Financials dominate as GE, ANZ, BMO, John Deere price; new deals tighten in secondary trading

By Aleesia Forni and Andrea Heisinger

New York, Sept. 4 - A full slate of deals hit the investment-grade primary market on Tuesday following the long Labor Day holiday weekend and two weeks of virtually no new corporate issuance.

Among the largest of the day's deals was a $2.8 billion offering in two parts by General Electric Capital Corp. The financial reopened notes due 2015 and sold a new 10-year bond.

ANZ Banking Group Ltd. grew its deal from $1 billion to $3 billion of covered bonds after adding two tranches, so it included three-year notes with both fixed-rate and floating-rate coupons and a five-year note.

John Deere Capital Corp. priced $1 billion of notes split evenly between maturities of 2015 and 2017.

Canada's Bank of Montreal priced $1.7 billion of senior notes in tranches of three-year floaters and five-year notes.

Railway transportation company Norfolk Southern Corp. priced $600 million of 30-year senior notes in a deal with a do-not-grow provision on it.

Dublin, Ireland-based WPP Finance 2010 priced $800 million of senior notes with maturities of 2022 and 2042. Terms of this deal were not available at press time.

The Public Service Co. of Colorado was in the market with an $800 million sale of first-mortgage bonds in two parts.

American Honda Finance Corp. sold $1.5 billion of bonds due 2015 and 2022.

There was a split-rated deal from Rock-Tenn Co. that was priced on the high-grade syndicate desks, sources said.

A sale of five-year notes was announced by Landwirtschaftliche Rentenbank. The German issuer is expected to price the deal on Wednesday.

Companies were eager to tap the market - many opportunistically for general corporate purposes - at the top of the week before any negativity comes out of the euro zone. There were headlines over the long weekend of preparations being made in the event that Greece leaves the euro zone, along with comments from the head of the European Central Bank.

"Some just wanted to get in before the tone shifts," a market source said.

It's expected to be a week with $20 billion to $25 billion of supply. Tuesday was off to a strong start with more than $13 billion of new bonds being priced.

Tuesday is set to have a packed calendar as well from both corporate and sovereign names.

"Should be a good one," a syndicate source said late Tuesday. "I know we've been talking to people."

The Markit CDX Series 18 North American Investment Grade index tightened 2 bps to a spread of 101 bps on from the previous week.

In secondary trading, the new issues from GE Capital and John Deere firmed, a source said near the day's close.

Investment-grade bank and brokerage credit default swaps costs tightened on Tuesday.

Bank of America's CDS costs tightened 10 bps to 207 bps bid, 212 bps offered. Citi's CDS costs were also 10 bps wider at 207 bps bid, 212 bps offered. J.P. Morgan's CDS costs tightened 3 bps to 112 bps bid, 117 bps offered. Wells Fargo's CDS costs declined 2 bps to 81 bps bid, 86 bps offered.

Merrill Lynch's CDS costs were 9 bps tighter at 214 bps bid, 219 bps offered. Morgan Stanley's CDS costs declined 12 bps to 302 bps bid, 307 bps offered. Goldman Sachs' CDS costs tightened 5 bps to 231 bps bid, 236 bps offered.

ANZ sells covered bonds

ANZ Banking Group sold $3 billion of covered bonds (Aa2/AA-/AA-) in three tranches, an informed source said.

The size of the trade was increased from a minimum of $1 billion, and the tranche of three-year floating-rate notes was added at the launch.

A $750 million tranche of three-year floaters priced at par to yield Libor plus 61 bps.

A second part was $1.5 billion of 1% three-year notes priced at a spread of mid-swaps plus 61 bps. The tranche was sold at the tight end of guidance in the mid-swaps plus 65 bps area.

There was also $750 million of 1.75% five-year notes priced at a spread of Treasuries plus 135 bps. The bonds were also priced at the low end of talk in the 140 bps area.

Bookrunners were ANZ, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

The financial services company is based in Melbourne, Australia.

GE's $2.8 billion

General Electric Capital priced $2.8 billion of new and reopened bonds (A1/AA+), an informed source said.

A 1.625% note due 2015 was reopened to add $800 million. The new notes were priced at a spread of 80 bps over Treasuries.

Total issuance was $2 billion, including $1.2 billion priced at 125 bps over Treasuries on June 27.

There was a $2 billion tranche of 10-year notes sold at a spread of Treasuries plus 160 bps.

The three-year notes tightened 2 bps to 78 bps bid, 75 bps offered, while the 10-year notes were quoted at 156 bps bid, 154 bps offered.

Full terms were not available at press time.

