Altria Group, Celgene, Westpac, Enterprise Products among bounty of deals; new bonds firm

By Aleesia Forni and Andrea Heisinger

New York, Aug. 6 - Predictions of a hectic start to the week in the high-grade bond market were confirmed on Monday as deals neared the double digits.

Among those pricing multi-part deals were Enterprise Products Operating LLC, Altria Group Inc., Celgene Corp. and Northern States Power Co.

Biopharmaceutical company Celgene priced $1.5 billion of senior notes due 2017 and 2022.

Enterprise Products priced $1.75 billion of three-year notes and long 30-year bonds, while Altria sold $2.8 billion of senior notes in two parts.

Xcel Energy subsidiary Northern States priced $800 million of notes due 2022 and 2042.

New York City-based Omnicom Group Inc., along with Omnicom Capital Inc., reopened an issue of 3.625% senior notes due 2022 to add $250 million. This raised the outstanding amount of the paper to $1 billion.

Australia's Westpac Banking Corp. was in the market with a $1.25 billion deal of senior notes. Westpac's last dollar-denominated offering comprised covered bonds backed by that country's government.

Ecolab Inc. priced $500 million of three-year senior notes to repay outstanding commercial paper, among other uses.

Real estate investment trust BRE Properties, Inc. priced $350 million of senior notes due 2023 after the deal was upsized from $250 million.

There was a $1 billion sale of 30-year junior subordinated notes by Prudential Financial, Inc. that have a fixed rate for 10 years and then a floating rate.

Tennessee Valley Authority, the government-backed electric utility, sold $1 billion of 10-year notes.

A lack of negative headlines led to the large number of companies making go calls at the top of the week.

"It felt pretty good out there," a market source said. "Nothing too crazy."

Provided nothing happens prior to Tuesday's open, the primary should be receptive to more deals.

"Hopefully we'll have more good stuff," a syndicate source said.

The market source agreed that Tuesday "should be busy again," but later added "hopefully not this busy."

The Markit CDX Series 18 North American Investment Grade index tightened 1 bps to a spread of 103 bps, while the bulk of the day's new issues traded 1 bps to 8 bps better near the end of the session.

Altria prices tight

A source who worked on Altria's $2.8 billion of senior notes (Baa1/BBB/BBB+) said that the deal saw about $7 billion of demand with $4 billion on the books for the 10-year notes and $3 billion for the 30-year bonds.

There was a $1.9 billion tranche of 2.85% 10-year notes priced at a spread of Treasuries plus 130 bps. The notes were sold at the tight end of talk in the 135 bps area, plus or minus 5 bps, the source said.

A second part was $900 million of 4.25% 30-year bonds sold at 168 bps over Treasuries. The bonds were also priced at the low end of guidance in the 170 bps area, plus or minus 2 bps.

Both tranches tightened in the secondary. The 10-year tranche traded at 126 bps bid, 124 bps offered near the end of the session, while the 30-year tranche was seen at 165 bps bid, 162 bps offered.

Bookrunners were Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC.

Proceeds are being used to repay or repurchase certain debt, including notes purchased in a tender offer and for other general corporate purposes.

The sale is guaranteed by Philip Morris USA Inc.

The Richmond, Va.-based tobacco company was last in the market with a $1.5 billion deal of 4.75% 10-year notes priced at 152 bps over Treasuries on May 2, 2011.

Westpac's $1.25 billion

Westpac Banking priced $1.25 billion of 2% five-year senior notes (Aa1/AA/AA) to yield 137.5 bps over Treasuries, a market source said.

The notes traded 1.5 bps tighter at 136 bps bid, 133 bps offered late in the day.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC ran the books.

Proceeds are being used for general corporate purposes.

The bank and financial services company is based in Sydney, Australia.

Enterprise sells two tranches

Enterprise Products Operating sold $1.75 billion of senior notes (Baa2/BBB/BBB) in two maturities, an informed source said.

A $650 million tranche of 1.25% three-year notes sold at a spread of 95 bps over Treasuries. The tranche traded at 85 bps offered late in the session.

The second part was $1.1 billion of 4.45% notes due 2043 priced at a spread of Treasuries plus 185 bps. The notes were quoted 5 bps tighter at 180 bps bid, 177 bps offered.

Citigroup Global Markets Inc., Barclays, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and SunTrust Robinson Humphrey Inc. ran the books.

Proceeds are being used to temporarily reduce borrowings under a multi-year revolving credit facility and for general corporate purposes.

The deal is guaranteed by parent company Enterprise Products Partners LP.

