Eaton unit, Statoil, Barclays, GE, Macy's lead robust primary issuance; Dr. Pepper better

By Aleesia Forni and Andrea Heisinger

New York, Nov. 14 - Some issuers who scoped out the high-grade market for a day liked what they saw and piled into the market on Wednesday.

The largest sale came from Eaton Corp. Ltd. indirect subsidiary Turlock Corp. The company priced $4.9 billion in five tranches after a three-year note was added to the existing tranches.

Norway's Statoil ASA priced $2 billion in three parts, including a reopening of 4.25% bonds due 2041.

Macy's Retail Holdings, Inc. sold $1 billion of senior notes due 2023 and 2043. Each of the notes is guaranteed by Macy's Inc.

Financials came to the market in bulk. Barclays Bank plc tapped the market for $3 billion of contingent capital 10-year notes while General Electric Capital Corp. sold $1 billion of five-year bonds.

North Carolina-based BB&T Corp. sold $500 million of five-year notes.

Other trades came from real estate investment trust HCP, Inc., which sold $800 million of seven-year senior notes, and Plum Creek Timberlands, LP, which sold an upsized $325 million of long 10-year notes guaranteed by Plum Creek Timber Co. Inc.

Wisconsin Power & Light Co. priced $250 million of 10-year notes.

The preferred stock market also saw a surge of activity as Prudential Financial Inc., NextEra Energy Capital Holdings Inc. and Taylor Capital Group Inc. announced offerings.

NextEra priced $500 million of $25-par junior subordinated notes.

Sovereign issues priced early in the day included Germany's FMS Wertmanagement, which sold $2 billion of five-year global notes after going overnight from Tuesday.

International Finance Corp. priced $1 billion of five-year notes.

The tone held from Tuesday when some large sales were priced and encouraged those waiting on the sidelines.

"I think it was like 'Why not?' with some of these guys, especially the financials," a source said at the end of the day.

Not all of the financial names fared well, however, with BB&T printing at a spread wider than initial guidance.

Others, such as Macy's, were able to upsize their offerings based on demand and also price at tighter spreads than talk.

More deals are expected on Thursday as issuers race to get in amid favorable rates ahead of Thanksgiving.

"Let's keep it going, right?" a syndicate source said.

The Markit CDX Series 18 North American Investment Grade index widened 4 basis points to a spread of 105 bps on Wednesday.

One trader commented that Hewlett-Packard Co. was active during the session, with spreads 3 bps wider on the day.

In other telecommunication and technology names, AT&T Inc.'s bonds due 2039 were quoted 4 bps better late Wednesday, while the 6.25% bond due 2037 from Verizon Communications Inc. closed the session 3 bps wider.

Tuesday's fixed-rate issuances from Volkswagen International Finance NV's were unchanged to slightly weaker on Wednesday.

The recent issuances from Dr. Pepper Snapple Group Inc. and Mack-Cali Realty LP, which also hit the market on Tuesday, firmed during the session.

Barclays brings deal

Barclays Bank sold $3 billion of 7.625% 10-year contingent capital notes at par to yield 7.625%, a market source told Prospect News.

Pricing of the notes (/BBB-/BBB-) was at a spread of 603.7 bps over Treasuries.

The notes are Tier 2 instruments, rated four notches below Barclays plc's credit ratings, and feature a 7% capital adequacy trigger. If that trigger is breached, the notes are automatically transferred to Barclays and investors would lose principal amount and future interest, according to an analysis from Fitch Ratings.

Bookrunners were Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC.

Barclays Bank was last in the U.S. bond market with a $2 billion sale of AAA rated five-year covered bonds on May 2.

The unit of Barclays plc is based in London.

Eaton's $4.9 billion sale

Eaton Corp., through its indirect subsidiary Turlock Corp., priced $4.9 billion of notes (Baa1/A-/A-) in five tranches on Wednesday, a market source said.

Terms of the Rule 144A and Regulation S sale were not available at press time.

There was a $600 million tranche of three-year notes added prior to the launch, joining $1 billion of five-year notes, $1.6 billion of 10-year notes, $700 million of 20-year notes and $1 billion of 30-year bonds.

Bookrunners were Citigroup and Morgan Stanley.

Proceeds will be used to fund a portion of the consideration for the proposed $11.8 billion acquisition by the company and Eaton Corp. of Cooper Industries plc.

There is a mandatory call at 101 if the acquisition is not done by May 21, 2013.

Eaton was last in the U.S. bond market with a $300 million sale of three-year floating-rate notes on June 13, 2011.

The diversified power technology management company is based in Cleveland.

Statoil prices in three parts

Norway's Statoil priced $2 billion of notes (Aa2/AA-/) in three tranches, a market source said.

The sale included $600 million of 1.2% notes due 2018 priced at a spread of Treasuries plus 60 bps.

