MetLife, Corning, Teck, ANZ among sellers in packed market; secondary weaker on new bonds

By Andrea Heisinger and Cristal Cody

New York, Aug. 3 - MetLife Inc., Corning Inc., Public Service Electric & Gas Co., Eksportfinans ASA, Teck Resources Ltd., Macquarie Group and ANZ National (International) Ltd. priced bond deals Tuesday as the hectic pace of issuance continued in the high-grade bond market.

The day had as many deals as Monday when $11.5 billion in new bonds priced, but Tuesday's total was about $7.5 billion because several were less than $1 billion.

The MetLife deal was the largest of the day and tied Citigroup Inc. for the largest of the week so far, at $3 billion. The deal was initially in three parts, with a small tranche of floaters added, but the size remained the same. The remainder of the issue was in maturities of 2014, 2021 and 2041. The MetLife issue priced late in the day due to its size and complexity, a source said.

A split-rated deal was also done by offshore drilling contractor Pride International, Inc. The company sold $1.2 billion in two tranches.

PSE&G was one of the first to price its offering of $250 million in 10-year notes. The notes priced in line with talk and were oversubscribed.

Corning priced its two tranches totaling $700 million by mid-afternoon.

One of the only foreign deals of the day came from Eksportfinans. The Norway-based export lender sold $200 million in floating-rate notes due 2012 early in the day.

Another foreign name in the market was ANZ National, which priced a $1 billion offering of five-year notes under Rule 144A.

Teck Resources priced its $750 million deal in tranches of seven-year notes and 30-year bonds. Both priced tighter than guidance.

And Australia's Macquarie Group priced $500 million of seven-year notes in the afternoon, after announcing the sale late.

New issues tighten

The bonds that Teck Resources, Corning and Public Service Electric & Gas priced earlier in the day all were tighter in secondary trading, but the spate of new deals on Monday and Tuesday may be taking its toll on the secondary market, sources said.

"Secondary seemed a bit weaker," a trader said. The market is "under pressure from the new issue bonanza this week."

The CDX Series 14 North American investment-grade index eased 1 basis point on Tuesday to a spread of 100 bps, according to a source.

Overall investment-grade Trace volume rose 22% to nearly $13 billion, a source said.

Treasuries rallied as stocks fell on Tuesday, sending yields lower.

The yield on the benchmark 10-year note fell 5 bps to 2.91%. The yield on the 30-year bond dropped 2 bps to 4.05%.

MetLife ups to four tranches

MetLife sold $3 billion of senior notes (A3/A-/A-) in four tranches late in the day, an informed source said.

The deal "took a while to price" due to the size, number of tranches and number of bookrunners, a source said.

A $250 million tranche of three-year floating-rate notes was added after the initial announcement of the sale, but the total size of the deal remained the same. Those floaters priced at par to yield three-month Libor plus 125 bps.

A $1 billion tranche of 2.375% notes due 2014 priced at a spread of Treasuries plus 162.5 bps. This was in the middle of price talk in the range of 160 to 165 bps.

The $1 billion tranche of 4.75% 10-year notes sold at Treasuries plus 185 bps. They priced lower than talk of 190 to 195 bps.

The final tranche was $750 million of 5.875% 30-year bonds sold at 195 bps over Treasuries. They were also priced below talk of 200 to 205 bps.

Bank of America Merrill Lynch, Credit Suisse Securities, Deutsche Bank Securities Inc., HSBC Securities, UBS Investment Bank and Wells Fargo Securities ran the books.

The company also priced $3.15 billion, or 75 million shares, of common stock.

Proceeds from the debt and stock sales are being used to help finance the $6.8 billion cash portion of the purchase price for MetLife's previously announced acquisition of American Life Insurance Co. from American International Group, Inc.

If that acquisition or the stock purchase agreement is not completed on or before July 10, 2011, the notes will be redeemed.

MetLife last sold bonds in a $1.25 billion sale on May 26, 2009. Those were the company's 6.75% notes due 2016 that priced at 375 bps over Treasuries.

The insurance and financial services company is based in New York City.

Primary back to old self

One market source commented at the end of the busy day that it "felt like before the [financial] meltdown" this week, when issuers came to the market more out of opportunity than specific need.

That opportunity is low borrowing rates and the fact that many companies have just exited earnings blackout.

It was the second day in a row of a packed primary, and while a slight slowdown is expected for the rest of the week, there should be some deals remaining.

"I don't think we're done," a syndicate source said of the next couple of days.

There will probably be a slight break for everyone to step back and see how these deals are performing and let the market absorb them, he said.

