National Australia Bank, QVC price; W.P. Carey, Unum upsize; Verizon paper mixed in secondary

By Cristal Cody and Aleesia Forni

Virginia Beach, March 11 - Activity in the high-grade market slowed on Tuesday, as issuers including National Australia Bank, QVC Inc. and Western Gas Partners LP made their way to the primary.

National Australia Bank sold the largest sale of the day, bringing to market a $1.5 billion issue of senior notes in fixed- and floating-rate tranches due 2017.

There was a $500 million floating-rate note priced at par to yield Libor plus 37 basis points and a $1 billion 1.25% note priced at Treasuries plus 50 bps.

QVC sold a split-rated $1 billion of senior secured notes in five- and 10-year tranches on Tuesday.

A $400 million tranche of 3.125% notes due 2019 sold at Treasuries plus 155 bps, while a $600 million tranche of 4.85% notes due 2024 priced at Treasuries plus 210 bps.

Both tranches of the Rule 144A and Regulation S deal priced at the tight end of guidance.

Meanwhile, Western Gas Partners issued $500 million of senior notes in tranches due 2018 and 2044.

The company tapped its existing $250 million of 2.6% senior notes due Aug. 15, 2018 to add $100 million.

The add-on priced at 100.857 to yield Treasuries plus 78 bps.

Western Gas also priced a $400 million issue of 5.45% 30-year bonds with a spread of Treasuries plus 185 bps.

Potomac Electric Power Co. (Pepco) came to market with $400 million of 3.6% first mortgage bonds due 2024 priced with a spread of Treasuries plus 85 bps.

The notes sold at the tight end of talk.

Unum Group and W.P. Carey Inc. were both able to price upsized deals during Tuesday's session.

W.P. Carey sold $500 million of 4.6% senior notes due 2024 at Treasuries plus 187.5 bps.

The issue was upsized from $350 million.

Meanwhile, Unum priced an upsized $350 million issue of 4% 10-year notes at Treasuries plus 125 bps.

The deal's size was upped from $300 million.

Also on Tuesday, Agence Francaise de Developpement priced $1 billion of five-year notes at mid-swaps plus 34 bps.

The European Investment Bank set guidance for its planned dollar-denominated issue of seven-year notes in the area of mid-swaps plus 22 bps, according to a market source.

ANZ Banking Group Ltd. also joined the forward calendar on Tuesday, announcing plans to sell a Basel 3-compliant tier 2 offering of notes due 2024.

Roughly $5.2 billion of high-grade paper sold during Tuesday's session, bringing the week's total new issuance to more than $19 billion.

Supply is already closing in on earlier estimates of a $25 billion week.

Even with the flood of new issuance in recent weeks, market sources note that demand continues to be solid for new deals.

However, activity is expected to slow slightly as the week wears on.

"Don't think it will be like last week," one source said late Tuesday, referring to the previous week's nearly $47 billion of supply.

Bonds headed out flat to weaker in the secondary market following another strong day of corporate issuance, market sources said.

The Markit CDX North American Investment Grade series 21 index eased 1 bps to a spread of 64 bps.

Verizon Communications Inc.'s new notes (Baa1/BBB+/A-) climbed mostly higher in heavy activity, though the long bonds slipped in trading, according to a market source.

The company's paper brought in the $49 billion deal in September traded flat to slightly better over the day, a market source said.

NAB two-parter

National Australia Bank priced $1.5 billion of senior notes on Tuesday (Aa2//) in fixed- and floating-rate tranches due 2017, according to a market source.

The sale included $500 million of three-year floaters priced at par to yield Libor plus 37 bps.

A second tranche was $1 billion of 1.25% notes due 2017 sold at 99.985 to yield 1.255%, or Treasuries plus 50 bps.

National Australia Bank, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBC Capital Markets LLC were the joint bookrunners for the Rule 144A and Regulation S deal.

Melbourne, Australia-based National Australia Bank is the nation's largest lender.

QVC crossovers

QVC priced $1 billion of senior secured notes (Ba2/BBB-/BBB-) in tranches due 2019 and 2024, according to a market source and a company press release.

There was $400 million of 3.125% notes due 2019 priced at 99.828 to yield 3.162%, or Treasuries plus 155 bps.

A second tranche was $600 million of 4.85% notes due 2024, which sold with a spread of Treasuries plus 210 bps. Pricing was at 99.927 to yield 4.859%.

Both tranches sold at the tight end of guidance.

The notes will be secured by a first-priority lien on the capital stock of QVC.

Proceeds will be used to repay debt under the company's senior secured credit facility and for working capital and other general corporate purposes.

BofA Merrill Lynch is bookrunner for the Rule 144A and Regulation S notes.

The home shopping retailer is based in West Chester, Pa.

Agence Francaise de Developpement prices

Agence Francaise de Developpement priced $1 billion of five-year notes on Tuesday with a spread of mid-swaps plus 34 bps, according to an informed source and a company news release.

Pricing was at 99.597 to yield 2.086%.

BNP Paribas Securities Corp., Daiwa, Deutsche Bank Securities Inc. and Societe Generale were the joint bookrunners.

The issuer provides development and financing assistance to developing countries.

Western Gas new issue

Western Gas Partners priced $500 million of senior notes on Tuesday in two tranches, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company priced a $100 million add-on to its existing $250 million of 2.6% senior notes due Aug. 15, 2018.

