Novartis, Amgen, Anadarko, ProLogis, RBS among IG issuers; new deals firm in busy trading day

By Andrea Heisinger and Cristal Cody

New York, March 9 - Novartis Capital Corp., Amgen Inc., Anadarko Petroleum Corp., TransAlta Corp., ProLogis, Georgia Power Co., Royal Bank of Scotland plc, American Honda Finance Corp. and Danske Bank were among the issuers on a packed Tuesday in the high-grade bond market.

It was the second day in a row with a large number of sales. Monday had nearly $13 billion in offerings, a source said, and more than $12 billion priced on Tuesday.

The most talked-about deal of the day came from Novartis Capital with its $5 billion sale in three tranches. The size was increased from $4 billion and included a $2 billion tranche of three-year notes, $2 billion of five-year notes and $1 billion of 10-year bonds.

Amgen sold $1 billion of notes split into two tranches. The deal was made up of $300 million of 10-year notes and $700 million of 30-year bonds.

Royal Bank of Scotland priced $2 billion of guaranteed five-year notes by late afternoon. They are backed by RBS Group plc.

Anadarko Petroleum was one of the first to price with a $750 million issue of 30-year bonds.

Southern Co. subsidiary Georgia Power also got its sale done early. The electric company priced an upsized $350 million of three-year floating-rate notes.

Vehicle financing company American Honda sold $1 billion of notes split evenly between three-year and five-year tranches.

Electric generation company TransAlta sold $300 million of 30-year bonds in a sale that a bookrunner described as "straightforward."

Denmark's Danske Bank sold $750 million of five-year notes later in the day.

The last deal to be priced was ProLogis, despite its being one of the first announced in the morning. The distribution center operator sold $1.1 billion, with $300 million of seven-year notes and $800 million in 10-year notes.

Nearly all of the day's sales priced in short order - even the large one from Novartis.

"I think a lot of these have been on the burner," a market source said.

Issuance is expected to slow down on Wednesday.

A second busy day in the primary led to a second active day for secondary trading, sources said.

Danske Bank, Royal Bank of Scotland, Novartis, American Honda Finance, Anadarko Petroleum and more all hit the secondary market on Tuesday.

Meanwhile on Tuesday, overall Trace volume rose 7% to about $12 billion, according to a market source.

In addition, the CDX Series 13 North American high-grade index was unchanged at a mid bid-asked spread level of 83 bps, a source reported.

Elsewhere, Treasuries were tighter on Tuesday after two days of showing weakness. For example, the yield on the 10-year Treasury note firmed 2 basis points to 3.70%, while the yield on the 30-year bond was 2 bps stronger at 4.67%.

Novartis unit upsizes

A funding unit of Novartis AG, Novartis Capital offered an upsized $5 billion of senior unsecured notes (Aa2/AA-) in three tranches in the afternoon, an informed source said.

The size was increased from an announced $4 billion.

A $2 billion tranche of 1.9% three-year notes sold at a spread of Treasuries plus 55 bps. They priced at the tight end of guidance in the range of 55 bps to 57 bps.

The tranche of $2 billion in 2.9% five-year notes priced at Treasuries plus 65 bps. Price talk was in the 67 bps area.

A third tranche of $1 billion in 4.4% 10-year notes priced at 78 bps over Treasuries. This was at the tight end of guidance in the 80 bps area.

The deal is guaranteed by the parent company.

This sale was similar to a $5 billion deal in two tranches done by two units of Novartis on Feb. 3, 2009. That sale was in five-year and 10-year tranches, both of which priced at a much higher spread of 225 bps than the notes priced on Tuesday.

Goldman, Sachs & Co. and J.P. Morgan Securities Inc. were active bookrunners for Tuesday's deal.

Proceeds will be used for intercompany finance purposes in connection with the pending acquisition of Alcon Inc. and for general corporate purposes.

The financing subsidiary of the pharmaceutical and health-care company is based in Basel, Switzerland.

American Honda offers two tranches

American Honda Finance offered $1 billion of notes (A1/A+) in two tranches by mid-afternoon, an informed source said.

The $500 million of 2.375% three-year notes priced at 100 bps over Treasuries. This was tighter than talk in the 110 bps area, the source said.

A $500 million tranche of 3.5% five-year notes sold at Treasuries plus 120 bps. This was also at the tightest end of guidance in the 130 bps area.

