Chevron, Costco, Apache price as multi-tranche sales continue; JPMorgan, Citi notes widen

By Aleesia Forni and Andrea Heisinger

New York, Nov. 28 - Chevron Corp., Costco Wholesale Corp. and Apache Corp. were among the full slate of deals in the high-grade bond market on Wednesday.

Chevron sold $4 billion of notes due 2017 and 2022 while Costco priced $3.5 billion in three tranches.

Energy company Apache sold $2 billion of 10-year notes and 30-year maturities while utility American Electric Power Co., Inc. priced $850 million of senior notes due 2017 and 2022.

Some smaller sales were also priced.

Dun & Bradstreet Corp. sold an upsized $750 million of notes in five- and 10-year maturities. The size was increased from $500 million.

There was an upsized $200 million trade of 10-year first mortgage bonds from Entergy Louisiana, LLC.

Taxable bonds were sold by Memorial Sloan-Kettering Cancer Center in a $400 million sale with a 40-year maturity. Goldman Sachs & Co. was bookrunner for the trade, the terms of which were unavailable at press time.

Preferred stocks also remained active as Kimco Realty Corp. priced $175 million of perpetual cumulative shares.

Prudential Financial Inc. and Webster Financial Inc. each gave terms of preferred stock sales done late on Tuesday.

A trader said at midday Wednesday that the Webster deal had freed from the syndicate but that Prudential's deal had not.

The trader quoted Prudential's notes at $24.55 bid, $24.65 offered and saw the Webster preferreds offered at $25.04.

As for the decent trading difference between the two issues, the trader noted that Webster was an investment grade-rated name and that it was a smaller deal with a better coupon.

Primary pace to continue

High-grade bond sales are expected to remain strong through the rest of the week and into the coming week as some companies elect to price now rather than wait until early 2013.

"I think with the whole fiscal cliff and whatever else, they're just going now," a market source said. "Rates are great right now so why would they wait?"

The secondary market saw bank paper from JPMorgan and Citigroup weaken during the session.

JPMorgan's 6.3% notes due 2019 closed the session 12 basis points wider. The 6.375% notes from Citigroup widened 2 bps on the day.

Investment-grade bank and brokerage credit default swaps costs were unchanged to wider on Wednesday.

Bank of America's CDS costs were unchanged at 145 bps bid, 150 bps offered. Citi's CDS costs were also unchanged at 140 bps bid, 145 bps offered. JPMorgan's CDS costs were 1 bps wider at 100 bps bid, 105 bps offered. Wells Fargo's CDS costs rose 1 bp to 80 bps bid, 85 bps offered.

Merrill Lynch's CDS costs were flat at 142 bps bid, 152 bps offered. Morgan Stanley's CDS costs rose 3 bps to 213 bps bid, 218 bps offered. Goldman Sachs' CDS costs rose 1 bps to 170 bps bid, 175 bps offered.

Chevron sells $4 billion

Chevron sold $4 billion of notes (Aa1/AA/AA) in two parts, a source close to the trade said.

There was a $2 billion tranche of 1.104% five-year notes priced at a spread of Treasuries plus 47 bps. The tranche sold at the low end of talk in the 50 bps area.

A $2 billion tranche of 2.355% 10-year notes sold at Treasuries plus 72 bps. The notes were sold at the tight end of talk in the 75 bps area.

Barclays, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the active bookrunners. Proceeds will be used for general corporate purposes, including refinancing a portion of commercial paper and to redeem 3.95% notes due 2014.

Chevron was last in the bond market with a $5 billion offering in three tranches on Feb. 26, 2009. That sale included 3.95% five-year notes priced at 195 bps over Treasuries and 4.95% 10-year notes at 195 bps over Treasuries.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

Costco's three tranches

Costco Wholesale was in the market with a $3.5 billion offering of senior notes (A1/A+/A+) priced in three tranches, a market source said.

A $1.2 billion tranche of 0.65% three-year notes sold at a spread of Treasuries plus 35 bps.

The $1.1 billion of 1.125% five-year notes priced at a spread of 50 bps over Treasuries.

A $1.2 billion tranche of 1.7% 10-year notes sold at Treasuries plus 70 bps.

Bank of America Merrill Lynch and JPMorgan were the active bookrunners. Guggenheim Securities was a passive bookrunner.

Proceeds will be used to pay a special cash dividend on common stock of $7.00 per share and to fund general corporate purposes.

The membership warehouse is based in Issaquah, Wash.

Apache sells $2 billion

Apache priced $2 billion of senior notes (A3/A-/A-) in two tranches, an informed source said.

