Simon, Canadian Natural Resources lead action; International Paper firms; ArcelorMittal down

By Sheri Kasprzak and Cristal Cody

New York, Nov. 10 - A new crop of investment-grade offerings hit the market on Thursday ahead of the Veterans Day holiday as issuers took advantage of the low interest-rate environment to get their offerings completed.

Heading up the action, the Simon Property Group LP came to market with $1.2 billion of senior unsecured notes on Thursday in two tranches, said a term sheet.

The sale included $500 million of five-year notes and $700 million of 10-year notes.

The five-year notes are due Jan. 30, 2017 and were priced at a spread of Treasuries plus 195 bps. The notes were priced at 99.768 to yield 2.847% and feature a make-whole call at any time at Treasuries plus 35 bps or at par on or before Oct. 30, 2016.

The 10-year notes are due Dec. 1, 2021 and were priced at a spread of Treasuries plus 215 bps. The notes were priced at 99.689 to yield 4.163%. The notes feature a make-whole call at any time at Treasuries plus 35 bps or at par on or after Sept. 1, 2021.

The joint bookrunners for the notes (A3/A-/) were Citigroup Global Markets Inc.; J.P. Morgan Securities LLC; Merrill Lynch, Pierce, Fenner & Smith Inc.; Deutsche Bank Securities Inc.; Goldman, Sachs & Co.; and Morgan Stanley & Co. LLC.

The proceeds from the deal will be used to repay the outstanding dollar balance of its senior unsecured credit facility. The remainder will be used for general corporate purposes.

Based in Indianapolis, Ind., Simon Property Group is a real estate company.

Secondary trades

No market activity was seen immediately in some of the new deals sold on Thursday as trading wound down early ahead of the three-day weekend, traders said.

Overall trading volume was flat at about $9 billion.

Trading was seen in one tranche of the new two-part deal from Simon Property Group.

The notes due 2016 firmed 1 bp to 194 bps bid, 191 bps offered, a trader said.

"Nothing on the 10-year," the trader said. "Pretty quiet. Looks like some people did leave early for the holiday."

The Markit CDX Series 17 North American high-grade index was unchanged at a spread of 130 bps.

Bank and financial paper traded weaker. Goldman Sachs Group, Inc.'s paper widened more than 20 bps in the secondary market.

International Paper Co.'s bonds firmed after weakening the previous day, tightening 5 bps below issue price.

ArcelorMittal bonds continued to move out in trading on Thursday, a source said.

AT&T, Inc.'s short-dated debt widened while the telecommunications company's long-dated bonds firmed in light trading on Thursday.

Treasuries fell on Thursday on the long end of the curve after Italy tapped the debt markets and the U.S. 30-year bond auction met with weak demand. The yield on the 30-year bond closed up 8 bps to 3.11%. The benchmark 10-year note yield rose 7 bps to 2.03%.

Canadian Natural sells debt

During the session, Canadian Natural Resources Ltd. priced $1 billion of senior notes Thursday, said a term sheet.

The offering, which was conducted in two tranches, was priced through bookrunners J.P. Morgan Securities LLC, BNP Paribas Securities Corp. and RBC Capital Markets LLC.

The deal included $500 million of three-year notes and $500 million of 10-year notes.

The three-year notes are due Nov. 14, 2014 and were priced at a spread of Treasuries plus 110 bps. The notes, which were priced at 99.901 to yield 1.484%, feature a make-whole call at Treasuries plus 20 bps.

The 10-year notes are due Nov. 15, 2021 and were priced at a spread of Treasuries plus 145 bps. The notes feature a make-whole call at Treasuries plus 25 bps and were priced at 99.606 to yield 3.497%.

The proceeds from the sale will be used to repay borrowings under the company's credit facilities.

Headquartered in Calgary, Alta., Canadian Natural is a natural gas and crude oil exploration, production, acquisition and marketing company.

Prudential offers notes

Elsewhere during the session, Prudential Financial Inc. came to market with $725 million of series D medium-term notes, said a pricing sheet.

The offering included $400 million of 10-year notes and $325 million of 30-year notes.

The 4.5% 10-year notes are due Nov. 16, 2021 and were priced at a spread of Treasuries plus 255 bps. The notes were priced at 99.237 to yield 4.596% and feature a make-whole call at any time at the greater of par and the discounted CMT rate plus 40 bps.

The 30-year notes are due Nov. 16, 2041 and were priced at a spread of Treasuries plus 275 bps. The notes were priced at 99.046 to yield 5.868% and feature a make-whole call at any time at the greater of par or the discounted CMT rate plus 45 bps.

The joint bookrunners for the 10-year notes were Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and RBS Securities Inc.

The joint bookrunning managers for the 30-year notes were HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and UBS Securities LLC. The senior co-managers were Lloyds Securities Inc., Mitsubishi UFJ Securities (USA) Inc., Mizuho Securities USA Inc., SMBC Nikko Capital Markets Ltd. and U.S. Bancorp Investments Inc.

The proceeds will be used for general corporate purposes, including refinancing a portion of the company's 5.8% medium-term notes, which are due June 15, 2012, its 3.625% medium-term notes due Sept. 17, 2012 and its 5.15% medium-term notes due Jan. 15, 2013.

Headquartered in Newark, N.J., Prudential is a financial products and services company.

Goldman moves out

In secondary trading, Goldman Sachs Group's 7.5% notes due 2019 widened to 368 bps from 344 bps the previous day, a source said Thursday.

Goldman sold the notes in 2009 at a spread of 337.5 bps.

The investment bank is based in New York City.

International Paper firms

International Paper's 4.75% notes due 2022 firmed to 265 bps bid on Thursday, bucking the weakness, according to a trader.

The notes were quoted on Wednesday at 272 bps bid, 267 bps offered.

The company sold $900 million of the notes (Baa3/BBB/) at Treasuries plus 270 bps on Tuesday.

The global paper and packaging company is based in Memphis.

ArcelorMittal widens

ArcelorMittal paper traded weaker a second day, a bond source said.

The company's 9.85% notes due 2019 (Baa3/BBB-/) widened to 626 bps over Treasuries from 550 bps the previous day, the source said.

ArcelorMittal is a Luxembourg-based steel maker with U.S. headquarters in Chicago.

AT&T mixed

In other trading, AT&T's 5.8% notes due 2019 widened to 107 bps from 95 bps on Wednesday, a source said Thursday.

The company's 6.55% bonds due 2039 were better in trading, ending the day 4 bps tighter at 191 bps over Treasuries.

The telecommunications company is based in Dallas.

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