WellPoint, Asian Development Bank sell bonds; foreign banks on tap; Hess, ConocoPhillips strengthen

By Andrea Heisinger

New York, Feb. 2 - WellPoint Inc. and Asian Development Bank both sold bonds in the investment-grade market Monday to kick off a week that is expected to be busy.

Total issuance for the week is expected to be on par with the previous week's total, although more deals are likely but in smaller amounts, sources said.

Recent and new bonds were seen firming or unchanged in the secondary. Energy companies Hess Corp. and ConocoPhillips held on to gains in trading and were seen selling at high volume a few days after pricing.

WellPoint prices two tranches

Health benefits company WellPoint priced $1 billion of notes in two tranches.

The $400 million of 6% five-year notes priced at 99.809 to yield 6.044%, or Treasuries plus 432 basis points.

The $600 million of 7% 10-year notes priced at 99.840 to yield 7.022%, also at Treasuries plus 432 bps.

As many issues have in recent weeks, the notes carry a change-of-control put of 101%.

Banc of America Securities LLC and Deutsche Bank Securities Inc. ran the books.

The issue priced tighter than talk, a source close to the deal said.

He also said it was "definitely oversubscribed."

ADB sells $1 billion

The Asian Development Bank priced $1 billion 2.125% three-year global floating-rate bonds at 99.779 with a coupon of three-month Libor plus 25 bps.

Bookrunners for the AAA-rated issue were UBS Investment Bank, Daiwa Securities, Goldman Sachs & Co. and Morgan Stanley & Co., Inc.

Swedbank, KfW plan offerings

Two foreign, AAA-rated lenders are planning bond issues, a market source said Monday.

Sweden's Swedbank and Germany's KfW are planning short-dated issues of notes.

The Swedbank offering is of bonds due 2012, the source said, with Goldman Sachs & Co., J.P. Morgan Securities Inc. and Merrill Lynch as bookrunners.

KfW is planning notes due 2011, with bookrunners Goldman Sachs, Merrill Lynch and RBC Capital Markets.

Neither issue appeared to have priced by late Monday, the source said. They are likely being sold overnight, another source said.

Week opens on good note

Although there wasn't an avalanche of new deals Monday, there were enough to show the tone was good.

A source close to the WellPoint deal said there was a lot of focus on it because it was essentially the only game in town for new deals.

"There was a sovereign," he said, referring to the ADB issue, "but we were definitely focused on this [WellPoint] deal today."

He said issues in general "continued to tighten from official guidance" and were also doing well in trading.

"There continues to be strong demand," he said of the market for investment-grade corporate paper.

The rest of the week should be fairly active, a market source said, citing the success of the WellPoint issue and the performance of most of last week's deals in the secondary.

"They've all been tightening pretty much," he said. "I think the next couple days will be active."

Citi reopens two issues

Citigroup Funding Inc. gave terms in Securities and Exchange Commission filings for two note reopenings that priced Friday. Both were tranches of a $12 billion issue of notes backed by the Federal Deposit Insurance Corp. that the financial services company priced.

An issue of floating-rate notes due 2012 was reopened to add $250 million.

The notes priced at 100.1041 with a coupon of three-month Libor plus 33 bps.

With the add-on, the 2012 notes total $2.15 billion, including $1.9 billion issued Jan. 30.

The second reopening consisted of floaters due 2010.

The floaters priced at 100.0678 with coupon of three-month Libor plus 10 bps.

The total for the floaters is now $3 billion, including $2.25 billion issued Jan. 30.

Citigroup Global Markets Inc. was the bookrunner for both reopenings.

WellPoint bond in slightly

One of the tranches of the new WellPoint issue was seen slightly tighter soon after pricing.

A trader said the bonds due 2019 were seen at 430 bps bid, in a couple of basis points from the 432 bps pricing level.

There was no trading level for the tranche due 2014, the trader said.

Verizon Wireless bonds tighten

The Cellco Partnership d/b/a Verizon Wireless Capital LLC bonds priced Friday under Rule 144A were seen slightly tighter in afternoon trading Monday.

The 5.25% bonds due 2012 were at 400 bps bid, 380 bps offered, in 5 bps to 15 bps from pricing at Treasuries plus 405 bps.

The 5.55% bonds due 2014 were at 380 bps bid, 377 bps offered, in about 10 bps from 390 bps over Treasuries.

Recent General Mills strong

The 5.65% bonds due 2019 from General Mills, Inc. were stronger late Monday, with a trader seeing them at 255 bps bid, in from the Treasuries plus 287.5 bps pricing.

AT&T bonds unchanged

The recent three-tranche issue from AT&T Inc. was unchanged to slightly tighter late Monday, a trader said.

All of the five-, 10- and 30-year notes were seen at 300 bps bid, 290 bps offered, which was much the same as the 300 bps over Treasuries pricing level.

Energy bonds do well

Recent deals from Hess and ConocoPhillips were seen trading significantly tighter than pricing and were also topping the list of bonds by volume.

A trader said it may have had something to do with the recent announcement from ExxonMobil of record earnings for 2008.

The new two-tranche issue from Hess was seen doing well in trading.

A trader said the 7% notes due 2014 were at 496 bps bid, 492 bps offered, in more than 30 bps from the 530 bps pricing level.

The 8.125% bonds due 2019 were at 483 bps bid, in nearly 60 bps from the 540 bps price.

ConocoPhillips' issue priced in three tranches, two of which were tighter, while one was unchanged to a little wider. All three tranches priced at 295 bps over Treasuries.

The 4.75% notes due 2014 were at 275 bps bid, a trader said. They were doing the best of the tranches.

The 5.75% notes due 2019 were at 297 bps bid, 293 bps offered.

The 6.5% bonds due 2039 were in slightly to 293 bps offered.

ConocoPhillips' five- and 10-year notes topped the trading volume list early Monday afternoon.

The 30-year notes were also seen high on the list.

The Hess 10-year notes were also trading well, landing right behind the two Conoco tranches.

Bank, broker CDS little changed

Bank and broker credit-default swaps were seen mostly unchanged to a touch wider late Monday afternoon.

A trader said bank CDS were unchanged to 5 bps wider, while brokers were unchanged from Friday's levels.

Sierra Pacific, AmEx big movers

Outstanding bonds from Sierra Pacific Power and American Express were two of the day's big movers late Monday.

Sierra Pacific's 5.45% bonds due 2013 were doing well, tightening about 50 bps from last week's level to 391 bps.

American Express' 6.15% notes due 2017 were at 419 bps, widening more than 60 bps from the previous week.

This plunge came as the credit card company was in the headlines for monitoring cardholders' credit statements, and after it released its earnings last week.

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