., sold the 3% five-year notes at Treasuries plus 140.25 bps. The issuer promotes development in Latin American and Caribbean countries.

Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and RBS Securities Inc. were bookrunners.

Korean bank sets talk

The Industrial Bank of Korea set price guidance Wednesday on its planned benchmark-sized five-year global bond issue, a market source said.

Guidance was set at mid-swaps plus 525 to 550 bps for the Rule 144A and Regulation S deal.

Barclays Capital Inc., Citigroup, Merrill Lynch and Morgan Stanley are running the books.

The bonds from the retail and commercial bank, based in Seoul, South Korea, are expected to price Thursday.

Slowdown to continue

A market source said Wednesday that his previous day's prediction of an uptick in new deals seems not to be happening.

"It's not looking good for the rest of the week," he said. "I guess it will be boring for a couple more days."

A second source said news of a future airing of data from stress tests of the country's largest banks didn't seem to do much to the high-grade market.

"No, there really wasn't any impact," he said. "It didn't sway investors either way."

The government announced it will disclose the conditions of the nation's 19 largest banks. This is meant to restore confidence in the financial sector.

The source said that although there was no impact on the day the plan was announced, and there likely won't be "at least not until the material comes out. I can't wait for that day."

Interest in high-grade up

Interest in investment-grade rated deals has increased in recent weeks, an overseas source said.

"There is a lot of flow into the high grade," he said. "It is my personal opinion that a lot of these are former equity traders switching to good-yielding, reasonably rated bonds [as it] becomes harder and harder to earn 8% to 9% in stocks."

There are other perks to these quality names, he said. With many high-grade issuers an investor can earn similar returns "in no time," he said, adding that all of this new interest in the sector has left the credit market "overdone."

Plains All American deal tightens

The new 8.75% notes due 2019 from Plains All American were seen nicely tighter in trading late Wednesday. The bonds priced at Treasuries plus 592.7 bps and were quoted at 567 bps bid, 565 bps offered, a trader said.

Emerson Electric tranches better

A day after pricing, the three tranches of notes from Emerson Electric were all around 20 bps better, a trader said.

The 4.125% notes due 2015 were at 225 bps bid, 220 bps offered, well in from the 245 bps price.

The 5% notes due 2019 were at 216 bps bid, 213 bps offered after selling at Treasuries plus 233 bps over Treasuries. This was the worst-performing of the tranches.

The 6.125% notes due 2039 came in to 233 bps bid, the trader said, from the Treasuries plus 250 bps price.

Rio Tinto bonds trade well

The two-tranche deal priced Tuesday by Rio Tinto Finance did well in the secondary Wednesday, a trader said.

The 8.95% notes due 2014 were at 101.875 bid, 102.125 offered from the 98.805 price.

A tranche of 9% bonds due 2019 was at 100.625 bid, 100.75 offered - well up from the 97.586 price.

Toll Brothers bonds up

A recent split-rated bond issue from Toll Brothers Finance Corp. was up in trading, a trader said.

The 8.9% bond due 2017 was at 98.75, up more than a half basis point from the 97.975 price.

GE bond tops trading

A bond from General Electric Capital Corp. was at the top in trading volume early Wednesday afternoon.

The company's 6% bond due 2012 was popular and was followed by another financial bond.

A Federal Deposit Insurance Corp.-backed 1.625% bond due 2011 from Goldman Sachs Group Inc. was behind it, following the company's $1.66 billion first-quarter profit announcement earlier in the week, and subsequent $5 billion stock share sale.

Bank, broker CDS mostly tighter

Bank and broker credit-default swaps mostly came in by late Wednesday, a trader said.

Bank names were 15 bps tighter to unchanged, and brokers were 5 to 10 bps tighter.

Hartford, B of A big movers

A 6.1% bond due 2014 from Hartford Financial Services Group, Inc. was one of the day's big movers late Wednesday, a market source said, as it tightened more than 60 bps from the previous week.

The company announced it was named one of the World's Most Ethical Companies for the second year in a row by the Ethisphere Institute, according to a press release.

Bank of America Corp. moved almost exactly the same amount in the other direction, with a 5.75% bond due 2016 widening more than 60 bps from the week before.

The bank was first on the list of those whose health will be disclosed by the government in an effort to restore faith in the financial sector.

According to The New York Times they have issued $44 billion in bonds backed by the FDIC and have received $45 billion in government funds.

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