Western Gas priced the add-on at 100.857 to yield 2.39%, or Treasuries plus 78 bps.

The total issue size is now $350 million.

There was also $400 million of 5.45% senior notes due 2044 priced at 98.443 to yield 5.557%.

The notes sold with a spread of Treasuries plus 185 bps.

RBS Securities Inc., Mitsubishi UFJ Securities Inc., Barclays, Citigroup Global Markets, Morgan Stanley & Co. LLC, U.S. Bancorp Investments Inc. and Societe Generale were the joint bookrunners.

Western Gas plans to use the net proceeds from the offering to repay amounts outstanding under its revolving credit facility and for general corporate purposes.

The midstream energy asset company is based in the Woodlands, Texas.

W.P. Carey upsizes

W.P. Carey was in Tuesday's market with an upsized $500 million issue of 4.6% senior notes due 2024, which sold at Treasuries plus 187.5 bps, according to a FWP filed with the SEC.

The notes (Baa2/BBB-/) priced at 99.639 to yield 4.645%.

The company intends to use proceeds from the offering for working capital and general corporate purposes.

JPMorgan, Citigroup Global Markets and Wells Fargo Securities LLC were the joint bookrunners.

New York-based W.P. Carey is a publicly traded real estate investment trust that provides long-term sale-leaseback and built-to-suit financing.

Pepco prices tight

Pepco priced $400 million of 3.6% 10-year first mortgage bonds with a spread of Treasuries plus 85 bps, according to a market source and an FWP filed with the SEC.

The notes (A2/A/A-) priced at 99.867 to yield 3.616%.

Pricing was at the tight end of talk.

JPMorgan, RBS Securities, Wells Fargo Securities, Citigroup Global Markets and Goldman Sachs & Co. were the joint bookrunners.

Proceeds will be used to repay the company's $175 million of 4.65% notes due April 15, 2014, and remaining proceeds will be used to repay its 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 $150 million sale of 30-year first mortgage bonds on Nov. 15 that priced with a 4.95% coupon and a spread of 115 bps.

Unum sells $350 million

Unum Group priced an upsized $350 million of 4% senior notes (Baa2/BBB/) due 2024 on Tuesday with a spread of Treasuries plus 125 bps, according to an informed source.

Pricing was at 99.853 to yield 4.018%.

The notes priced at the tight end of talk.

Proceeds from the sale will be used for general corporate purposes, which may include refinancing future bond maturities.

The joint bookrunners were JPMorgan, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities.

The employee benefits provider is based in Chattanooga, Tenn.

EIB sets guidance

The European Investment Bank announced price guidance for its planned dollar-denominated offering of seven-year notes on Tuesday in the area of mid-swaps plus 22 bps, according to a market source.

BNP Paribas Securities, Deutsche Bank Securities and JPMorgan are running the books.

The lender for the European Union is based in Kirchberg, Luxembourg.

ANZ Banking plans deal

ANZ Banking is planning to price a Basel 3-compliant tier 2 offering of notes due 2024, according to an informed source.

Citigroup Global Markets, Goldman Sachs and UBS Securities LLC are managing the sale.

The financial services company is based in Melbourne, Australia.

Verizon mixed

Verizon's short-dated notes brought on Monday traded higher, while the tranche of 20-year notes fell in the secondary market, a source said on Tuesday.

The company's 2.55% notes due 2019 headed out higher at 101.49. The issue priced in a $500 million offering on Monday at 99.88 to yield 2.561%.

Verizon's tranche of 4.15% notes due 2024 rose to 100.43. Verizon sold $1.25 billion of the 10-year notes at 99.838 to yield 4.17%.

The company's 5.05% notes due 2034, priced in a $1.25 billion offering on Monday at 99.925 to yield 5.056%, traded lower on the day at 99.88, the source said.

Verizon's notes from the September transaction traded flat to moderately better, a market source said.

The 2.5% notes due 2016 were unchanged on the day at 103.68. Verizon sold $4.25 billion of the notes at 99.923 to yield 2.527%.

The tranche of 5.15% notes due 2023 edged up to 108.33 from 108.03 on Monday.

Verizon sold $11 billion of the 5.15% notes due 2023 at 99.676 to yield 5.192%.

The company's 6.4% notes due 2033 slipped to 115.74 from 116.54 on Monday, down from a high of 119.31 on March 3, according to the market source.

Verizon sold $6 billion of the notes at 99.9 to yield 6.409% in the Sept. 11 transaction.

The telecommunications company is based in New York City.

Bank/brokerage CDS rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 2 bps to 66 bps bid, 70 bps offered. Citigroup Inc.'s CDS costs rose 2 bps to 77 bps bid, 81 bps offered. JPMorgan Chase & Co.'s CDS costs widened 2 bps to 60 bps bid, 64 bps offered. Wells Fargo & Co.'s CDS costs eased 1 bp to 40 bps bid, 44 bps offered.

Merrill Lynch's CDS costs eased 2 bps to 68 bps bid, 72 bps offered. Morgan Stanley's CDS costs rose 2 bps to 89 bps bid, 92 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 3 bps to 94 bps bid, 98 bps offered.

Paul Deckelman contributed to this review.

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