GMAC, WPP, ACE, Ameriprise, Vodafone, MetLife bring deals; Owens Corning, Chevron tighten

By Andrea Heisinger and Paul Deckelman

New York, June 3 - The market for new investment-grade offerings exploded Wednesday, with deals from a variety of names including GMAC LLC, WPP Finance (UK), ACE INA Holdings, Inc., Ameriprise Financial Inc., Vodafone Group plc, MetLife Global Funding and Svenska Handelsbanken.

A split-rated bond from Owens Corning was sold off the high-grade desk.

The two-tranche sale from GMAC was one of the most talked about of the day, as it comes on the heels of auto-maker and parent company General Motors' bankruptcy filing.

Among the established issues in the secondary arena on Wednesday, a market source said the CDX Series 12 North American high-grade index edged up by 1 basis point to a mid bid-asked spread level of 124 bps.

Advancing issues - which on Tuesday had led decliners by a better than three-to-two edge - duplicated that performance on Wednesday.

Overall market activity, reflected in dollar volumes, rose 8% from Tuesday's levels.

Spreads in general were seen higher, in line with lower Treasury yields; for instance, the yield on the benchmark 10-year government note narrowed by 7 bps to 3.54%.

The busy new issue calendar continued to be the dominant influence in the secondary arena, with new deals like Owens Corning and Tuesday's deal from Chevron Phillips Chemical Co. LLC seen trading tighter.

Also tightening up, albeit modestly, were new financial bonds such as MetLife Global Funding I.

GMAC prices FDIC notes

Automotive, insurance and mortgage financing company GMAC sold $4.5 billion notes in two tranches backed by the FDIC.

This comes after its parent company, General Motors, filed for bankruptcy. It's the first time the deeply junk-rated name has sold bonds under the FDIC guarantee.

The $3.5 billion of 2.2% notes due 2012 priced at 80.1 bps over Treasuries, while the $1 billion of floating-rate notes due 2012 priced at par to yield three-month Libor flat.

The company is based in Detroit, and used Barclays Capital, Banc of America Securities, Deutsche Bank Securities and J.P. Morgan Securities as bookrunners.

The offering was "not surprising," a source away from it said. "Not that we knew anything for sure," he said, "but the [FDIC] bonds probably looked pretty good."

It was the first time the financial name has issued under the FDIC guarantee.

ACE INA offers 10-year

In a quick deal, ACE INA Holdings sold $500 million of 5.9% 10-year notes at Treasuries plus 245 bps.

The deal was priced by early afternoon after being announced in the morning.

The insurance and reinsurance company, based in Philadelphia, plans to use proceeds to refinance upcoming debt maturities and for other purposes.

The deal is guaranteed by parent company ACE Ltd.

Barclays Capital, Morgan Stanley and RBS Securities were bookrunners.

WPP prices upsized $600 million

Dublin, Ireland-based WPP plc via finance subsidiary WPP Finance (UK) sold an upsized $600 million 8% five-year notes to yield 8.25% with a spread of 579.3 bps over Treasuries.

The communications services provider is using proceeds to repay $311 million outstanding under a term facility and to fun the acquisition of TNS Worldwide. The balance is going to pay down overdrafts.

Banc of America Securities, Citigroup Global Markets and HSBC Securities were bookrunners.

Ameriprise does small sale

Ameriprise Financial priced $300 million of 7.3% 10-year senior notes at Treasuries plus 375 bps. The Minneapolis-based financial planning company is using proceeds for purposes including prefunding of senior notes due 2010.

The bookrunners were J.P. Morgan and UBS Investment Bank.

This sale comes in the wake of the company's $200 million sale of 7.75% 30-year retail notes priced May 27.

Owens Corning sells split-rate deal

Building materials company Owens Corning priced an upsized $350 million of 9% 10-year notes early Wednesday to yield 9.25% with a spread of 570.1 bps over Treasuries.

The size was increased from $250 million. Proceeds are going to repay amounts under a $1 billion revolving credit facility maturing Oct. 31, 2011.

The Toledo, Ohio-based company tapped Citigroup Global Markets, Banc of America Securities LLC, Wachovia Capital Markets and J.P. Morgan Securities to run the books.

The deal was priced off the high-grade syndicate desk and talked at 9.375%, the source said. "Ultimately it priced at 9 and a quarter," he said. "It did well."

Vodafone offers two tranches

Mobile telecommunications company Vodafone Group sold $2.5 billion of notes in two tranches late Wednesday, an informed source said.

The $1.25 billion of 4.15% five-year notes priced at Treasuries plus 175 basis points.