The deal was well oversubscribed, the source said.

Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the bookrunners.

The retail financing unit for Honda and Acura vehicles is based in Torrance, Calif.

Issuance window stays open

New deals continued to inundate the primary market as conditions remained favorable for the second day in a row.

"It was pretty crazy out there today," a source who worked on two of the sales said. "Everything went pretty smoothly."

Almost all of the deals had priced by 5 p.m. ET with the exception of the ProLogis sale.

"[I'm] not sure what the holdup on that is," a source said.

It's possible some of the offerings were in the works as early as the previous week, a syndicate source said.

A trend of highly oversubscribed deals continued with Amgen, American Honda, TransAlta and ProLogis, each of which were several times oversubscribed.

Three of those deals, as well as the three tranches from Novartis, also came in line with or - more commonly - at the extreme tight end of price guidance.

"I think everyone did a good job of looking at outstandings," a market source said. "Most of these names have issued but maybe not recently."

Several recent issues have come from names that are infrequent issuers, leading bookrunners to look at comparable bonds in the secondary market.

Those who worked on the day's offerings counted them a success, and there are expectations of more to come.

"[The market] is at a really good place now," a source said.

One syndicate source said he was on a call for a deal set to price on Wednesday. Other sources said they have bonds that could possibly price in the next couple of days.

ProLogis sells late

ProLogis sold $1.1 billion of senior notes (Baa2/BBB-/BBB) late in the day in two tranches after it was originally announced in a single tranche of 10-year notes, a source away from the sale said.

The $300 million of 6.25% seven-year notes sold at a spread of Treasuries plus 320 bps.

An $800 million tranche of 6.875% 10-year notes was also priced at Treasuries plus 320 bps.

The deal had about $3 billion on the books, the source said.

Bank of America Merrill Lynch, Citigroup, Goldman Sachs and RBS Securities Inc. were the bookrunners.

Proceeds from the notes and a concurrent convertible note offering will be used to repay borrowings under a global credit agreement.

The industrial distribution facility operator is based in Denver.

Amgen prices $1 billion

Biotechnology company Amgen offered $1 billion of senior unsecured notes (A3/A+/A) in two tranches, a source who worked on the sale said.

A $300 million tranche of 4.5% 10-year notes sold at 80 bps over Treasuries. This was at the tight end of guidance in the 85 bps area.

The $700 million of 5.75% 30-year notes priced to yield Treasuries plus 112.5 bps. The tranche priced in line with talk in the 112.5 bps area.

Bank of America Merrill Lynch, Barclays and Morgan Stanley & Co. Inc. ran the books.

Proceeds are being used for general corporate purposes by the Thousand Oaks, Calif.-based issuer.

TransAlta sells $300 million

TransAlta offered $300 million of 6.5% 30-year senior bonds (Baa2/BBB) to yield Treasuries plus 190 bps, a source close to the deal said.

It was one of the few deals not upsized prior to pricing.

The bonds were sold at the tightest end of guidance, which was initially in the "high 100 [bps] to 200 bps," the source said, and later revised to the 190 bps to 195 bps range.

There was "plenty of demand," he said, with about $1.3 billion on the books.

Citigroup, HSBC Securities and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used to repay borrowings under an existing credit facility and for general corporate purposes.

The electricity generation company is based in Calgary, Alta.

RBS sells guaranteed notes

Royal Bank of Scotland priced $2 billion of 4.875% five-year guaranteed senior notes (Aa3/A+/AA-) by late afternoon at Treasuries plus 260 bps, a market source said.

RBS Securities ran the books.

Proceeds are being used for general corporate purposes.

The retail banking subsidiary is based in Edinburgh.

Anadarko Petroleum sells

Anadarko Petroleum sold $750 million of 6.2% 30-year senior notes (Baa3/BBB-/BBB-) early in the afternoon to yield 155 bps over Treasuries, a source away from the deal said.

Goldman Sachs and UBS Investment Bank were active bookrunners.

Proceeds will be used to fund tender offers.

The oil and gas exploration and production company is based in the Woodlands, Texas.

Georgia Power upsizes

Electric company Georgia Power sold an upsized $350 million of three-year floaters (A2/A/A+) early in the day at par to yield Libor plus 32 bps, according to an FWP filing with the Securities and Exchange Commission.