"It's nice to be this busy," another syndicate source said at the end of the day.

Corning prices two tranches

Corning priced $700 million of notes (Baa1/BBB+/BBB+) in two tranches by mid-afternoon, a syndicate source said.

The $300 million of 4.25% 10-year notes sold at a spread of 145 bps over Treasuries.

A $400 million tranche of 5.75% 30-year bonds priced at Treasuries plus 175 bps.

Deutsche Bank and J.P. Morgan Securities Inc. ran the books.

Proceeds are going to fund the purchase of notes in a tender offer, with any excess going for general corporate purposes.

The notes traded tighter after they were released for secondary trading, sources said.

The tranche due 2020 firmed to 138 bps bid, 134 bps offered, while the bonds due 2040 also firmed to 171 bps bid, 163 bps offered and late afternoon to 169 bps bid, 164 bps offered, the traders said.

The global glass and display technology company is based in Corning, N.Y.

Teck sells $750 million

Teck Resources sold $750 million of senior unsecured notes (Baa3/BBB/BBB-) in two tranches by late afternoon, a source who worked on the deal said.

The $300 million of 3.85% seven-year notes priced at Treasuries plus 160 bps. The notes priced below guidance in the 175 bps area.

A $450 million tranche of 6% 30-year bonds sold at a spread of 198 bps over Treasuries. This tranche also priced below talk in the 210 bps area.

The notes are guaranteed by Teck Metals Ltd.

Bank of America Merrill Lynch, Citigroup Global Markets and JPMorgan were the bookrunners.

Proceeds are being used to fund the repurchase of 9.75% notes due 2014 and 10.25% notes due 2016.

Soon after pricing, the bonds were seen firmer, though no immediate activity was seen on the notes due 2017, one trader said.

The 40-year bonds were quoted at 194 bps offer mid-afternoon.

As the market closed, the seven-year notes were seen at 165 bps bid, and the 40-year bonds were 2 bps tighter on the offer side, a source said.

The natural resources and exploration company is based in Vancouver, B.C.

PSE&G sells $250 million

Public Service Electric & Gas priced $250 million of 3.5% 10-year secured medium-term notes (A2/A-/A) to yield Treasuries plus 62 bps, a market source close to the sale said.

The notes were talked in the 65 bps area, plus or minus 5 bps, a source said in the morning, and priced in line with that price talk. The deal was around three times oversubscribed when the books closed, the source said.

Scotia Capital and Wells Fargo Securities LLC ran the books.

Proceeds are being added to the company's general fund and used for general corporate purposes.

The notes were stronger in the secondary, a trader said. The notes last firmed to 57 bps bid, 56 bps offered.

The utility is based in Newark, N.J.

Pride's split-rated notes

Pride International sold a benchmark $1.2 billion of notes (Ba1/BBB-/BB+) in a reallocated two tranches, a source close to the deal said.

The sale was initially announced as a single tranche of 10-year notes, with the longer bonds added later. Demand for the notes was about $7 billion, the source said.

The $900 million tranche of 10-year notes priced at par to yield 6.875% with a spread of Treasuries plus 396.8 bps.

An added tranche of $300 million 30-year bonds priced at par to yield 7.875% with a spread of Treasuries plus 383.8 bps.

Goldman Sachs & Co. Inc., Citigroup and Wells Fargo Securities were bookrunners.

Proceeds are being used for general corporate purposes, including payments with respect to three drill ships under construction, and for other capital expenditures.

The offshore drilling contractor is based in Houston.

Macquarie offers $500 million

Australia's Macquarie Group sold $500 million of 4.875% seven-year notes (A2/A-/A) late in the day at Treasuries plus 262.5 bps, an informed source said.

The Rule 144A deal was priced in line with guidance of 262.5 bps, the source said.

Bookrunners were Bank of America Merrill Lynch, Citigroup, RBS Securities Inc. and Macquarie.

The global investment bank and financial services company is based in Sydney, Australia.

ANZ prices $1 billion

ANZ National (International) priced $1 billion of 3.125% five-year senior notes (Aa2/AA) at Treasuries plus 160 bps, a source said at the end of the day.

The Rule 144A notes priced at the tight end of talk in the 165 bps area, the source said.

Bookrunners were Barclays, ANZ Securities and JPMorgan.

The financial services company is based in Wellington, New Zealand.

Eksportfinans prices floaters

Norway-based Eksportfinans priced $200 million of floating-rate notes (Aa1/AA) due 2012 at par to yield one-month Libor plus 19 bps, a market source away from the deal said.

Barclays ran the books.

The export lender is based in Oslo.

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