New South Wales plans floaters; GE expected to reopen FDICs again; Plains tightens back up

By Paul Deckelman and Sheri Kasprzak

New York, Sept. 3 - Thursday proved to be a light day for primary market activity, with Australia's New South Wales Treasury Corp. unveiling plans for a floating-rate notes deal, while General Electric Capital Corp. - which has been a heavy issuer of notes guaranteed by the Federal Deposit Insurance Corp. -- was seen likely to again tap that particular well.

Among the established issues in the secondary arena on Thursday, a market source said the CDX Series 12 North American high-grade index was steady at a mid bid-asked spread level of 124 bps.

Advancing issues - which remained ahead of decliners for a seventh straight day on Wednesday - continued to hold a nine-to-eight advantage on Thursday.

Overall market activity, reflected in dollar-volume totals, fell about 12% from Wednesday's pace.

Spreads in general were seen a bit tighter, in line with higher Treasury yields; for instance, the yield on the benchmark 10-year note rose by 4 bps Wednesday to 3.34%.

The new Plains All-American Pipeline LP bonds continued their gyrations - after having widened on Wednesday, they were seen tighter on Thursday, despite no improvement in natural gas prices.

Meanwhile, the Republic Services Inc. bonds which priced on Monday were seen continuing to hold tighter levels.

The new U.S. Bancorp notes were seen slightly wider.

New South Wales in the market

The Australian state of New South Wales, though its financing agency, Sydney-based New South Wales Treasury Corp., announced plans to sell $150 million in floating-rate notes.

The issue will come to market through bookrunner J.P. Morgan Securities Inc., although it t couldn't be determined by press time Thursday when those notes will price.

Proceeds will be used for the state government's general operating expenses.

GE Capital back for more?

Apart from that, a sellside source reached during the afternoon, said he doesn't expect to see much moving for the remainder of the week -- "I'm not seeing much going on," - the market insider lamented. But he did say that more FDIC-backed notes may be on the horizon, particularly for GE Capital.

The Fairfield, Conn.-financing arm of industrial giant General Electric has been a heavy borrower of the three-year and under notes backed by the government agency's guarantee.

"I have heard that GE [Capital] may be adding more to its FDIC notes, but I'm not sure how much. I believe it's pricing early next week, but I don't have the full details yet. It's really hard to tell sometimes when these things price. It happens pretty fast."

U.S. Bancorp widens a bit

Also among the financial issues, a trader said that Wednesday's U.S. Bancorp offering of 2.125% notes due 2013 had widened out a little.

He quoted the $350 million issue - upsized from $250 million originally - at 90 bps bid, 85 bps offered.

The Minneapolis-based financial services company had priced those notes at 85 bps over comparable Treasuries.

Elsewhere in the sector, the trader saw things "generically unchanged - a little better here, a little weaker there. But net-net, it was pretty much unchanged.

"If there was a bias, it was to the positive - but nothing stood out, really."

Plains bonds narrow on session

A trader said that the new Plains All-American Pipeline 5.75% notes due 2020 which had priced Tuesday and then widened out on Wednesday, came back in on Thursday.

He saw those bonds at 240 bps bid, 236 bps offered.

That was in considerably from Wednesday's late levels of 278 bps bid, 272 bps offered, and even in from the 245 bps over level at which the Houston-based natural gas pipeline company's $500 million of bonds - upsized from $350 million originally -- had priced earlier Tuesday.

The bonds firmed despite continued deterioration in the natural gas markets. Gas futures fell in New York, hitting their lowest level since March 2002 after a government report showed stockpiles expanded more than average to a record for this time of year.

The Energy Department said that supplies rose 65 billion cubic feet in the week ended Aug. 28, to 3.323 trillion cubic feet - the highest for that week since the department began publishing data in 1993

Republic Services stays tight

Meanwhile, a trader said that Republic Services' 5.50% notes due 2019 were trading at 205 bps bid, 196 bps offered - in a little from 206 bps bid, 202 bps offered on Wednesday, and once more well inside the 220 bps over level at which the Phoenix-based solid waste disposal company had priced its $650 million of bonds - upsized from the originally planned $500 million -- on Monday.

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