GE Capital, Deutsche Telekom, Raymond James tap primary; Texas Instruments' CDS widen on deal

By Andrea Heisinger and Cristal Cody

New York, April 4 - General Electric Capital Corp. and Deutsche Telekom International Finance BV were the two largest sales on Monday as the month of April opened with plenty of new deals.

Late in the previous week, sources had predicted a slowdown in new deals as companies enter earnings blackout.

Deutsche Telekom sold $1.25 billion of five-year notes under Rule 144A. It was joined by another large trade from GE Capital totaling $1.5 billion of three-year floating-rate notes. The sale priced at the tight end of guidance.

Raymond James Financial, Inc. and Hormel Foods Corp. also sold bonds to start the week.

Raymond James priced $250 million of five-year notes while Hormel sold $250 million of 10-year notes.

A $2 billion sale of five-year notes was priced early in the day by International Finance Corp., market sources said, but terms were not available at press time. The AAA rated deal was sold by Daiwa Securities, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Inc.

Real estate investment trust Public Storage announced a sale of cumulative preferred stock. Pricing is expected on Tuesday.

Issuance isn't expected to be blockbuster for the week as companies enter blackout.

"It's going to be pretty boring," one source said. "We'll probably see a lot of Yankee bonds. Those always pop out of the woodwork [during earnings]."

Other than the already announced offering from Public Storage, corporate bond sales are expected to be light in the coming days.

Bonds started moving in the secondary market after Dallas-based Texas Instruments Inc. announced plans to buy National Semiconductor Corp. of Santa Clara, Calif. for about $6.5 billion, or $25 a share, in cash, according to sources.

"The CDS is 12 basis points wider on TXN," a trader said.

In secondary trading, the new bonds from GE Capital, Raymond James and Deutsche Telekom all tightened, traders said.

"Generally it's 2 to 3 [basis points] better across the board," one trader said.

Overall investment-grade Trace volume rose 14% to about $11.8 billion, according to a market source.

Treasuries ended the day "mostly higher," sending yields down on the short end of the curve on a day where the focus turned to the Federal Reserve's bond buyback, a source said.

The 10-year benchmark Treasury note yield fell 2 bps to 3.42%. The 30-year bond was flat on Monday at a yield of 4.48%.

GE Capital's floaters

GE Capital priced $1.5 billion of three-year floating-rate notes (Aa2/AA+) by mid-afternoon at par to yield Libor plus 63 bps, said a source away from the deal.

The notes sold at the tight end of guidance in the Libor plus 65 bps area, a source said.

Bookrunners were Barclays Capital Inc., Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc.

The floaters due 2014 were seen trading early in the secondary market at 61 bps bid, 56 bps offered, a trader said.

Closing out the day, another trader said the notes "look like 60, 56."

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

Deutsche Telekom private sale

Deutsche Telekom International Finance sold $1.25 billion of 3.125% five-year notes on Monday at a spread of 95 basis points over Treasuries, an informed source said.

The notes (Baa1/BBB+/BBB+) were priced at 99.899 to yield 3.147%. They carry a make-whole call at 15 bps over Treasuries.

The securities sold under Rule 144A.

Bookrunners were Citigroup Global Markets Inc., Credit Suisse Securities LLC and Goldman Sachs & Co.

The notes traded in the late afternoon slightly firmer at 94 bps bid, 92 bps offered, a trader said.

The funding unit of telecommunications company Deutsche Telekom AG is based in Bonn, Germany.

Raymond James' five-years

Raymond James Financial sold $250 million of 4.25% five-year notes (Baa2/BBB) to yield Treasuries plus 210 bps, said a source who worked on the trade.

The notes sold at the tight end of guidance in the 215 bps area, with a margin of plus or minus 5 bps.

The sale was about five times oversubscribed, the source said.

Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. were bookrunners.

Proceeds are going toward working capital and general corporate purposes.

In secondary trading, Raymond James' notes due 2016 firmed to 197 bps bid, 193 bps offered, a trader said.

Another trader saw the notes wider at 203 bps bid, 191 bps offered.

The financial services company is based in St. Petersburg, Fla.

Hormel sells $250 million

Hormel Foods sold $250 million of 4.125% 10-year notes (A2/A) at a spread of Treasuries plus 75 bps, according to an FWP filing with the Securities and Exchange Commission.

Sources away from the sale said they were surprised by the low spread the deal had.

"I don't think it was hugely oversubscribed," one source said, "so that probably didn't drive it down."

The size of the deal was not increased from what was announced.

A second source said, "The bonds were doing really well in trading."

Bookrunners were J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc. and Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes.

The food company is based in Austin, Minn.

Public Storage preferreds

Public Storage announced a sale of perpetual cumulative preferred shares, series Q, priced at $25, according to a 424B5 filing with the SEC.

The preferreds were talked in the range of 6.5% to 6.625% on Monday, a market source said. Pricing is expected for Tuesday.

The shares are callable on or after April 2016.

Bookrunners are Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc. and Wells Fargo Securities LLC.

Senior co-manager is UBS Securities LLC and junior co-managers are RBC Capital Markets and Credit Suisse Securities (USA) LLC.

Proceeds are being used to redeem depository shares representing interest in 7.25% cumulative preferred shares, series I, at $25 per share together with accrued and unpaid dividends.

The notes were "trading around 24.65" in the gray market, a source said.

The real estate investment trust of storage facilities is based in Glendale, Calif.

Stephanie Rotondo contributed to this review

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