Credit Suisse, ITT, Northern Trust, Potash Corp. sell bonds; spreads tighter; Potash trades up

By Andrea Heisinger and Paul Deckelman

New York, April 28 - The high-grade market somewhat returned to its busy self Tuesday, with new deals from Credit Suisse, Northern Trust Corp., ITT Corp. and Potash Corp. of Saskatchewan Inc.

Terms were released by BB&T Corp. which priced a two-tranche deal late Monday.

In the secondary sphere on Tuesday, a market source said the CDX Series 12 North American high-grade index was unchanged at a mid bid-asked spread level of 177 bps.

Advancing issues lost most of their previous eight-to-five lead over decliners, ending just slightly ahead of them.

Overall market activity, reflected in dollar volumes, was up over 35% from Monday's levels.

Spreads in general were seen tighter, in line with higher Treasury yields; for instance, the yield on the benchmark 10-year note rose by 10 bps to 3.01%.

Potash Corp. of Saskatchewan's new two-part bond issue was seen having firmed solidly when the new notes were freed for aftermarket dealings.

Conditions in the market had mostly recovered from the impact of Monday's news headlines.

Northern Trust prices $500 million

Multibank holding company Northern Trust sold $500 million of 4.625% five-year senior notes at Treasuries plus 275 bps.

The pricing came a day after the company announced in a press release that it was selling notes along with a common stock offering.

The deal sold at the tight end of price talk, which a source close to the deal said was the 287.5 bps area with a margin of plus or minus 12.5 bps.

"It was a solid deal," the source said. "It got done pretty quickly."

The sale was done early in the day, he added.

The Chicago-based company is using proceeds to redeem preferred stock and repurchase the warrant issued to the U.S. Treasury as a part of the Temporary Asset Relief Program.

Goldman Sachs & Co. and Morgan Stanley & Co. ran the books.

ITT sells $1 billion

A $1 billion sale of notes in two tranches by ITT Corp. was the object of high investor interest Tuesday, a source close to the sale said.

The deal was split between $500 million of 4.9% five-year notes priced at Treasuries plus 300 bps and $500 million 6.125% 10-year notes priced at 312.5 bps over Treasuries.

Both tranches came in at the tight end of guidance, the source said. Talk on the five-year notes was in the 312.5 bps area and on the 10-year notes was in the 325 bps area. Both had margins of plus or minus 12.5 bps.

"There was a lot of interest on it," the source said, "a lot of phone calls." Investor interest was so high that buyers were calling to inquire about the deal, he said.

"People like it because it's a kind of museum piece," he said. "They like to buy it and hold onto it because it's rare."

He was referring to this and other names that are infrequent issuers.

Bookrunners on the sale were Citigroup Global Markets and J.P. Morgan Securities.

Potash offers two tranches

Fertilizer company Potash Corp. of Saskatchewan sold $1 billion senior notes in two tranches Tuesday.

The $500 million of 5.25% five-year notes priced at Treasuries plus 337.5 bps, while the $500 million of 6.5% 10-year notes priced at Treasuries plus 350 bps.

Potash Corp. tapped Banc of America Securities LLC, HSBC Securities and RBC Capital Markets as bookrunners.

Proceeds are slated for purposes including repayment of outstanding debt under two revolving credit facilities maturing in 2010 and 2013.

The company is based in Saskatoon, Saskatchewan.

Credit Suisse sells five-years

Swiss financial services company Credit Suisse sold $2.25 billion of five-year senior notes through its New York branch.

The 5.5% notes priced at Treasuries plus 362.5 bps. Proceeds are going for general corporate purposes including refinancing of debt outside Switzerland.

Credit Suisse was bookrunner.

BB&T gives terms

BB&T sold $800 million of senior notes in two tranches late Monday, with the terms unavailable because of the time of pricing, sources close to the deal said. The terms were released Tuesday.

The $400 million of 5.7% five-year notes priced at Treasuries plus 385 bps, while the $400 million of 6.85% 10-year notes priced at Treasuries plus 395 bps.

Barclays Capital and J.P. Morgan Securities were bookrunners for the deal from the financial services company based in Winston-Salem, N.C.

The proceeds, like that of Tuesday's Northern Trust deal, are going toward purposes including helping fund the repurchase of preferred stock warrants issued to the Treasury as part of TARP.

Tone improves as fear subsides

Issuers began making their way back to the investment-grade market Tuesday after a drought of more than three weeks. The end of earnings season has, as predicted, led to an increase in new issues.

"It should be busy into May," a source said. "Then you have some more slow [months] because of summer and vacations."

As two issuers this week have proved, financial names are beginning to pay back TARP funds to the government and are selling bonds to partially finance it.

"They're finally able to do it," a syndicate source said. "No one wants to owe the government money."

There are "a few issues" expected for the remainder of the week, the source said. They will most likely price Wednesday or Thursday.

"Today was a good one," he said. "It's kind of back to normal."

Potash deal firms solidly

When the new Potash Corp. notes were freed for secondary dealings, a trader saw them immediately tighten up markedly.

A trader saw Potash's 5.25% notes due 2014 firming to a spread over comparable Treasuries on the break of 305 bps bid, 295 bps offered, well in from the 337.5 bps over level at which the company had priced its $500 million of notes.

The other part of that massive $1 billion mega-deal, Potash's $500 million of 6.50% notes due 2019, were also seen having tightened up nicely, to 310 bps bid, 306 offered. That's well in from the 350 bps over level at which the issue had priced earlier in the day.

A trader said that the new ITT deal had not yet freed for secondary dealings by late afternoon.

Toledo Edison continues to trade up

Among other recently priced offerings, a trader said that Toledo Edison Co.'s new 7¼% notes due 2020 continued to hold onto the gains which they notched after the Ohio-based regulated utility operator's deal priced last week.

He put the level at 383 bps bid, though with no offerings seen.

That was well in from the 437.5 bps spread at which the $300 million outlined when the deal priced on April 21.

Statoil Hydro firmer

A market source saw Norwegian energy operator Statoil Hydro ASA's 5.25% notes due 2019 at a spread of 193 bps. That was in by 20 bps from Monday's level of 213 bps, and in still further from the 245 bps bid at which the $1.5 billion of bonds priced on April 16.

The other half of that deal, the $500 million of 3.875% notes due 2014, which priced at 220 bps over, also on April 16, was not seen among the most active issues on Tuesday.

Bank, broker CDS costs widen

In the credit-default swaps market, a trader said that CDS costs to protect holders of big-bank paper against a possible default rose by 5 bps to 15 bps, as investors reacted to news stories indicating that federal regulators believe the big banks may have to raise more capital.

Meanwhile, debt-protection costs for holders of investment-bank paper widened by 5 bps to 25 bps.

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