John Deere, Comcast, MetLife, AIG, others sell as issuers regain confidence; new issues tighten

By Aleesia Forni and Andrea Heisinger

New York, June 26 - The high-grade bond market came back to life on Tuesday as multi-tranche deals were done by John Deere Capital Corp. and Comcast Corp., along with other corporate and sovereign sales.

John Deere priced $1.6 billion in three tranches, while Comcast was in the U.S. bond market for the first time since 2010 selling $2.25 billion of notes due 2022 and 2042.

MetLife Global Funding I was in the market with a $1 billion deal of three-year notes.

A reopening of 4.875% notes due 2022 was done by American International Group, Inc. to add $750 million.

Private Export Funding Corp. sold $400 million of 12-year notes and Experian Finance plc priced $500 million of five-year bonds, both done under Rule 144A and Regulation S. Terms of the deals were not available at press time.

Paris-based LVMH Moet Hennessy Louis Vuitton SA priced $850 million of five-year notes in what was also a private deal.

France's Caisse d'Amortissement de la Dette Sociale priced $3 billion of three-year paper.

There was a $1.5 billion sale of three-year notes from Oesterreichische Kontrollbank AG that priced after going overnight from Monday.

A $200 million deal of $25-par notes due 2052 was announced and priced by Entergy Louisiana LLC.

The rush of new deals came after issuers stood down on Monday on news out of the euro zone from Spain and a bailout appeal from Cyprus.

Spain had an auction of short-term bills early on Tuesday, which sources from syndicate desks had said they were watching late on Monday, right after Moody's Investors Service announced the downgrade of 15 of that country's banks.

"Today wasn't perfect, but people were ready [to price]," a market source said. "Some of them we had talked to yesterday."

There is only about $10 billion of supply - some say a maximum amount of $15 billion - for the week, meaning volume could go down on Wednesday and Thursday.

"I haven't heard of much [for Wednesday]," one syndicate source said. "I would think most of it was today."

Issues continued to see healthy demand from investors, as Comcast saw the books for its offering more than four times oversubscribed.

"Everything priced well, too," the syndicate source said.

New issues in the secondary market continue to do "pretty good," a New York trader said near the end of the session.

"We started out kind of weaker this morning, earlier today," the source continued, "but things have definitely picked up."

The new notes from MetLife tightened in the secondary, while AIG's new issue traded flat immediately after pricing.

Investment-grade bank and brokerage credit default swaps costs were mixed on Tuesday.

Bank of America's CDS costs tightened 1 bps to 272 bps bid, 277 bps offered. Citi's CDS costs were unchanged at 253 bps bid, 258 bps offered. J.P. Morgan's CDS costs widened 2 bps to 138 bps bid, 143 bps offered.

Brokers were also mixed. Merrill Lynch's CDS costs were 3 bps tighter at 287 bps bid, 297 bps offered. Morgan Stanley's CDS costs widened 8 bps to 373 bid, 378 bps offered.

Comcast's two tranches

Comcast sold $2.25 billion of notes (Baa1/BBB+/BBB+) in two maturities, a source close to the deal said.

There was roughly $10 billion of demand for the notes, including $5.5 billion for the 10-year tranche and $4.6 billion for the 30-year bonds, the source said.

"It was crazy," they added.

A $1 billion tranche of 3.125% 10-year notes priced at a spread of Treasuries plus 150 bps. The notes were priced at the tight end of talk in the Treasuries plus 155 bps area, plus or minus 5 bps.

The $1.25 billion of 4.65% 30-year bonds sold at 195 bps over Treasuries. The tranche was sold at the low end of guidance in the 195 bps to 200 bps range.

Bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds are being used to redeem $575 million of 6.625% notes due in May of 2026.

Comcast was last in the market with a $2.4 billion deal in two tranches on Feb. 24, 2010. A 5.15% 10-year note from that deal priced at 147 bps over Treasuries and a 6.4% 30-year bond sold at 180 bps over Treasuries.

The telecommunications company is based in Philadelphia.

Deere prices $1.6 billion

John Deere Capital sold $1.6 billion of notes (A2/A/) in three parts, a source away from the trade said.

