Huge day for financials sees Daimler, Westpac, RBC, Intesa, Toyota price; GE Capital active

By Aleesia Forni and Andrea Heisinger

New York, Jan. 7 - Issuers inundated the high-grade corporate bond market on Monday, including large offerings from financials Daimler Finance North America LLC, Westpac Banking Corp., Royal Bank of Canada, Intesa Sanpaolo SpA and Toyota Motor Credit Corp.

When all was said and done, the day saw $17.6 billion of straight high-grade bonds.

"We were a bit surprised to see that much today," a market source said. "We could be in for $30 billion [this week]."

Germany's Daimler sold $3 billion of notes in three parts via Rule 144A and Regulation S.

Westpac Banking, based in Australia, sold $2.25 billion of notes due 2016 and 2018.

RBC was in the market with a $1.25 billion offering of five-year notes priced at the tight end of guidance.

Italy's Intesa priced $3.5 billion of three-year notes and five-year bonds. As of mid-morning, there was more than $3 billion of investor interest for the bonds, a source said, which helped bring the size to $3.5 billion.

There was a $1.5 billion sale from Toyota Motor Credit in two parts, each of which priced in line with talk.

Predictions of foreign financials flooding the U.S. bond market this week were true - at least to start the week. There were also plenty of sales from domestic corporate names.

General Electric Capital Corp. tapped the market for $1.25 billion of three-year floating-rate notes.

MetLife Institutional Funding II sold $1 billion of floating-rate notes in two maturities.

Office supply chain Staples, Inc. priced $1 billion of senior notes with five-year and 10-year maturities.

Philadelphia-based Sunoco Logistics Partners Operations LP sold $700 million of guaranteed senior notes due 2023 and 2043. The size of the sale was increased from $600 million.

Kilroy Realty, LP priced an upsized $300 million of 10-year senior notes. The size was increased from $250 million.

Berkshire Hathaway Finance Corp. was in the market with a reopening of two notes totaling $500 million.

Utility Public Service Electric & Gas Co. sold $400 million of 30-year secured medium-term notes. There was a do-not-grow provision on the size of the trade.

ADT Corp. priced $700 million of 10-year notes tighter than initial guidance while M.D.C. Holdings, Inc. sold $250 million of 30-year bonds in a crossover trade priced on the high-grade syndicate desk.

Public Storage was in the preferred stock market with a $450 million sale of cumulative preferred shares.

Tuesday's primary could see another dog pile of bond sales as long as Monday's deals perform well in trading, sources said.

"We'll see in the morning, but it looks good right now," a syndicate source said.

The Markit CDX Series 18 North American Investment Grade index tightened 1 bp to a spread of 85 bps on Monday.

In secondary action, Kilroy's notes due 2037 were 3 bps tighter, while a trader saw Sunoco's 10-year notes at 151 bps offered.

Daimler's three-year notes were 4 bps tighter by late afternoon. The five-year notes also firmed 4 bps.

The five-year notes from RBC were trading flat near the day's end.

The recent 10-year issuance from General Electric Capital Corp. was among the day's most actively traded deals, according to a market source.

The notes were seen 1 bp weaker on Monday, and the company's 1% three-year notes were also 1 bp weaker during the session.

Daimler offers $3 billion

Daimler Finance North America was in the market with a $3 billion sale of notes (A3/A-/A-) in three tranches, an informed source told Prospect News.

The trade included $750 million of two-year floating-rate notes priced at par to yield Libor plus 60 bps.

A $1.25 billion tranche of 1.25% three-year notes priced at a spread of Treasuries plus 90 bps.

Finally, there was $1 billion of 1.875% five-year notes sold at 115 bps over Treasuries.

A trader saw the three-year notes at 86 bps bid, 83 bps offered late Monday. The five-year notes were quoted at 111 bps bid, 108 bps offered.

The sale was priced under Rule 144A and Regulation S.

Bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc. and RBS Securities Inc.

Daimler Finance was last in the U.S. bond market with a $2.25 billion sale of notes in two tranches priced on July 25, 2012. The offering included 1.3% three-year notes priced at Treasuries plus 108 basis points.

The financing unit of Daimler AG is based in Stuttgart, Germany.

Toyota's two-parter

Toyota Motor Credit was in the market with a $1.5 billion sale of notes (Aa3/AA-/) in two parts, a market source said.

There was $800 million of 1.375% five-year notes sold at a spread of Treasuries plus 60 bps. Pricing was in line with talk in the 60 bps area.

A $700 million tranche of 2.625% 10-year notes priced at 80 bps over Treasuries. The tranche also sold in line with guidance in the low 80 bps area.

Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc. and RBC Capital Markets LLC were bookrunners.

The funding arm of Toyota is based in Torrance, Calif.

Staples sells $1 billion

Staples priced $1 billion of senior notes (Baa2/BBB/BBB) in two parts, a market source said.

A $500 million tranche of 2.75% five-year notes sold at a spread of Treasuries plus 200 bps. This was at the tight end of talk in the Treasuries plus low 200 bps area.

There is also a $500 million tranche of 4.375% 10-year notes priced at a spread of 250 bps over Treasuries. There was guidance in the 250 bps to 285 bps range.

Barclays, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were active bookrunners.

Proceeds are being used to fund the purchase price of a tender offer, including payment of accrued interest and any tender premium.

Staples was last in the U.S. bond market with a $500 million sale of two-year senior notes on March 24, 2009.

The office supply chain store is based in Framingham, Mass.

ADT sells 10-years privately

ADT has priced an upsized $700 million of 4.125% 10-year notes (Baa2/BBB-/BBB) at a spread of Treasuries plus 223 bps, according to an informed source and press release.

The notes were sold tighter than price guidance in the 250 bps over Treasuries area.

Goldman Sachs & Co., Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. were bookrunners.

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

Proceeds are being used to repurchase outstanding shares of ADT common stock and for general corporate purposes.

ADT was last in the U.S. bond market with a $2.5 billion sale in three tranches on June 27, 2012. That offering included 3.5% 10-year notes priced at 195 bps over Treasuries.

The security and alarm system company is based in Boca Raton, Fla.

Sunoco prices in two parts

Sunoco Logistics Partners Operations has priced an upsized $700 million of senior notes (Baa3/BBB-/BBB) in two maturities, an informed source said.

The sale included $350 million of 3.45% 10-year notes sold at a spread of Treasuries plus 155 bps. The tranche was sold tighter than talk in the Treasuries plus 170 bps area.

There was $350 million of 4.95% 30-year bonds sold at a spread of 190 bps over Treasuries. The tranche was sold tighter than talk in the 210 bps area.

The notes were quoted at 151 bps offered near the end of the session.

Active bookrunner was J.P. Morgan Securities LLC.

Proceeds will be used to repay in full the balance outstanding under the company's $350 million revolving credit facility, which totals $93 million, and amounts outstanding under $200 million revolver under which Sunoco Partners Marketing and Terminals LP is the borrower and Sunoco Logistics is guarantor.

The remainder will be used for general corporate purposes, including partially financing a $700 million 2013 expansion capital plan.

The offering is guaranteed by Sunoco Logistics Partners, LP.

The crude oil transportation, storage and sales company is based in Philadelphia.

Berkshire Hathaway reopening

Berkshire Hathaway Finance reopened two issues of senior notes (Aa2/AA+/A+) to add $500 million, an informed source said.

The company plans reopened its 1.6% notes due May 15, 2017 to add $275 million. Pricing was at a spread of Treasuries plus 45 bps.

The total amount outstanding will be $2.025 billion including two previous issues.

Berkshire also reopened its 3% notes due May 15, 2022 to add $225 million. Pricing was at Treasuries plus 80 bps.

There will be $775 million outstanding including notes priced in two previous issues.

The sale is guaranteed by Berkshire Hathaway, Inc.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used to redeem 4.5% senior notes due 2013 totaling $500 million at par, and to pay accrued and unpaid interest.

The holding company for various subsidiaries is based in Omaha.

GE Capital's floaters

General Electric Capital sold $1.25 billion of two-year floating-rate notes (A1/AA+/) at par to yield Libor plus 37 bps, a market source said.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets LLC and RBS Securities Inc. were bookrunners.

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

PSE&G prices long bond

Public Service Electric & Gas sold $400 million of 3.8% 30-year secured medium-term notes (A1/A-/A+) at a spread of Treasuries plus 75 bps, a market source said.

Barclays, Goldman Sachs & Co., RBC Capital Markets LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds will be added to the general funds of PSE&G and will be used for general corporate purposes.

The utility is based in Newark, N.J.

Kilroy prices $300 million

Kilroy Realty sold an upsized $300 million of 3.8% 10-year senior notes to yield Treasuries plus 190 bps, a market source said.

The size of the sale was increased from $250 million.

Kilroy's notes due 2032 were trading at 187 bps bid, 182 bps offered near the day's close.

J.P. Morgan Securities LLC, Barclays, Wells Fargo Securities LLC and Bank of America Merrill Lynch were bookrunners.

The sale is guaranteed by Kilroy Realty Corp.

Proceeds will be used for general corporate purposes, including acquiring properties, funding development and redevelopment projects and repaying outstanding debt.

