Financials crowd primary as Toyota Credit, BNP Paribas, ANZ price; Masco bonds, CDS widen

By Andrea Heisinger and Cristal Cody

New York, Jan. 5 - ANZ Banking Group Ltd., Toyota Motor Credit Corp., Tyco International Finance SA, Orix Corp., Landwirtschaftliche Rentenbank, Plains All American Pipeline LP and PAA Finance Corp., KfW, BNP Paribas and Schlumberger SA sold investment-grade paper on Wednesday.

One of the largest corporate sales came from Toyota Motor Credit with its $1.6 billion in two tranches. Both parts priced at the tight end of guidance.

Oilfield services company Schlumberger also priced $1.6 billion of notes. The deal was split among three tranches, including two with 10-year maturities and identical terms but with slightly different amounts.

A late sale came from Australia-based ANZ Banking Group. The financial sold an upsized $3 billion in three tranches under Rule 144A.

Plains All American sold $600 million of 10-year notes at the tight end of guidance, a source said. Another corporate in the market was Tyco International Finance with $500 million split evenly between seven-and-12-year maturities.

Germany's lender to the agriculture industry, Rentenbank, priced $1 billion of 2.5% five-year notes early in the day.

Another German sovereign-backed issuer, KfW, priced $5 billion of three-year global notes in short order.

France's BNP Paribas priced a $1 billion deal of three-year floaters in line with guidance.

Japanese joint stock and financial services company Orix priced $400 million of five-year notes.

There is at least one deal expected for Thursday, from Sumitomo Mitsui Financial Group. The sale does not have a set size yet, but will include tranches of three- and five-year notes.

The flood of paper from banking and sovereign names isn't unexpected, a source said.

"I think with earnings coming up, from the banks anyway, we'll probably see more," he said.

The market wasn't necessarily better or worse than the previous two days of the week, but encouraging sales from some issuers led others to tap the market.

"Everything has been pretty much oversubscribed so that's good," a syndicate source said.

Crowding in the primary market, especially on Tuesday, led to some issuers questioning why their deals weren't more oversubscribed, the source said.

"That's what happens when everyone jumps into the market at once," they said.

In trading, overall investment-grade Trace volume was strong a second day, rising about 7% to nearly $18 billion, according to a market source.

In the secondary market, the new paper from Tyco International Finance and Toyota Motor Credit firmed slightly, traders said.

The 10-year notes from Plains All American Pipeline/PAA Finance firmed 10 basis points on the bid side in trading, a source said.

Also in trading, Masco Corp.'s bonds and credit default swaps widened on Wednesday, a source said.

In other data, the Markit CDX Series 14 North American investment-grade index eased 1 basis point to a spread of 83 bps, according to Markit Group Ltd.

Government bonds fell after a stronger than expected private employment report from ADP Employer Services showed private employers added 297,000 jobs in December, nearly triple the forecast.

The yield on the 10-year benchmark note jumped to 3.46% from 3.33%. The 30-year bond yield hit 4.54% from 4.41% the previous day.

ANZ upsizes to $3 billion

ANZ Banking Group sold an upsized $3 billion of notes (Aa1/AA) in three parts late in the day, an informed source said.

The size was increased from $2.75 billion, with the three-year floating-rate tranche upsized by $250 million.

That $1 billion tranche of three-year floaters priced at par to yield three-month Libor plus 74 bps. That was tighter than talk in the Libor plus 80 bps area.

The second tranche was $1 billion of 2.125% three-year notes sold at a spread of Treasuries plus 102 bps. It priced at the tight end of guidance in the 105 bps area.

A final part was $1 billion of 4.875% 10-year notes priced at Treasuries plus 145 bps. It priced tighter than whispered talk in the 150 bps area and at the tight end of revised talk in the range of 145 to 150 bps.

The deal was done under Rule 144A.

Citigroup Global Markets Inc., ANZ Securities and Bank of America Merrill Lynch were bookrunners.

The financial services company is based in Melbourne, Australia.

Plains offers 10-year notes

Plains All American Pipeline and PAA Finance sold an upsized $600 million of 5% 10-year notes (Baa3/BBB-) at a spread of Treasuries plus 160 bps, a market source said.

They sold at the tight end of guidance in the 165 bps area. The deal was highly oversubscribed with about $2.5 billion on the books, a source said. This was partly why the sale was increased from $400 million.

"There was a lot of demand for it," the source said.

Bookrunners were J.P. Morgan Securities Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC.

Proceeds are going to repay outstanding borrowings under a credit facility and for general partnership purposes.

In the secondary market, the notes due 2021 firmed 10 bps on the bid side to 150 bps bid, 145 bps offered, traders said.

"Not a ton [of activity]," one trader said. "Only a couple of big players in it so far."

The company handles the transportation and storage petroleum products and is based in Houston.

Schlumberger sells two 10-year tranches

Schlumberger SA, Schlumberger Norge SA, and Schlumberger Oilfield UK plc jointly priced $1.6 billion of notes (A1/A+) late in the day in three parts, a source who worked on the deal said.

