Citi, TJX, Wal-Mart, Bemis, Plains sell bonds; spreads improved in trading, new Citi gains

By Andrea Heisinger

New York, July 20 - A rush of new deals hit the high-grade primary Monday, including offerings from Citigroup Inc., TJX Cos. Inc., Wal-Mart Stores Inc., Bemis Co., Inc., Plains All American Pipeline LP and General Electric Capital Corp.

Citigroup was the least surprising of the day, a source said, as the deal follows Friday's second-quarter earnings announcement.

"I'm surprised we didn't see any more [financials]," he said.

The secondary saw all of the new deal's spreads tightening to varying degrees. The new Bemis 2019 was one of the best performing, but a trader said it was due to the pricing.

The Citigroup bond managed to tighten significantly soon after pricing, and the financial sector was generally improved, a trader in those bonds said.

Spreads were wider overall as Treasury yields moved in slightly. The 10-year note was in 4 basis points to 3.61% and the 30-year bond was in 3 bps to 4.51%.

Citigroup sells $2.5 billion

Citigroup priced $2.5 billion of 8.125% 30-year notes at Treasuries plus 380 bps, an informed source said.

They were sold without the backing of the Federal Deposit Insurance Corp.

There was about $8 billion in demand for the sale, the source said. Books were well-oversubscribed by 10 a.m. ET, he said.

"It went very well," he added. "We were happy with it."

The bookrunner was Citigroup Global Markets.

The financial services company is based in New York City.

TJX upsizes sale

TJX Cos. priced an upsized $400 million in 4.2% six-year senior notes at Treasuries plus 170 bps.

The size was increased from $250 million.

Banc of America Securities, J.P. Morgan Securities, Deutsche Bank Securities and RBS Securities ran the books.

Proceeds are going to repay the company's 7.45% notes due Dec. 15, and to refinance a portion of a term credit facility. Pending that, they may be used for working capital and other general corporate purposes or temporarily invested.

The discount retailer is based in New York City.

Bemis offers two tranches

Packaging company Bemis priced $800 million notes in two tranches.

The $400 million of 5.65% five-year notes priced at Treasuries plus 325 bps.

A $400 million tranche of 6.8% 10-year notes priced at Treasuries plus 325 bps.

Bookrunners were J.P. Morgan Securities, Banc of America Securities, BNP Paribas Securities and Wells Fargo Securities.

Proceeds are going to help fund the $1.2 billion acquisition of Alcan Packaging Food Americas.

Bemis is based in Neenah, Wis.

Plains All American sells short bond

Oil and petroleum products company Plains All American Pipeline sold an upsized $500 million of 4.25% three-year senior notes at Treasuries plus 275 bps. Co-issuer was PAA Finance Corp.

The size was originally $300 million, a market source said.

Bookrunners were J.P. Morgan Securities, with BNP Paribas Securities and Wells Fargo Securities.

Proceeds are going to supplement capital available under a hedged inventory facility to fund working capital needs at the Houston-based company.

Market tone upbeat

The week began Monday with a decidedly upbeat tone, sources said, as several issuers jumped into the market early in the day.

"We were getting new deals announced left and right," a source said.

Although the week started off with a bang, the issuance volume is not likely to stay constant.

A market source said he wasn't sure why it was a popular day to issue Monday, but followed it by saying the coming days are "not as busy as today. We do have a pipeline."

Citigroup recently came out of earnings blackout, and it's possible other large banks will be coming to the market after the previous week's deluge of second-quarter announcements. Goldman Sachs Group Inc. preceded Citigroup in issuing.

Investors remain highly interested in investment-grade issues, a source said. Earnings blackouts left them grabbing at the few sales in the market.

"Last week left people still ready to invest," he said. "A lot [of deals] were oversubscribed. A lot of them were EM deals."

Wal-Mart reopens 30-year

Discount retailer Wal-Mart Stores reopened its 6.2% notes due 2038 to add $500 million, an informed source said.

The add on priced at a spread of Treasuries plus 130 basis points.

Following the sale, the total issue size issuance is $2 billion, including $1.5 billion priced April 8, 2008 at 188 bps over Treasuries.

It was a "no-growth sale," a source close to the sale said. Although it was popular with investors, it was overshadowed by the 30-year bond from Citigroup that was announced before it.

"Attention was elsewhere," the source said. "It slowed the books. They [Wal-Mart] got the size they went out with."

Bookrunners were Banc of America Securities, Citigroup Global Markets, Goldman Sachs & Co. and UBS Investment Bank.

