PS Business Parks sells preferreds; Heico deal disappears; Barclays firms 20 bps in trading

By Andrea Heisinger and Cristal Cody

New York, Oct. 7 - With earnings season officially started and a long weekend ahead, the high-grade market was mostly empty of deals on Thursday as it has been for much of the week.

A $75 million sale of perpetual cumulative preferred stock was priced by PS Business Parks, Inc. The shares are split-rated.

Details were released for two deals that launched and priced on Wednesday.

DnB NOR Boligkreditt AS gave terms for a $2 billion sale of five-year covered bonds that was launched and priced late on Wednesday. The Norwegian financial services company sold the bonds under Rule 144A.

Terms were also given for Barclays Bank plc's $1.25 billion of 10-year subordinated notes, which the financial services company priced late Wednesday.

Alcoa Inc. kicked off the third-quarter earnings announcements, with many more to come. A jobs report comes out from the Labor Department on Friday, meaning there likely won't be much in the way of deals to end the week.

"Everyone's bailing for the long weekend," one syndicate source said Thursday.

Another added that "tomorrow's going to be painful."

The syndicate source said he heard the Heico Cos. LLC/Heico Holding Inc. deal "is off."

"I don't know what happened with it, but it disappeared," he said.

The $120 million sale of 10-year senior unsecured notes was announced on Tuesday and was to be priced under Rule 144A.

The primary's tone was mostly unchanged for the day, but there wasn't much activity, he said.

Secondary spreads firmed 1 basis point to 3 bps overall, according to a trader.

"Seemed spreads were tighter all around," the trader said.

The Markit CDX Series 14 North American investment-grade index firmed 1 bp to a spread of 98 bps, Markit Group Ltd. said.

In the secondary market, the 5.14% notes from Barclays Bank firmed 20 bps in trading, a trader said.

Trading was light on thinly staffed desks ahead of the holiday weekend, a source said. The bond markets are closed on Monday for the Columbus Day holiday.

Overall investment-grade Trace volume fell 10% to about $13 billion, according to one source.

Short-term Treasuries rose, sending yields down to new lows on Thursday after unemployment claims fell and as traders braced for Friday's jobs report, which will release data on private-sector job growth in September.

The yield on the 10-year note fell 1 bp to 2.37%. The 30-year bond yield rallied, with the yield closing up 3 bps at 3.7%.

"Hearing if it's a negative print, the Fed will be in before the Nov. 3 meeting for QE2," a trader said of the jobs report.

Market investors expect the data to convince the Federal Reserve to start a new round of bond purchases, also known as quantitative easing, to stimulate economic growth.

PS Business Parks' preferreds

PS Business Parks priced $75 million, or 3 million shares, of split-rated 6.875% perpetual series R cumulative preferred stock (Baa3/BB+/BBB-) at par of $25, an informed source said.

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

Proceeds will be used to redeem 7.6% series L cumulative preferreds on Nov. 8 and for general corporate purposes including the acquisition of commercial properties.

The real estate investment trust for commercial properties is based in Glendale, Calif.

DnB NOR gives terms

DnB NOR Boligkreditt gave terms for a $2 billion sale of 2.1% five-year covered bonds (Aaa/AAA) priced late on Wednesday at mid-swaps plus 68 bps, a source away from the deal said.

The bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities and Morgan Stanley & Co. Inc.

The unit of financial services company DnB NOR AS is based in Bergen, Norway.

Barclays' 10-year terms

Barclays Bank released the terms for its $1.25 billion sale done late on Wednesday. The 5.14% 10-year subordinated notes (Baa1/A/A+) priced at Treasuries plus 275 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunner was Barclays Capital Inc.

The notes were much stronger in the secondary market late Thursday, a source said.

The notes firmed to 255 bps bid, 250 bps offered, the source said.

The financial services company is based in London.

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