Enterprise Products, Viacom, Nissan among full slate of issues; Vepco notes firm; Avon active

By Aleesia Forni and Andrea Heisinger

New York, March 11 - Utility and energy names flooded the high-grade bond market on Monday, including Enterprise Products Operating LLC, DCP Midstream Operating, LP, Virginia Electric & Power Co., Potomac Electric Power Co. and Kansas City Power & Light Co.

Other offerings were priced by Maxim Integrated Products, Inc., Viacom Inc. and Nissan Motor Acceptance Corp.

Enterprise Products had the largest corporate sale, pricing $2.25 billion of bonds due 2023 and 2043.

Entertainment company Viacom priced $550 million of notes due 2023 and 2043. The size of the trade was increased from $500 million.

Nissan Motor Acceptance priced $1 billion of notes due 2016 and 2018 under Rule 144A and Regulation S.

The sale garnered about $3.1 billion of demand, a source said. There was just under $1.5 billion on the books for the three-year notes initially, and that dropped to about $1.4 billion after the price guidance was tightened.

The five-year tranche saw just under $1.7 billion of demand, the source said.

"It was definitely name recognition on this one," he said.

DCP Midstream Operating tapped the market for $500 million of 10-year senior notes that are guaranteed by DCP Midstream Partners, LP.

Potomac Electric Power offered $250 million of 30-year mortgage bonds, Kansas City Power sold $300 million of 10-year senior notes, and Virginia Electric & Power priced $500 million of 10-year notes.

Analog circuit maker Maxim Integrated Products priced $500 million of 10-year senior notes.

There was a $500 million sale of one-year floating-rate notes from Toyota Motor Credit Corp.

Sovereign names were in Monday's primary as well.

The Bank of England priced $2 billion of three-year notes early in the day. Terms of the trade were not available at press time.

Germany's KfW priced $1 billion of three-year notes.

Bank Nederlandse Gemeenten announced plans to tap the market for a benchmark size offering of five-year notes via Rule 144A and Regulation S. Pricing is expected on Tuesday.

There were two new offerings announced in the preferred stock market during Monday's session.

Pebblebrook Hotel Trust and Taubman Centers Inc. each announced share sales.

Taubman sold $150 million of series K cumulative preferreds. The size was increased from $75 million.

A trader saw a less 70 bid for paper in the midday gray market.

Pebblebrook announced an offering of series C cumulative preferreds.

The flow of smaller sales from industrial names is expected to continue on Tuesday, a market source said late in the day.

"I know we've done some calls," the source added. "We'll probably have some financials in the next couple of days."

The Markit CDX Series 18 North American Investment Grade index tightened 1 basis point to a spread of 80 bps on Thursday.

There was a "positive tone to the market" on Monday "as we continue to grind higher," one trader said at the session's close.

Spreads in the telecommunication and technology sector were trading 2 bps to 5 bps better on the day, the source added.

Avon Product Inc.'s recent issue was among the day's most actively traded deals.

The company's notes due 2023 were trading 18 bps better compared to levels seen Friday.

In other trading, Virginia Electric & Power's 10-year notes were trading 2 bps better on the day.

Investment-grade bank and brokerage credit default swaps costs were unchanged to tighter on Monday.

Bank of America's CDS costs were 3 bps tighter at 108 bps bid, 112 bps offered. Citi's CDS costs were also 3 bps tighter at 97 bps bid, 101 bps offered. J.P. Morgan's CDS costs were unchanged at 72 bps bid, 76 bps offered. Wells Fargo's CDS costs were also unchanged at 64 bps bid, 68 bps offered.

Merrill Lynch's CDS costs were 2 bps tighter at 95 bps bid, 102 bps offered. Morgan Stanley's CDS costs were unchanged at 126 bps bid, 131 bps offered. Goldman Sachs' CDS costs were also unchanged at 119 bps bid, 124 bps offered.

Nissan sells $1 billion

Nissan Motor Acceptance sold $1 billion of notes (A3/BBB+/) in two maturities during the day's session, a market source said.

There was $600 million of 1% three-year notes sold at a spread of Treasuries plus 65 bps. Guidance was initially in the 85 bps area.

A $400 million tranche of 1.8% five-year notes was priced at 95 bps over Treasuries. There was initial talk in the 110 bps area.

Pricing was done under Rule 144A and Regulation S.

Bookrunners were Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

The financing and leasing company for Nissan vehicles is based in Irving, Texas.

Enterprise Products tranches

Enterprise Products Operating sold $2.25 billion of senior notes (Baa1/BBB+/BBB) in two parts, according to an FWP with the Securities and Exchange Commission.

The $1.25 billion of 3.35% 10-year notes priced at a spread of Treasuries plus 130 bps.

A $1 billion tranche of 4.85% bonds due 2044 sold with a spread of 160 bps over Treasuries.

Bookrunners were J.P. Morgan Securities LLC, DNB NOR Markets Inc., Morgan Stanley & Co. LLC, RBS Securities Inc., Scotia Capital (USA) Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay debt, including amounts outstanding under a multi-year revolving credit facility and commercial paper program, amounts outstanding on the maturity of its $400 million principal amount of series M senior notes, $237.6 million principal amount of series U senior notes and $12.4 million principal amount of TEPPCO senior notes, each due in April; and for general company purposes.

The sale is guaranteed by Enterprise Products Partners LP.

The midstream energy services provider is based in Houston.

Viacom prices tight

Viacom priced $550 million of senior notes (Baa1/BBB+/BBB+ in two maturities, a market source said.

The size was increased slightly from $500 million.

A $300 million tranche of 3.25% 10-year notes sold at a spread of Treasuries plus 130 bps. Pricing was tighter than talk in the 145 bps area.