A $1.2 billion tranche of 2.625% notes due 2023 was priced at a spread of Treasuries plus 105 bps.

The $800 million of 4.25% bonds due 2044 was sold at 150 bps over Treasuries.

Active bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs and JPMorgan.

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

Apache last tapped the bond market with a $3 billion sale in three tranches on April 3, 2012. The sale included a 3.25% 10-year note priced at 100 bps over Treasuries and 4.75% long 30-year bonds at Treasuries plus 135 bps.

The Houston-based energy company does exploration, transportation and production for natural gas, crude oil and natural gas liquids.

AEP prices $850 million

American Electric Power sold $850 million of senior notes (Baa2/BBB-/BBB) in two tranches, a market source said.

A $550 million tranche of 1.65% five-year notes priced at a spread of Treasuries plus 105 bps.

There was $300 million of 2.95% 10-year notes sold at Treasuries plus 135 bps.

Citigroup, Goldman Sachs and JPMorgan were the active bookrunners.

Proceeds will be used for general corporate purposes, including repayment of short-term debt and redemption of $242.78 million of 5.25% notes, series D, due June 1, 2015 and $315 million of 8.75% junior subordinated debentures due March 1, 2063.

The electric utility is based in Columbus, Ohio.

Dun & Bradstreet upsizes

Dun & Bradstreet tapped the market for an upsized $750 million of notes (/BBB+/BBB+) in two maturities, an informed source said.

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

There was a $450 million tranche of 3.25% five-year notes priced at a spread of Treasuries plus 262.5 bps. The size of the tranche was increased from $250 million, the source said.

A $300 million tranche of 4.375% 10-year notes sold at Treasuries plus 287.5 bps. The tranche size was increased from $250 million.

Barclays and JPMorgan were the active bookrunners.

Proceeds will be used to redeem or repurchase $400 million of 6% senior notes due in April of 2013 and credit facility borrowings totaling $320 million.

Dun & Bradstreet was last in the market with a $300 million sale of 2.875% five-year notes priced at 150 bps over Treasuries on Nov. 17, 2010.

The business information provider is based in Short Hill, N.J.

Entergy Louisiana prices

Entergy Louisiana has priced an upsized $200 million of 3.3% 10-year first mortgage bonds (Baa2/BBB/) to yield Treasuries plus 170 bps, a market source said.

The size of the trade was increased from $150 million.

Bookrunners were BNP Paribas Securities Corp., Goldman Sachs and Mizuho Securities USA Inc.

Proceeds will be used for general corporate purposes.

The utility subsidiary of Entergy Corp. is based in New Orleans.

Kimco sells preferreds

Kimco Realty sold $175 million of 5.625% class K cumulative redeemable perpetual preferred stock, according to an FWP filed with the SEC.

The preferreds will be listed on the New York Stock Exchange.

Bank of America Merrill Lynch, Citigroup, UBS Securities LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including the redemptions of $198.9 million of 6% senior notes due Nov. 30, 2012 and to reduce borrowings under a revolving credit facility maturing in October 2015.

Kimco is a New Hyde Park, N.Y.-based real estate investment trust.

Webster gives preferred terms

Webster Financial priced $110 million of series E noncumulative perpetual preferred stock at 6.4%, according to an FWP filed with the SEC.

The preferreds will be issued as depositary shares representing a 1/1,000th interest.

Joint bookrunners were Deutsche Bank Securities Inc., Jefferies and JPMorgan.

Proceeds will be used for general corporate purposes, which may include refinancing, reduction or repayment of debt, investments in Webster Bank, NA and other subsidiaries as regulatory capital, financing of possible acquisitions, repurchases of stock, expansion of the business, and investments at the holding company level.

Webster Financial is a Waterbury, Conn.-based bank holding company.

Prudential's $25-par sale

Prudential Financial is selling $500 million 5.75% $25-par junior subordinated notes due Dec. 15, 2052, the company said in an FWP filed with the SEC.

The notes will be listed on the New York Stock Exchange.

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

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

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

JPMorgan weaker

The investment-grade secondary saw the $3 billion 6.3% bonds due 2019 from JPMorgan widen 12 bps to 82 bps bid.

JPMorgan priced the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

Citigroup notes widen

In other trading, Citigroup's 6.375% notes due 2014 widened 2 bps to 110 bps bid during Wednesday's session.

The bank priced $2.5 billion five-year notes at Treasuries plus 380 bps on Aug. 5, 2009.

Stephanie N. Rotondo contributed to this review

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