Cisco, Capital One, CNA Financial, TransAlta, utilities among issuers; new deals tighten

By Andrea Heisinger

New York, Nov. 9 - Monday was one of the busiest in recent memory, with deals both large and small from Cisco Systems, Inc., Capital One Capital VI, CNA Financial Corp., TransAlta Corp., Public Service Co. of Oklahoma, Northern States Power Co., CA, Inc. and Eksportfinans ASA.

An offering of senior notes from HCC Insurance Holdings, Inc. was also announced, with pricing expected on Tuesday, a source said. And Discover Bank is expected to sell some split-rated 10-year notes on Tuesday, a source said.

Cisco brought by far the largest deal of the day, with $5 billion in three tranches. The sale is expected to fund future acquisitions and consisted of five-, 10- and 30-year notes.

The Capital One Capital deal was split-rated and totaled $1 billion of cumulative trust preferred securities due 2040.

Norway's Eksportfinans priced $1.5 billion of five-year global notes.

A handful of the day's offerings were small ones from utilities. Cleco Power reopened an issue of 6.5% notes due 2035 that were originally sold in 2005 and added $145 million.

Northern States Power priced $300 million of 30-year first mortgage bonds, while the Public Service Co. of Oklahoma sold $250 million of 10-year senior notes.

Electric utility TransAlta priced $500 million of senior notes due 2015.

CA, an internet technology management software company, priced $750 million of 10-year senior notes.

From the insurance realm came a deal from CNA Financial, which priced $350 million of 10-year notes.

Once the day's bonds hit the secondary market, most were at least a little tighter.

The Public Service bond was one of the biggest movers, coming in 15 to 20 basis points. TransAlta also tightened nicely by more than 20 bps.

The bonds from CA and CNA Financial were quoted as improved in trading.

The secondary's focus was "definitely on new deals," a trader said.

Spreads were unchanged to a little wider by late in the afternoon as Treasury yields were the same as the day before or in a little. The five-year note was unchanged at 2.29%. The 10-year note made the biggest shift, coming in 2 bps to 3.48%.

Cisco prices three tranches

Networking technology company Cisco Systems sold $5 billion of senior notes late in the day. The deal was split among five-, 10- and 30-year maturities.

The $500 million of 2.9% five-year notes priced at a spread of Treasuries plus 67 bps.

A $2.5 billion tranche of 4.45% 10-year notes priced at Treasuries plus 100 bps.

A $2 billion tranche of 5.5% 30-year notes priced at 130 bps over Treasuries.

The sale was called "the biggie of the day," both for its size and level of interest. An exact amount of its oversubscription was not available, but a source said it was "several times over."

Trading levels for the notes were not available at press time because of the lateness of the sale.

Barclays Capital Inc., Credit Suisse Securities and Deutsche Bank Securities Inc. were active bookrunners for the business based in San Jose, Calif.

Proceeds are being used for general corporate purposes, which are expected to include acquisitions.

Capital One unit sells preferreds

Capital One Capital VI priced $1 billion in 8.875% split-rated 30-year cumulative trust preferred securities (Baa2/BB) to yield 9% in a deal guaranteed by parent company Capital One Financial Corp.

The preferreds were priced in line with talk whispered in the 9% yield area, a source away from the deal said.

The issue was sold off the high-grade desk, with about 90% of investor interest coming from investment-grade investors.

The issue has a spread of 459.9 bps over Treasuries.

Barclays Capital, Citigroup Global Markets Inc. and Wells Fargo Securities ran the books.

Proceeds will be used for general corporate purposes.

The banking and financial services company is based in Richmond, Va.

TransAlta offers notes due 2015

TransAlta sold $500 million of 4.75% senior unsecured notes due 2015 to yield Treasuries plus 250 bps.

HSBC Securities, RBC Capital Markets Corp. and RBS Securities Inc. were the bookrunners.

Proceeds will be used to repay a portion of debt related to the acquisition of Canadian Hydro Developers, Inc.

The electric company is based in Calgary, Alta.

CA prices $750 million

Information technology software company CA priced $750 million of 5.375% 10-year senior notes at Treasuries plus 200 bps.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Citigroup.

Proceeds will be used to repay amounts under a revolving credit facility and for general corporate purposes.

The issuer is based in Islandia, N.Y.

CNA Financial prices 10-year

CNA Financial sold $350 million of 7.35% 10-year unsecured notes at Treasuries plus 387.5 bps.

The sale was talked in the "low 400s," a source close to it said, referring to the basis points. "It actually came in," he said. It was well oversubscribed with "about $2.5 billion on the pad," he added.

Citigroup, JPMorgan and Wells Fargo Securities were the bookrunners.

Proceeds are going to general corporate purposes.

The insurance company is based in Chicago.

Eksportfinans offers $1.5 billion

Norway's export credit agency Eksportfinans priced $1.5 billion of 3% five-year global notes at Treasuries plus 81.75 bps, according to an FWP filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley ran the books.