There was also $250 million of 4.875% 30-year bonds priced at Treasuries plus 165 bps. Pricing was 10 bps tighter than guidance in the 175 bps area.

Bookrunners were BNP Paribas Securities Corp., Goldman Sachs & Co. and J.P. Morgan Securities LLC.

Proceeds are being used for general corporate purposes, including repayment of borrowings under a commercial paper program, and the repurchase of shares under a share repurchase program.

Viacom last tapped the U.S. bond market with a $250 million sale of 4.375% 30-year bonds priced at 178 basis points over Treasuries on Nov. 16, 2012.

The entertainment company is based in New York City.

Vepco sells 10-years

Virginia Electric & Power was in the day's session with a $500 million sale of 2.75% 10-year senior notes (A3/A-/A-) priced at 73 bps over Treasuries, according to an FWP filing with the SEC.

The notes traded 2 bps better at 71 bps bid, 69 bps offered near the day's close.

Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and UBS Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes, including repayment of short-term debt.

The electric utility is based in Richmond, Va.

Pepco's $250 million deal

Potomac Electric Power priced $250 million of 4.15% 30-year first mortgage bonds (A3/A/A) at a spread of Treasuries plus 90 bps, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Scotia Capital (USA) Inc.

Proceeds are being used to repay outstanding commercial paper and for general corporate purposes.

Potomac Electric, a utility based in Washington, D.C., was last in the U.S. bond market with a $200 million sale of 10-year notes on March 28, 2012.

Maxim prices $500 million

Maxim Integrated Products was in the market with a $500 million sale of 3.375% 10-year senior notes (Baa1/BBB+/) priced at Treasuries plus 145 bps, a market source away from the trade said.

Bookrunners were Goldman Sachs & Co. and J.P. Morgan Securities LLC.

Proceeds are being used to repurchase common stock shares and for general corporate purposes.

The maker of analog circuits is based in San Jose, Calif.

DCP's 10-years

DCP Midstream Operating was in the market with a $500 million sale of 3.875% 10-year senior notes (Baa3/BBB-/BBB-) priced at 198 bps over Treasuries, a market source said.

The sale is guaranteed by DCP Midstream Partners, LP.

Active bookrunners were RBC Capital Markets LLC, RBS Securities Inc. and SunTrust Robinson Humphrey Inc.

Proceeds are being used to fund a cash portion of the purchase price of the Eagle Ford transaction and related expenses.

The unit of DCP Midstream LLC is a Denver-based joint venture between Spectra Energy and ConocoPhillips.

KC Power's $300 million

Kansas City Power & Light sold $300 million of 3.15% 10-year senior notes (Baa2/BBB/) to yield 110 bps over Treasuries, according to an FWP filing with the SEC.

BNP Paribas Securities Corp., BofA Merrill Lynch and Mitsubishi UFJ Securities (USA) Inc. were bookrunners.

Proceeds will be used to repay all or a portion of the company's outstanding commercial paper and for general corporate purposes.

The electric utility is based in Kansas City, Mo.

KfW's short bond

Germany's KfW priced $1 billion of 0.375% two-year notes (Aaa/AAA/AAA) to yield mid-swaps minus 3 bps, a market source said.

Pricing was in line with guidance in the mid-swaps minus 3 bps area.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Nomura Securities International Inc. were bookrunners.

The sale is guaranteed by the Federal Republic of Germany.

The German government-owned development bank is based in Frankfurt.

Toyota does floater

Toyota Motor Credit sold $500 million of one-year floating-rate notes (Aa3/AA-/) at par to yield Federal Funds rate plus 15.5 bps, according to an FWP filing with the SEC.

Agent was Deutsche Bank Securities Inc.

The funding arm of Toyota is based in Torrance, Calif.

BNG talks five-years

Bank Nederlandse Gemeenten announced a benchmark size sale of five-year notes (Aaa/AAA/AAA) to be sold via Rule 144A and Regulation S on Tuesday, an informed source said.

Initial price guidance is in the mid-swaps plus high 30 bps area, the source said. The size, while announced at a minimum of $500 million, is likely to be "$1 billion plus," the source added.

Bookrunners are Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and RBC Capital Markets LLC.

The local government funding agency is based in The Hague, the Netherlands.

Pebblebrook's $25-pars

Pebblebrook Hotel Trust intends to sell series C cumulative redeemable preferred shares, according to a prospectus filed with the Securities and Exchange Commission.

Raymond James & Associates Inc. and Citigroup Global Markets Inc. are the joint bookrunners.

The company will apply to list the new preferreds on the New York Stock Exchange under the ticker symbol "PEBPC."

Proceeds from the offering will be contributed to the operating partnership, which will then use the funds for general corporate purposes, including acquiring and investing in hotel properties and reducing debt.

Pebblebrook is a Bethesda, Md.-based real estate investment trust focused on hotel management.

Taubman does preferreds

Taubman Centers priced $150 million of 6.25% series K cumulative redeemable preferred stock, the company said in an FWP filing with the SEC.

Price talk was around 6.25%, according to a trader. The size was increased from $75 million.

Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC were bookrunning managers.

The Bloomfield Hills, Mich.-based real estate investment trust intends to list the new securities on the New York Stock Exchange under the ticker symbol "TCOPK."

Proceeds will be used to reduce borrowings under a 41.65 billion revolving line of credit.

Avon notes active

Market sources noted that Avon Products' recent notes were trading actively during Monday's session.

The $500 million 5% notes due 2023 were quoted 18 bps tighter at 290 bps bid, 280 bps offered.

The notes sold at a spread of 312.5 bps over Treasuries on Thursday.

Avon Products is a New York-based beauty products company.

Stephanie N. Rotondo contributed to this review

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