National Rural Utilities, Macy's, Cameron price; Prudential, Rio Tinto, Rockies Express plan issues

By Andrea Heisinger and Paul Deckelman

Omaha, June 23 - The issuance window was open Monday and several companies took advantage of it, including Cameron International Corp., Macy's Retail Holdings, Inc., Baltimore Gas & Electric Co. and National Rural Utilities Cooperative Finance Corp.

Issuers wanting to get into the market before Wednesday's Federal Reserve meeting conclusion and any announcements did so Monday, a source said.

Mellow market conditions without negative headlines were also a factor, he said.

In the investment-grade secondary market Monday, advancing issues trailed decliners by around a seven-to-six ratio, while overall market activity, reflected in dollar volumes, rose by 3% from Friday's pace.

Spreads in general were seen little changed, as Treasury yields essentially held steady; the yield on the benchmark 10-year issue, for instance, tightened by 1 basis point to 4.16%.

National Rural sells $1.3 billion

National Rural Utilities priced $1.3 billion of collateral trust bonds in two tranches.

The $400 million of two-year floating-rate bonds priced at par to yield three-month Libor plus 77.5 bps.

The $900 million of 5.5% five-year bonds priced at 99.844 to yield 5.536% with a spread of Treasuries plus 190 bps.

Bookrunners were Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Investment Bank, HSBC Securities and Scotia Capital.

Macy's brings $650 million

Macy's Retail priced $650 million of 7.875% seven-year senior notes at 99.911 to yield 7.89% with a spread of Treasuries plus 408 bps.

Banc of America Securities LLC, Credit Suisse Securities and J.P. Morgan Securities Inc. ran the books.

Cameron, Baltimore Gas price

Oil, gas and industrial equipment manufacturing company Cameron International priced $750 million senior notes in two tranches.

The $450 million of 6.375% 10-year notes priced at 99.899 to yield 6.388% with a spread of Treasuries plus 222 bps.

The $300 million of 7% 30-year notes priced at 99.459 to yield 7.043% with a spread of Treasuries plus 235 bps.

J.P. Morgan, Morgan Stanley & Co., Inc. and UBS were bookrunners,

Baltimore Gas & Electric priced $400 million 6.125% five-year notes at 99.99 to yield 6.127% with a spread of Treasuries plus 250 bps.

RBS Greenwich Capital, Banc of America and J.P. Morgan were bookrunners.

Calendar builds

In addition to those that priced, a handful of companies announced upcoming issues Monday.

Mining company Rio Tinto Finance (USA) Ltd. is planning an issue of unsecured notes. Pricing is expected Tuesday, a source close to the issue said, with proceeds used for acquisition-related expenses.

Credit Suisse Securities, Deutsche Bank Securities Inc., J.P. Morgan, Morgan Stanley and RBS Greenwich Capital are bookrunners.

Rockies Express Pipeline LLC is planning a $1.3 billion issue of senior unsecured notes in five, 10 and 30-year tranches.

Pricing is anticipated Tuesday, with the size not expected to change, a source close to the issue said.

"It definitely won't be smaller," he said. "They [the company] were pretty specific about the size."

Citigroup Global Markets Inc., Lehman Brothers Inc. and J.P. Morgan are bookrunners.

Prudential Financial, Inc. announced an issue of junior subordinated notes, also expected to price Tuesday.

They have a final maturity of 2068, with a price of $25, and will be callable after five years.

Citigroup, Merrill Lynch, Morgan Stanley, UBS and J.P. Morgan are bookrunners.

A couple of other upcoming deals are in the works, but with fewer details known.

Cabot Oil & Gas Corp. is planning an issue of long-term senior notes in a private placement, according to a market source and details included in a 424B2 Securities and Exchange Commission filing for a common stock issue from the company.

Proceeds from the notes and stock will be used to finance a pending acquisition.

Australian bank ANZ is planning a two-day roadshow Thursday and Friday for an issue to price next week, a source close to the deal said.

Beating the Fed

Many issuers decided to get pricing out of the way Monday, or at least announce their two-day issues, prior to any announcement that may come out of the two-day Federal Reserve meeting that wraps Wednesday.

"I think today [Monday] will be the heaviest day this week," a market source said. "We'll see a few things tomorrow, but I don't think anyone's going to do much Wednesday, and no one does much at the end of the week."

He called the middle of the week "tough," for pricing because of any decision that may come out of the Fed meeting. It will likely not be anything major, he said, but it still influenced issuance calls Monday.

Anything that was anticipated to take two days to price also came out of the woodwork Monday, he said.

"I think they figured if they didn't price it Monday it was going to be tough to do," he said. "In the summer, no one wants to print anything at the end of the week."

There was nothing between the open and close Monday to sway an issuer either way, a source said.

Negative headlines weren't a factor and there was "nothing to make a real difference," he said.

Little trading; financials better

Most of the new deals which priced in the sector were seen relatively late in the day, not leaving enough time for any meaningful aftermarket activity. A market source said that would be more a case of Tuesday business.

A trader said that he "didn't hear very much" going on, seeing a generally cautious tone in the market as players tried to digest the news that Goldman Sachs - which some weeks back had recommended overweighting the stocks of financial companies, believing the worst was behind them - on Monday reversed that advice, now urging clients to underweight such shares.

Even so, financial companies were seen among some of the gainers. Deutsche Bank's 4.875% notes due 2013 were seen to have come in some 10 bps on the session to a spread over comparable Treasuries of 175 bps.

Berkshire Hathaway's 4.85% notes due 2015 were quoted trading around 95 bps bid, a 15 bps pickup on the session.

On the other hand, beleaguered Merrill Lynch's 6.05% notes due 2016 were seen having widened out 15 bps to the 340 bps level, while somewhat better-positioned JP Morgan Chase's 5.125% notes due 2014 were also 15 bps wider, at 165 bps.

A trader said that despite the continued uncertainty about whether the latest round of writedowns and operations cuts among major banks will in fact be the last one needed, big-bank debt-protection costs were "a little narrower" on the day, except for troubled thrift Washington Mutual, which widened out about 5 bps. He meantime saw the credit-default swap costs for major brokerage house paper, like Merrill Lynch, Lehman Brothers Holdings, Goldman Sachs and Morgan Stanley about 3 bps to 5 bps wider "across the board."

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