The issuer is based in Bentonville, Ark.

GE Capital offers FDIC notes

GE Capital priced $750 million floating-rate notes due 2012 that are backed by the FDIC, according to an FWP filing with the Securities and Exchange Commission filing.

The notes priced at par to yield three-month Libor plus 0 bps.

The agent was Banc of America Securities.

The funding arm of General Electric is based in Fairfield, Conn.

Dolphin sets bond maturity

Dolphin Energy Ltd. set a maturity of 10-year for its bond offering, a market source said.

Initial guidance and further details are expected during the coming week.

BNP Paribas Securities and RBS Securities are bookrunners.

Dolphin Energy is 51% owned by Mubadala Development Co. of the Emirate of Abu Dhabi.

Eletrobras gives deal details

Centrais Eletricas Brasileiras SA announced a size of up to $1 billion for its sale of 10-year senior unsecured fixed-rate bullet notes, according to a statement.

A road show will be held on July 21 in London and on the U.S. west coast as well as New York and Boston on July 22.

Credit Suisse is bookrunner for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

Eletrobras is a Rio de Janeiro-based, government-owned power firm.

Bemis bonds jump in trading

The new Bemis 6.8% 2019 were vastly tighter in trading over their price late Monday, a trader said.

The bond priced at 325 bps over Treasuries, and were quoted at 285 bps bid, 280 bps offered late in the session, he said.

The huge move was chalked up to it being "priced too cheap," the trader said.

There was not a specific level available for the 5.65% tranche due 2014, although another source quoted them as being "in the 280s," or about the same as the 2019.

Citigroup bond improves

The new Citigroup 8.125% notes due 2039 were doing well once they hit the secondary late Monday, a trader in the financial sector said. The deal sold at Treasuries plus 380 bps and was trading at 360 bps bid, 355 bps offered late in the day.

The financial sector as a whole was improved.

"Everything was better across the board," the trader said. "I'd say things were 5 to 10 [bps] tighter."

Wal-Mart bond trades well

The reopened 6.2% bond due 2038 from Wal-Mart Stores was doing well in trading late Monday, a secondary source said.

It priced at 130 bps over Treasuries, and was quoted in trading at 123 bps bid, 118 bps offered, he said.

Plains bond firms

The new Plains All American 4.25% due 2012 was one of the best performers of the day's new deals, tightening 15 to 25 bps once it hit trading, a trader said.

The bond was at 260 bps bid, 250 bps offered late in the session, he said.

TJX bond comes in

The new bond from TJX Cos. held its own once freed for trading Monday, and was slightly tighter.

The 4.2% bond due 2012 was sold at 170 bps over Treasuries and was trading at 159 bps bid, 156 bps offered, a trader said.

Citigroup, CIT top trading

Bonds from Citigroup Inc. and CIT Group Inc. Income Fundings Trust sat atop most active lists in trading at early afternoon Monday, a trader said.

The floating-rate CIT bond, due in August, has been active since the small-business lender's economic woes hit headlines. Bond holders approved an emergency line of credit so the lender will not have to file for bankruptcy, according to news reports.

Citigroup's 8.5% due 2019 was at the top of trading. The financial's bonds have been heavily traded since it announced second-quarter earnings of $4.3 billion Friday. It also priced a new long bond on Monday.

CIT, financials lead movers

A bond from CIT, as well as several financial names, including Citigroup and Hartford Financial Services, were among the big movers by late Monday, a source said.

CIT's 5% bond due 2015 was nearly 150 bps better than a week ago when it seemed bankruptcy was around the corner.

Citigroup's 5.625% bond due 2012 was about 60 bps better than the previous week. Bonds from Bank of America Corp. and GE Capital made similar moves after last week's earnings announcements.

But Hartford Financial's 6% bond due 2019 was nearly 100 bps wider than a week ago.

Bank, broker CDS better

Bank and broker credit-default swaps were improved across the board in Monday's session, a trader said in late afternoon.

Bank names were 15 to 35 bps tighter on the day, he said. Citigroup was at the wide end of that, tightening 35 bps to 305 bps bid, 315 bps offered. The bank's CDS has "come in by over 100 [bps] over the last few days," the trader said.

Bank of America's CDS were in by 20 bps to 140 bps bid, 150 bps offered, while JPMorgan Chase & Co. was 10 bps better to 69 bps bid, 74 bps offered.

Brokerage names were collectively 15 to 20 bps tighter, the trader said. Goldman Sachs was in 15 bps to 113 bps bid, 123 bps offered.

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