The $1.25 billion of 5.45% 10-year notes priced at Treasuries plus 195 bps.

Bookrunners were Barclays Capital, Goldman Sachs & Co., HSBC Securities and Morgan Stanley. The company is based in Newbury, England.

The sale "did well" and "priced pretty late," according to one source close to the sale.

"It's a good name, and a fairly frequent [issuer]," the source said.

MetLife sale done via Rule 144A

MetLife Global Funding sold $1.4 billion of notes in two tranches, an informed source said.

The $1 billion of five-year notes priced at a spread of Treasuries plus 280 basis points.

A $400 million tranche of two-year floating-rate notes priced at par to yield three-month Libor plus 190 bps.

Full terms were not available at press time, the source said, as bookrunners were awaiting legal sign off.

The deal was priced via Rule 144A.

Bookrunners for the New York City-based funding arm of the insurance and financial company were Barclays Capital, J.P. Morgan Securities and UBS Investment Bank.

Handelsbanken prices $1.25 billion

Svenska Handelsbanken sold $1.25 billion 4.875% five-year notes at Treasuries plus 250 bps, an informed source said.

Full terms were not available at press time.

Bookrunners were Citigroup Global Markets and Credit Suisse Securities.

The bank serves the Nordic countries and is based in Stockholm, Sweden.

Solid tone leads to full market

Although the days leading up to Wednesday were busy, they were not as full with large deals of such variety.

The mix was of financials and industrials; FDIC-backed and split-rated.

"It was a crazy one, for sure," a source said after the market close. "[I'm] not sure how much is left this week."

The pace should slow Thursday, as many deals got done already. Some may play off the day's momentum and price in the remainder of the week.

"There's been continued improvement in the market," a syndicate source said in explanation of why it seemed everyone crowded into the primary at once.

"People are encouraged by the tone."

Many of the day's sales were announced early, but priced late, such as GMAC and Vodafone.

Owens Corning shows split-rated attraction

When the new Owens Corning 9% notes due 2019 were freed for secondary dealings, a trader saw them offered at par bid, up from the 98.386 level at which the Toledo, Ohio -based insulation maker had priced its split-rated (Ba1/BBB-) deal.

A second trader quoted the bonds at 98 bid, 99 offered.

Traders said that besides the usual high-grade accounts, some of the $3900 million issue, upsized from $250 million, went to junk bond buyers.

Chevron Phillips tightens modestly

When the new Chevron Phillips Chemical bonds that had priced Tuesday began trading, a trader saw its $300 million of 7% notes due 2014 at a spread over comparable Treasuries of 440 bps bid, 430 bps offered.

That was in from the 447.1 bps level at which those bonds had priced.

New deals dominate financial arena

A trader dealing in financial bonds said that the busy new issue calendar was the main focus from where he sat.

He saw the new MetLife five-year notes tightened a little, to 277 bps bid, 272 bps offered. The New York-based insurance giant's $1 billion of fixed-rate notes - part of a $1.4 billion two-part deal that also included a floating-rate tranche - had priced earlier in the session at 280 bps over.

Bonds of another insurer, Prudential Financial Inc., were meantime seen having hung around the levels at which the Newark, N.J.-based company had issued them on Tuesday.

The trader saw Pru's $250 million of 6.20% notes due 2014 at 365 bps bid, 355 bps offered, in from the 370 bps level at which the issue had priced.

Its $750 million of 7.375% notes due 2019, which also priced Tuesday at 370 bps over, had widened a little to 375 bps bid, 365 bps offered.

Charles Schwab Corp.'s$750 million of 4.95% notes due 2014 traded at 245 bps bid, 240 bps offered. The San Francisco-based financial services company had priced its bonds Tuesday at 25p bps over.

Back among Wednesday's deals, a trader saw insurer ACE INA Holdings' $500 million of 5.90% notes due 2019 at 243 bps bid, 240 bps offered, in slightly from the 245 bps spread at pricing.

And Ameriprise Financial Inc.'s $300 million of 7.30% notes due 2019 narrowed to 365 bps bid, 360 bps over. The company priced the bonds at 375 bps over.

Bank and broker CDS costs rise

A trader watching the credit-default swaps market saw the cost of protecting the holders of big bank and major brokerage paper widen, a sign of reduced investor confidence in the sector.

He said that credit-protection costs for bank paper were anywhere from 5 bps to 33 bps wider, with Bank of America's CDS cost 33 bps higher at 163 bps bid, 173 bps offered.

He also said that brokerage company CDS costs were 15 bps to 20 bps wider.

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