The size was initially $250 million.

The bookrunners were Barclays and Morgan Stanley.

Proceeds are being used to repay $250 million of floating-rate notes due March 17, 2010, to repay a portion of short-term debt totaling $239 million and for general corporate purposes.

The subsidiary of Southern Co. is based in Atlanta.

Danske Bank offers notes

Danske Bank offered $750 million of 3.75% five-year notes on Tuesday at 148 bps over Treasuries, a source who worked on the sale said.

The notes (Aa3/A/A+) priced at 99.698 to yield 3.816%.

They were sold under Rule 144A and are non-callable.

Bank of America Merrill Lynch, Citigroup, Danske Bank Securities, Goldman Sachs and JPMorgan ran the books.

The financial services company is based in Copenhagen.

Premier Aircraft plans sale

Premier Aircraft Leasing (EXIM) 1 Ltd. announced on Tuesday that it is pricing $297.97 million of guaranteed secured notes due 2022, according to a preliminary prospectus.

The notes will have the guarantee of the Export-Import Bank of the United States.

They will be priced at par.

The bookrunners are Goldman Sachs and JPMorgan.

Proceeds are being used to finance or refinance a portion of the purchase price of aircraft acquired by the issuer or another lessor and/or for the exposure fee charged by the Export-Import Bank for its guarantee.

The issuer is based in Dublin. The Export-Import Bank of the United States supports the financing of goods and services and is based in Washington, D.C.

Danske Bank active

Danske Bank's five-year notes were seen trading in the secondary at 150 bps bid, 145 bps offered, according to one source

The $750 million of notes priced at Treasuries plus 148 bps.

Royal Bank of Scotland firms

Meanwhile, Royal Bank of Scotland's notes firmed to 258 bps bid, 255 bps offered in trading, a trader said.

The $2 billion of guaranteed notes due 2015 were sold at Treasuries plus 260 bps.

Novartis tightens

Also on Tuesday, Novartis' $5 billion of notes tightened in secondary trading.

The 1.9% notes due 2013 priced at Treasuries plus 55 bps and tightened initially 2 bps to 53 bps bid, no offers, in secondary trading, one source said.

Near the market close, the three-year notes were seen at 50 bps bid, 47 bps offered, a trader said.

Also, the 2.9% notes due 2015, which priced at Treasuries plus 65 bps, firmed to 63 bps bid, 59 bps offered, according to a source.

Later in the day, the notes tightened further to 60 bps bid, 57 bps offered, a trader said.

Lastly, the 4.4% notes due 2020 were sold at Treasuries plus 78 bps. The notes were not seen active in secondary trading until closer to market close, according to sources.

The 10-year notes were seen firmer at 71 bps bid, 70 bps offered.

Amgen tighter

Amgen's new $1 billion of senior notes the company sold earlier in the day in 10- and 30-year tranches tightened in trading, sources said.

The 4.5% notes due 2020 firmed to 76 bps bid, 71 bps offered in the secondary after pricing at Treasuries plus 80 bps, a source said.

The bids continued to tighten on the 10-year notes later in the day to 74 bps bid, 72 bps offered, according to one trader.

In addition, Amgen's 5.75% notes due 2040 also firmed to 108 bps bid, 102 bps offered. Amgen priced the notes at Treasuries plus 110 bps.

American Honda Finance firms

Also in trading on Tuesday, the new offering from American Honda Finance was seen firming, according to sources.

American Honda Finance priced $1 billion of notes due 2013 and 2015.

The 2.375% three-year notes priced at Treasuries plus 100 bps and tightened 5 bps to 95 bps bid, according to a source.

In addition, the bid on the 3.5% five-year notes firmed 5 bps to 115 bps bid in secondary trading, the source said. The notes priced at Treasuries plus 120 bps.

Anadarko slightly tighter

Elsewhere, Anadarko Petroleum priced $750 million of 6.2% 30-year notes at Treasuries plus 155 bps.

In trading, the notes firmed slightly to 154 bps bid, 153 bps offered, one trader said.

TransAlta bid wider

In addition on Tuesday, TransAlta priced $300 million 6.5% notes due 2040 to yield Treasuries plus 190 bps.

In secondary trading, the notes were quoted by one trader at 192 bps bid, 188 bps offered.

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