A $1.1 billion tranche of 2.45% notes due 2023 sold at 90 bps over Treasuries.

Statoil also reopened its 4.25% bonds due 2041 to add $300 million. The new bonds priced at a spread of Treasuries plus 90 bps.

Total issuance is $650 million, including $350 million priced at a spread of Treasuries plus 125 bps on Nov.16, 2011.

Bookrunners were Bank of America Merrill Lynch, Credit Suisse Securities and Goldman Sachs & Co.

Proceeds will be used for general corporate purposes, including redemption of $500 million in 5.125% notes due 2014.

Statoil last tapped the U.S. bond market with a $1.75 billion sale in three tranches on Nov. 16, 2011. That offering included 1.8% five-year notes sold at 95 bps over Treasuries and 3.15% 10-year notes sold at 117 bps over Treasuries.

The oil and gas production company is based in Stavanger, Norway.

Macy's sells $1 billion

Macy's Retail Holdings tapped the market for an upsized $1 billion of senior notes (Baa3/BBB/BBB) in tranches due 2023 and 2043, a source away from the trade said.

The size of the sale was increased from $800 million, they added.

The $750 million of 2.87% 10-year notes sold at a spread of Treasuries plus 130 bps. Pricing was tighter than initial talk in the 150 bps area.

A $250 million tranche of 4.3% 30-year bonds priced at a spread of 160 bps over Treasuries. The paper sold lower than initial guidance in the 175 bps area.

Bank of America Merrill Lynch, Credit Suisse Securities and J.P. Morgan Securities LLC were the active bookrunners.

Proceeds will be used to purchase a portion of outstanding securities, with any remainder for general corporate purposes, including early financing of 5.875% senior notes due 2013.

The notes are guaranteed by Macy's Inc.

Macy's Retail was last in the market with an $800 million sale in two tranches on Jan. 10, 2012.

The department store holding company is based in Cincinnati.

GE Capital sells five-year

General Electric Capital sold $1 billion of 1.6% five-year notes (A1/AA+/) to yield Treasuries plus 100 bps, according to a market source.

Bookrunners were Barclays, Bank of America Merrill Lynch, Citigroup, Credit Suisse Securities and Deutsche Bank Securities.

The funding arm of General Electric Co. is based in Norwalk, Conn.

BB&T prices $500 million

BB&T was in the market with a $500 million sale of 1.45% medium-term senior notes due 2018 (A2/A-/A+) with a spread of Treasuries plus 85 bps, an informed source said.

The notes were sold wider than talk that was in the 78 bps area, plus or minus 1 bp, the source said.

Bookrunners were Barclays, BB&T Capital Markets, Deutsche Bank Securities and Jefferies & Co.

Proceeds will be used for general corporate purposes.

BB&T was last in the bond market with a $750 million sale of 1.6% five-year notes priced at 93 bps over Treasuries on Aug. 7.

The bank and financial services company is based in Winston-Salem, N.C.

HCP sells notes due 2020

HCP priced $800 million of 2.625% seven-year senior notes to yield 2.667%, a market source said.

Pricing of the notes (Baa2/BBB/BBB+) was at 99.729.

Bank of America Merrill Lynch, UBS Investment Bank and Morgan Stanley were the bookrunners.

Proceeds will be used to repay $600 million currently outstanding under the company's bank line of credit and for general corporate purposes, which may include the repayment of debt and funding of future acquisitions or investments.

The real estate investment trust for the health care industry is based in Long Beach, Calif.

Plum Creek upsizes, prices

Plum Creek Timberlands sold an upsized $325 million of 3.25% notes due 2023 (Baa3/BBB-/) to yield 175 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The size was increased from $300 million.

Goldman Sachs, JPMorgan, RBS Securities Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be used to repay notes maturing in 2013.

The notes are guaranteed by Plum Creek Timber Co., Inc., a Seattle-based owner and manager of private timberlands.

Plum Creek was last in the market with a $575 million sale of 4.7% notes due 2021 priced at Treasuries plus 215 bps on Nov. 8, 2010.

Wisconsin Power sells 10-year

Wisconsin Power and Light sold $250 million of 2.25% 10-year senior notes (A2/A-/) at a spread of 70 bps over Treasuries, according to an FWP filing with the SEC.

Bank of America Merrill Lynch, Citigroup and Mitsubishi UFJ Securities (USA) Inc. were the bookrunners.

Proceeds, along with those from the sale of equities and commercial paper, will be used to fund a portion of the purchase price of Riverside Energy Center on or before Dec. 31.

There is a mandatory call at 101 if the Riverside acquisition is not done by April 1, 2013.

The Madison, Wis.-based public utility distributes electricity and natural gas to central and southern Wisconsin.