The $500 million of floating-rate notes due 2014 priced at par to yield Libor plus 15 bps.

A $600 million tranche of 0.95% three-year notes sold at a spread of Treasuries plus 55 bps.

The third part was $500 million of 2.8% notes due 2023 priced at 120 bps over Treasuries.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and HSBC Securities (USA) Inc. were bookrunners.

The funding arm of agricultural and industrial equipment maker and distributor John Deere is based in Moline, Ill.

AIG reopens 10-years

American International Group reopened its issue of 4.875% senior notes due in June of 2022 to add $750 million, according to an FWP with the Securities and Exchange Commission.

The notes (Baa1/A-/) were sold at Treasuries plus 300 bps.

One trader saw the notes at 290 bps offered near the end of the session.

Total issuance is $1.5 billion, including $750 million priced on May 21 at 325 bps over Treasuries.

Bookrunners were Citigroup Global Markets Inc. and Goldman Sachs & Co.

Proceeds are being used for general corporate purposes, including repayment of debt maturing in 2013.

The insurance company is based in New York City.

MetLife's short bonds

MetLife Global Funding sold $1 billion of 1.7% three-year notes (Aa3/AA-/) at a spread of 132 bps over Treasuries, a market source said.

The notes traded at 126 bps bid, 123 bps offered, a market source said.

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and UBS Securities LLC ran the books.

The deal was done under Rule 144A and Regulation S.

The funding arm of insurance provider Metropolitan Life Insurance Co. is based in New York City.

LVMH sells $850 million

LVMH Moet Hennessy Louis Vuitton sold $850 million of 1.625% five-year notes at a spread of Treasuries plus 95 bps, a source close to the deal said.

The bonds were sold at the tight end of guidance in the 100 bps area, plus or minus 5 bps, the source said.

The size of the trade was increased from $500 million, the source said.

The notes (/A/) were priced under Rule 144A and Regulation S.

Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and RBS Securities Inc. were bookrunners.

The multinational apparel and accessory company is based in Paris.

CADES prices at talk

Caisse d'Amortissement de la Dette Sociale sold $3 billion of 1.625% three-year notes (Aaa/AA+/AAA) to yield mid-swaps plus 105 bps, or Treasuries plus 127.8 bps, an informed source said.

The deal priced in line with price talk in the mid-swaps plus 105 bps area/

The bonds priced under Rule 144A and Regulation S.

Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc. and HSBC Securities (USA) LLC were bookrunners.

The French debt agency is based in Paris.

OeKB's short bond

Oesterreichische Kontrollbank priced $1.5 billion of 1.125% three-year global notes (Aaa/AA+/) to yield mid-swaps plus 53 bps, or Treasuries plus 76.75 bps, a market source said.

The deal, which is guaranteed by the Republic of Austria, went overnight after being announced on Monday.

BNP Paribas Securities Corp., Deutsche Bank AG, London branch, Goldman Sachs International and J.P. Morgan Securities Ltd. ran the books.

The export and financial services company for Austrian businesses is based in Vienna.

Entergy Lousiana bonds

Entergy Louisiana sold $200 million of 5.25% first mortgage bonds due July 1, 2052, according to a prospectus filed with the Securities and Exchange Commission.

The bonds (A3/A-/) were sold at par of $25.

Price talk was revised to around 5.25%, a trader said at midday. The deal was upsized from $100 million.

"It's going to do very well," he said, seeing paper at $24.97 in the gray market.

He added that there was no selling group.

After the bell, and shortly ahead of pricing, another market source saw a $24.97 bid, but no offers for paper.

"The offered side is probably just above par," he said.

The company will apply to list the bonds on the New York Stock Exchange.

Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds will be used for general corporate purposes.

Entergy Louisiana is the Baton Rouge-based energy providing subsidiary of Entergy Corp.

Experian trades 164 bps bid

Experian Finance plc's $500 million five-year bonds traded at 164 bps bid, 158 bps offered, a market source said.

Terms of the deal were not available at press time.

Experian Finance is the financing arm of Dublin-based Experian plc, an information services company.

Stephanie N. Rotondo contributed to this review

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