Bookrunners for the 10-year notes were Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC.

Those for the three-year reopened notes were Blaylock Robert Van LLC, CastleOak Securities LP, Lebenthal, Mischler Financial, Samuel A. Ramirez & Co. and Williams Capital Group LP.

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

John Deere prices tight

John Deere Capital sold $1 billion of medium-term notes (A2/A/A) in two parts, a source away from the trade said.

A $500 million tranche of 0.7% three-year notes priced at a spread of Treasuries plus 42 bps. The notes were sold tighter than talk in the 50 bps area.

There was also $500 million of 1.2% five-year notes sold 62 bps over Treasuries. The tranche was also sold tighter than guidance in the 70 bps area.

The notes due 2015 were seen at 35 bps bid, 32 bps offered.

A trader saw the notes due 2017 trade at 58 bps bid, 56 bps offered.

Barclays, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. were bookrunners.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

BMO sells $1.7 billion

Canada's Bank of Montreal sold $1.7 billion of senior medium-term notes (Aa2/A+/AA-) in a reallocated two tranches, a market source said.

The financial added a $700 million tranche of three-year floating-rate notes priced at par to yield Libor plus 47 bps.

There was also a $1 billion tranche of 1.4% five-year notes sold at a spread of 82 bps over Treasuries.

Bookrunners were BMO Capital Markets Corp., Morgan Stanley & Co. LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds are being contributed to the bank's general funds and used for general corporate purposes.

The financial services company, based in Toronto and Montreal, was last in the U.S. bond market with a $1.5 billion deal of 2.5% five-year notes priced at 170 bps over Treasuries on January 6.

American Honda tranches

American Honda Finance sold $1.5 billion of notes (A1/A+/) in two parts, a syndicate source said.

A $1 billion tranche of 1% three-year bonds priced at a spread of Treasuries plus 77 bps. The notes sold at the tight end of talk in the 80 bps area.

The second part was $500 million of 1.5% five-year notes sold at 95 bps over Treasuries. The tranche also priced at the low end of talk in the 100 bps area.

Bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities Corp. and Deutche Bank Securities Inc.

The U.S. arm of Honda Financial Services is based in Torrance, Calif.

Public Service bonds

Public Service Co. of Colorado priced $800 million of first mortgage bonds (A2/A/A) in two maturities, a market source said.

The $300 million of 2.25% 10-year bonds, series 23, were sold at a spread of 68 bps over Treasuries. The tranche was sold at the low end of talk in the 70 bps area.

A $500 million tranche of 3.6% 30-year bonds, series 24, priced at a spread of 95 bps over Treasuries. The bonds were also sold at the tight end of guidance in the 100 bps area.

Active bookrunners were Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and RBS Securities Inc.

Proceeds are being added to the company's general funds and applied to repayment or redemption of outstanding long-term debt, including maturities of $600 million of 7.875% first-mortgage bonds due on October 1. Any remainder will be used for general corporate purposes.

The public electric and natural gas utility is based in Denver.

Norfolk Southern offer

Norfolk Southern priced $600 million of 3.95% 30-year senior bonds (Baa1/BBB+/) at a spread of Treasuries plus 128 bps, according to an informed source and FWP with the Securities and Exchange Commission.

The deal had a do-not-grow provision on it and was sold at the low end of price talk in the 130 bps area.

Citigroup Global Markets Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC ran the books.

Proceeds are being used for general corporate purposes.

The freight railroad operator was last in the market with a $600 million deal of 3% 10-year notes on March 12.

Norfolk Southern's based in Norfolk, Va.

Rock-Tenn crossover deal

Rock-Tenn sold $700 million of senior notes (Ba1/BBB-/) in two tranches, a market source said.

A $350 million tranche of 3.5% notes due 2020 was priced at a spread of Treasuries plus 260 bps.

There was also $350 million of 4% bonds due 2023 priced at 255 bps over Treasuries.

The deal was done under Rule 144A and Regulation S.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used to repay a portion of U.S. dollar amounts outstanding under the company's revolving credit facility and to repay a portion of outstanding principal under term loan A and term loan A2 facilities.

The packaging company is based in Norcross, Ga.

Rentenbank's bonds

Landwirtschaftliche Rentenbank announced a sale of five-year notes (Aaa/AAA/AAA) in a filing with the SEC.

The deal is being talked in the mid-swaps plus 17 bps area.

Goldman Sachs International, HSBC Securities (USA) LLC and Nomura Securities International Inc. are bookrunners.

Proceeds are being used to finance lending activities.

The development agency for agribusiness is based in Frankfurt.

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