The issuer is based in Oslo.

Surge of issues starts week

Predictions of a busy start to a "weird week" came true as the day was crammed with new deals. Most were smaller and priced early, but a $5 billion deal from Cisco took much of the day to get done.

"Almost everyone worked on that in some way," a source said. "It was the focus."

Monday is not expected to be the only busy day of the week. Volume is set to be high on Tuesday and again on Thursday after a mid-week market close for Veterans Day Wednesday.

"We'll be active tomorrow," a syndicate source said. "I know we have some stuff. It's kind of a weird week, but we shouldn't skip a beat. We'll be back to it on Thursday."

There are at least two deals on tap for Tuesday. Both HCC Insurance Holdings and Discover Bank are expected to price deals in the high-grade market.

Public Service of Oklahoma sells 10-year

American Electric Power subsidiary Public Service Co. of Oklahoma priced $250 million of 5.15% 10-year senior notes early in the day at Treasuries plus 170 bps, according to an FWP filing with the SEC.

Barclays Capital, Bank of New York Mellon and Citigroup were the bookrunners.

Proceeds are being used for general corporate purposes.

The utility is based in Tulsa, Okla.

Northern States sells mortgage bonds

Northern States Power priced $300 million of 5.35% 30-year first mortgage bonds at 98 bps over Treasuries.

Bookrunners were Barclays Capital, KeyBanc Capital Markets and RBS Securities.

Proceeds are being added to the company's general fund and applied to short-term debt repayment. This includes repayment of $250 million in 6.875% notes.

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

HCC Insurance to price notes

HCC Insurance Holdings announced a sale of senior unsecured notes in a 424B5 filing with the SEC.

A source close to the offering said the sale is Tuesday's business.

Bookrunners are Bank of America Merrill Lynch, JPMorgan and Wells Fargo Securities.

Proceeds will go to repay outstanding debt under a revolving credit facility.

The specialty insurance group is based in Houston.

Discover Bank selling split-rated deal

Discover Bank is planning a sale of split-rated 10-year subordinated notes, a market source away from the sale said on Monday.

The notes (Ba1/BBB-/BBB-) are expected to go overnight and price on Tuesday, the source said.

Goldman Sachs is running the books.

Proceeds will be used for general corporate purposes.

The banking subsidiary of Discover Financial Services is based in Riverwoods, Ill.

CNA 10-year tightens

The new 7.35% notes due 2019 tightened once hitting the secondary market late in the afternoon, a trader in the financial sector said.

The bond priced at 387.5 bps over Treasuries and was quoted at 380 bps bid, 375 bps offered.

TransAlta bond rockets in

The new 4.75% bond due 2015 from TransAlta was better by more than 20 bps late in the day, a trader said.

The trader quoted the bond that sold at 250 bps over Treasuries at 232 bps bid, 215 bps offered. It was one of the biggest movers of the day among the new issues in the high-grade market.

Public Service 10-year improves

Public Service Co. of Oklahoma's new 5.15% bond due 2019 was between 15 and 20 bps tighter in the secondary, a trader said.

The issue was sold at 170 bps over Treasuries and was quoted at 155 bps bid, 150 bps offered.

CA bond offered tighter

A 5.375% bond due 2019 from CA, Inc. that was priced at 200 bps over Treasuries on Monday was offered nicely tighter in trading, a trader said. He quoted it as offered about 15 bps better at 185 bps.

Northern States bond slightly better

Northern States Power's new 5.35% bond due 2039 was only a little better than where it was sold early in the day, a trader said.

The issue was quoted at 95 bps bid, with an offer of 90 bps, after selling early in the afternoon at Treasuries plus 98 bps.

Recent Bank of NY tranches better

Two bonds sold Friday by the Bank of New York Mellon Corp. improved slightly in trading, a trader said.

The 3.1% bond due 2015 was quoted at 80 bps bid, 75 bps offered. It sold at 83 bps over Treasuries.

The second tranche was a 4.6% note due 2020. It performed about as well as the shorter bond, tightening to 110 bps bid, 106 bps offered, from its price of 112 bps over Treasuries.

Time Warner Cable, banks top trading

A bond from Time Warner Cable Inc. sat atop trading volume by early afternoon, a trader said. The cable television company and internet service provider announced third-quarter profits on Nov. 4 that showed an 11% dip from the same quarter a year ago. It is also an investor in the wireless internet provider Clearwire, as reported on Monday.

Time Warner's 6.75% bond due 2039 was popular with investors.

Notes from Bank of America Corp. and Goldman Sachs & Co. were also among the most-traded as both names remain in the news for various reasons.

Altria Group Inc.'s 10.2% bond due 2039 came in behind Time Warner's in terms of volume as the tobacco giant's shares were named a top pick by Barron's.

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