The Houston-based midstream energy company was last in the market with a $750 million deal of 4.85% 30-year bonds priced at 175 bps over Treasuries on February 8.

Celgene prices $1.5 billion

Celgene sold $1.5 billion of senior notes (Baa2/BBB-/) in two maturities, an informed source said.

The $500 million of 1.9% five-year notes priced at a spread of Treasuries plus 130 bps.

There was also a $1 billion tranche of 3.25% 10-year notes sold at 170 bps over Treasuries.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were bookrunners.

Proceeds are being used for general corporate purposes including further development of clinical, pre-clinical programs, capital expenditures, general corporate development activities and meeting working capital needs.

The global biopharmaceutical company is based in Summit, N.J.

Northern States' $800 million

Northern States Power was in the market with an $800 million deal of first mortgage bonds (A1/A/A+) in two maturities, an informed source said.

There was roughly $3.5 billion on the books for the trade, the source said.

A $300 million tranche of 2.15% 10-year notes priced a spread of Treasuries plus 63 bps. The tranche sold at the tight end of guidance in the 65 bps area, plus or minus 2 bps.

There was also a $500 million tranche of 3.4% 30-year bonds sold at 83 bps over Treasuries. The bonds were sold at the low end of guidance in the 85 bps area, plus or minus 2 bps.

Barclays, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds are being added to the company's general corporate fund and a portion is to be used to repay short-term borrowings, including utility money pool borrowings, and to fund the repayment or redemption of long-term debt, including the maturity of $450 million of 8% first mortgage bonds due August 28.

The electric and natural gas utility subsidiary of Xcel Energy is based in Minneapolis.

Ecolab sells three-years

Ecolab sold $500 million of 1% three-year senior notes (Baa1/BBB+/) at a spread of Treasuries plus 70 bps, a source close to the trade said.

Bookrunners were Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC.

Proceeds are being used to repay outstanding commercial paper and for general corporate purposes.

Ecolab, a cleaning and sanitizing company based in St. Paul, Minn., was last in the U.S. bond market with a $3.75 billion offering in four parts on Dec. 6, 2011.

BRE upsizes

BRE Properties was in the market with a $350 million sale of 3.375% senior notes (Baa2/BBB/BBB) priced at Treasuries plus 190 bps, a source close to the trade said.

The size of the deal was increased from $250 million. The issue came in at the tight end of guidance in the 195 bps area, plus or minus 5 bps.

There was about $750 million on the books, the source said, adding that "the company wanted to [upsize] because of that."

Bookrunners were J.P. Morgan Securities LLC, RBS Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used to repay borrowings under a $750 million unsecured credit facility incurred to fund development activities and for general corporate purposes.

The real estate investment trust for apartment communities is based in San Francisco.

Omnicom's reopening

Omnicom Group and Omnicom Capital were in the market with a reopening of 3.625% senior notes due in May 2022 to add $250 million, a market source said.

The notes (Baa1/BBB+/) were sold at Treasuries plus 145 bps.

Near the day's close, one trader quoted the notes at 137 bps bid, 136 bps offered.

Total issuance is $1 billion, including $750 million priced at 170 bps over Treasuries on April 18.

The active bookrunner was J.P. Morgan Securities LLC and Citigroup Global Markets Inc. was passive.

The portion of notes issued by Omnicom Capital is guaranteed by Omnicom Group.

Proceeds are being used for general corporate purposes.

The global marketing and corporate communications company is based in New York City.

Prudential's hybrids

Prudential Financial priced $1 billion of 5.875% fixed-to-floating-rate 30-year junior subordinated notes at par, a market source said.

The notes have a fixed rate until Sept. 15, 2022 and a floating rate of Libor plus 417.5 bps after that date until maturity.

A source in the preferred stock market said there was a market of 100.375 bid, 100.75 offered for the notes, "so obviously it's doing well."

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc. and UBS Securities LLC as passives.

Proceeds are being used for general corporate purposes and to redeem outstanding retail medium-term notes including those issued under an InterNotes program.

The financial services company is based in Newark, N.J.

TVA prices $1 billion

Tennessee Valley Authority sold $1 billion of 1.875% 10-year notes (Aaa/AA+/AAA) to yield 43 bps over Treasuries, a source away from the trade said.

The notes were quoted at 42 bps bid, 39 bps offered, one trader said.

Bookrunners were Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and RBS Securities Inc.

The government-owned electric utility is based in Knoxville, Tenn.

Stephanie N. Rotondo contributed to this review

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