Kilroy is a Los Angeles-based real estate investment trust.

M.D.C. crossover trade

M.D.C. Holdings has priced $250 million of 6% 30-year senior notes (Baa3/BB+/BBB-) at par to yield 6%, a market source said.

Pricing was at a spread of Treasuries plus 290.9 bps.

Citigroup Global Markets Inc. was bookrunner.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by certain subsidiaries of M.D.C. There is a change-of-control put at 101 if the company's ratings drop below investment grade.

The company was last in the U.S. bond market with a $250 million sale of 10-year notes on Jan. 12, 2010.

The home building and financial services company is based in Denver.

Intesa sells $3.5 billion

Intesa Sanpaolo was in Monday's market with a $3.5 billion sale of notes (Baa2/BBB+/A-) in two maturities, an informed source said.

There was $2 billion of three-year notes sold at a spread of Treasuries plus 275 bps.

A $1.5 billion tranche of five-year notes was priced with a spread of 310 bps over Treasuries.

Full terms of the offering were unavailable at press time.

Banca IMI, Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were bookrunners.

The financial services company is based in Turin, Italy.

RBC prices five-years

Royal Bank of Canada priced $1.25 billion of five-year notes (Aa3/AA-/AA) to yield Treasuries plus 72 bps, a market source said.

The notes were not actively seen in late afternoon secondary trading, a bond source said.

"It seems like it kind of got put away," the source said, quoting the notes at 72 bps. "Didn't trade a lot."

The notes were sold at the tight end of talk in the 75 bps area.

Full terms of the trade were unavailable at press time.

Bookrunners were RBC Capital Markets LLC and J.P. Morgan Securities LLC.

The financial services company is based in Toronto.

GE Capital's short floaters

General Electric Capital sold $1.25 billion of two-year floating-rate notes (A1/AA+/) at par to yield Libor plus 37 bps, a market source said.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets LLC and RBS Securities Inc. were bookrunners.

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

MetLife sells in two parts

MetLife Institutional Funding priced $1 billion of floating-rate notes (Aa3/AA-/AA-) in two maturities, a market source said.

There was $400 million of one-year floaters priced at par to yield Libor plus 7 bps.

A $600 million tranche of two-year floaters sold at par to yield Libor plus 37 bps.

Bookrunners were Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and UBS Securities LLC.

The funding arm of MetLife Insurance Co. is based in New York City.

Westpac prices $2.25 billion

Westpac Banking sold $2.25 billion of notes (Aa2/AA-/), an informed source told Prospect News.

There was $1.25 billion of three-year notes priced at a spread of Treasuries plus 60 bps. Pricing was at the tight end of guidance in the 62.5 bps area, plus or minus 2.5 bps.

A $1 billion sale of five-year notes priced at a spread of 80 bps over Treasuries which was in line with guidance.

Full terms of the offering were not available at press time.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used for general corporate purposes.

The Sydney, Australia-based financial services company was last in the U.S. bond market with a $2.25 billion sale of notes in two parts on Sept. 18.

Public Storage's preferreds

Public Storage sold $450 million of 5.2% series W cumulative redeemable preferred shares of beneficial interest, a market source told Prospect News.

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

Price talk is 5.25% to 5.375%, according to a trader, and expected ratings are A3/BBB+/A-.

"It's doing pretty well," he said, seeing paper trade around $24.70 in the gray market as of midday. Public Storage issues typically tend to do well in the primary.

Later in the day, the trader said the preferreds were trading around $24.77.

After the bell, another market source quoted the issue at $24.75 bid, $24.85 offered.

"That's average-ish," he said of the paper's performance. "Not really good, not really bad."

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners.

The Glendale, Calif.-based real estate investment trust intends to list the new preferreds on the New York Stock Exchange under the ticker symbol "PSAPW."

Proceeds will be used to pay down a revolving credit facility and for general corporate purposes.

GE Capital active

In the secondary market, GE Capital's notes were trading slightly weaker on Monday, a trader said.

The $1.4 billion of 1% three-year notes were quoted at 69 bps bid, 66 bps offered on Monday after trading at 68 bps bid, 65 bps offered on Friday.

The notes sold at a spread of Treasuries plus 72 bps.

The $2 billion tranche of 3.1% 10-year notes also traded 1 bp weaker at 120 bps bid, 118 bps offered.

The notes sold at a spread of 122 bps over Treasuries before tightening to 119 bps bid, 117 bps offered on Friday.

General Electric Capital also priced a $600 million tranche of floating-rate notes as part of the $4 billion offering.

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

Stephanie N. Rotondo and Cristal Cody contributed to this review

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