The $500 million of 2.65% five-year notes priced at a spread of Treasuries plus 55 bps. This was at the tight end of talk in the 60 bps area.

A $500 million tranche of 4.2% 10-year notes sold at a spread of 75 bps over Treasuries. The tranche also priced at the tight end of guidance in the 80 bps area.

There was a second $600 million tranche of 10-year notes with identical terms, sold as a separate piece for tax reasons.

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

Proceeds are going toward general corporate purposes including restructuring efforts following the company's recent acquisition of Smith International.

The tranche of notes due 2016 tightened in secondary trading to 48 bps bid, 46 bps offered, a trader said.

The notes due 2021 were firmer in the secondary market at 69 bps bid, 67 bps offered.

The sale is guaranteed by oilfield services company Schlumberger Ltd., which is based in Houston.

Toyota's $1.6 billion

Toyota Motor Credit priced $1.6 billion of notes (Aa2/AA) in two parts, an informed source said.

The $900 million tranche of 2.8% five-year notes priced at a spread of Treasuries plus 70 bps. They came at the tight end of guidance in the range of 70 to 72 bps, a source said.

The second part of the sale was $700 million of 4.25% 10-year notes priced at a spread of 80 bps over Treasuries. This tranche also priced at the tight end of talk in the 80 to 82 bps range.

Bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

In the secondary market, Toyota Motor Credit's notes due 2016 were seen 3 bps tighter on the bid side, a trader said.

The notes due 2021 also were firmer on the bid side at 77 bps, the trader said.

The U.S. funding arm of car maker Toyota is based in Torrance, Calif.

BNP Paribas sells floaters

BNP Paribas priced $1 billion of three-year floating-rate notes late on Wednesday at par to yield three-month Libor plus 90 basis points, a market source said.

They priced in line with talk whispered in the mid-swaps plus 85 to 90 bps range and revised guidance in the Libor plus 90 bps area.

The notes (Aa2/AA) are non-callable.

BNP Paribas Securities Corp. was the bookrunner.

The banking group is based in Paris.

Orix prices five-years

Japan's Orix priced $400 million of 5% five-year senior notes (A3/A-) to yield Treasuries plus 290 bps, according to an FWP filing with the Securities and Exchange Commission.

They priced in line with whispered guidance in the high 200 bps and revised talk in the 290 bps area, a source said.

UBS Securities LLC, Morgan Stanley & Co. Inc., Nomura Securities International Inc. and Citigroup Global Markets Inc. were active bookrunners.

Proceeds are being used for general corporate purposes.

The joint stock and financial services company is based in Tokyo.

Tyco sells two tranches

Tyco International Finance sold $500 million of senior notes (Baa1/A-) in two tranches by late afternoon, a syndicate source away from the sale said.

The $250 million of 3.75% seven-year notes priced at a spread of 95 bps over Treasuries. The tranche priced tighter than revised talk in the 105 bps area, a source said.

The second part of the deal was $250 million of 4.625% 12-year notes sold at a spread of 125 bps over Treasuries. These notes also priced tighter than revised guidance in the 135 bps area.

Bank of America Merrill Lynch and Morgan Stanley & Co. Inc. were bookrunners.

Proceed are going to fund the repayment of the company's outstanding 6.75% notes due in February 2011.

The sale is guaranteed by Tyco International Ltd.

The notes due 2018 firmed slightly in the secondary market to 93 bps bid, 88 bps offered and were seen later at 91 bps bid, 90 bps offered, traders said.

The tranche of notes due 2023 traded at 122 bps bid, 117 bps offered.

"The new Tyco paper is a little bit better," one trader said.

Tyco is a diversified manufacturer based in Princeton, N.J.

KfW prices $5 billion

Germany's KfW sold $5 billion of 1.375% three-year global notes (Aaa/AAA/AAA) to yield 36.5 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and RBC Capital Markets Corp. were bookrunners.

The government-owned development bank is based in Frankfurt.

Rentenbank's five-year

Germany's Rentenbank sold $1 billion of 2.5% five-year notes (Aaa/AAA) at a spread of 46.85 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

Deutsche Bank Securities Inc., Goldman Sachs & Co. and UBS Ltd. were bookrunners.

The agricultural lender is based in Frankfurt.

Sumitomo plans two-part deal

Japan's Sumitomo Mitsui Financial Group is planning a sale of notes (Aa2/A+) with maturities of three and five years, a syndicate source said.

The three-year notes are talked in the 90 bps area and the five-year notes in the 105 bps area.

Citigroup Global Markets Inc., Barclays Capital Inc., Goldman Sachs & Co. International and J.P. Morgan Securities Inc. are bookrunners.

The banking and financial company is based in Tokyo.

Masco weaker

Split-rated Masco's bonds and credit default swaps widened on Wednesday, a source said.

"Masco was down about a point, their CDS was 15 wider," the source said. "It seemed like all building material companies underperformed today."

Taylor, Mich.-based Masco is a home improvement and building product installer in North America and Europe.

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