FMS Wertmanagement prices

Germany's FMS Wertmanagement sold $2 billion of 1% five-year global notes at a spread of mid-swaps plus 24 bps, an informed source said.

The sale was priced lower than initial guidance in the 25 bps to 29 bps over mid-swaps range given on Tuesday, and in line with revised talk from Wednesday morning.

The notes (Aaa/AAA/AAA) are backed by the Federal Republic of Germany.

Bookrunners were Citigroup, Deutsche Bank Securities, Goldman Sachs and HSBC Securities (USA) Inc.

Proceeds will be primarily used to refinance existing liabilities in order to replace short-term with longer-term funding. In particular, FMS-WM intends to refinance existing floating-rate liabilities issued under FMS-WM's debt issuance program. Any remainder will be used for general business purposes.

The financial services company is based in Munich.

IFC prices $1 billion

International Finance sold $1 billion of 0.625% five-year notes (Aaa/AAA/AAA) to yield mid-swaps minus 4 bps, an informed source said.

Barclays, BNP Paribas Securities Corp. and Deutsche Bank Securities were the bookrunners.

The World Bank member and lender to the private sector in developing countries is based in Washington, D.C.

NextEra sells debentures

NextEra Energy Capital Holdings priced a $500 million issue of 5.125% $25-par series I junior subordinated debentures due Nov. 15, 2072, according to an FWP filed with the SEC.

The notes will be guaranteed by NextEra Energy Inc.

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

Bank of America Merrill Lynch, Citigroup, Morgan Stanley, UBS and Wells Fargo were the bookrunners.

Proceeds will be used to repay commercial paper obligations and for general corporate purposes.

NextEra is a Juno Beach, Fla.-based power provider.

Prudential's $1,000-pars

Prudential Financial will issue $1,000-par fixed-to-floating rate junior subordinated notes due June 15, 2043, according to a prospectus filed with the SEC.

The notes will not be listed.

Bookrunners are Barclays, Credit Suisse Securities, Deutsche Bank Securities, JPMorgan, Morgan Stanley and Wells Fargo.

Proceeds will be used for general corporate purposes and to redeem some outstanding retail medium-term notes, including those issued under the InterNotes program.

Prudential is a Newark, N.J.-based financial services company.

Taylor Capital's perpetuals

Taylor Capital Group will sell at least $100 million of series A noncumulative perpetual preferred stock, according to a prospectus filed with the SEC.

The company has applied to list the new securities on the Nasdaq Global Market under the symbol "TAYCO."

Sandler O'Neill + Partners LPC is the bookrunner.

Proceeds will be used for business expansion and for general corporate purposes.

Taylor Capital is a Rosemont, Ill.-based holding company for Cole Taylor Bank.

Volkswagen notes flat

Volkswagen's $850 million of 1.15% three-year notes, which sold with a spread of Treasuries plus 85 bps on Tuesday, were quoted at 85 bps bid, 82 bps offered at midday.

The $650 million tranche of 1.6% five-year notes traded 1 bp wider at 106 bps bid, 103 bps offered.

The notes priced with a spread of 105 bps over Treasuries.

The issuer is an Amsterdam-based financing arm of Wolfsburg, Germany-based auto-maker Volkswagen AG.

Dr. Pepper firms

Dr. Pepper Snapple's $250 million tranche of 2% notes due 2020 traded at 106 bps bid, 103 bps offered on Wednesday.

The company priced the notes at a spread of Treasuries plus 110 bps.

The $250 million of 2.7% 10-year notes traded 1 bp better compared to Tuesday's levels and was quoted at 108 bps bid, 103 bps offered during the session.

The notes sold at 115 bps over Treasuries.

The maker of non-alcoholic beverages is based in Plano, Texas.

Mack-Cali trades better

In other recent deals, Mack-Cali Realty's $250 million of 2.5% five-year senior notes were seen trading 15 bps tighter at 185 bps bid, 180 bps offered, a trader said.

The notes priced to yield Treasuries plus 200 bps on Tuesday.

The real estate company is based in Edison, N.J.

HP bonds active

Bonds from Hewlett-Packard were trading actively during Wednesday's session.

A trader quoted the company's 4.05% notes due 2022 at 313 bps bid, 303 bps offered.

The Palo Alto, Calif. computer, printing and imaging company sold the $500 million of notes on March 7, 2012 at a spread of 210 bps over Treasuries.

AT&T notes better

The secondary also saw AT&T's bonds due 2039 tighten 4 bps on Wednesday, closing the session at 162 bps bid.

The Dallas-based phone and internet services provider priced $2.25 billion 6.55% notes in February 2009.

Verizon trades weaker

Verizon Communications' bond due April 1, 2037 widened 3 bps on the day to 133 bps bid.

The New York City-based broadband and telecommunications company priced the $750 million 6.25% bond in 2007.

Stephanie N. Rotondo contributed to this review

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