Mattel, BNY Mellon, Verizon, QVC tap market; Freeport bonds weaken; Mattel tightens in secondary

By Andrea Heisinger

New York, March 4 - A rash of new issues was announced on Monday, although none seemed intent on matching the size of multi-billion dollar sales from the previous week.

Toy maker Mattel, Inc., Bank of New York Mellon Corp., M&T Bank Corp., Southern California Edison Co. and Verizon Communications Inc. were among those pricing bonds.

BNY Mellon sold $1.5 billion of notes in four parts, split between tranches with fixed-rate or floating-rate coupons. Two had maturities of 2016, and the other two parts mature in 2018.

Mattel priced $500 million of paper, split evenly between maturities of 2018 and 2023.

Southern California Edison sold $400 million of 30-year first and refunding mortgage bonds.

Buffalo, N.Y.-based M&T Bank sold $770 million of notes in two tranches after a three-year floater was added to the sale that initially was for five-year fixed-rate notes.

Terms of the sale were not available at press time.

Verizon Communications did a private $500 million sale of two-year floating-rate notes to redeem commercial paper.

There was also a split-rated offering from QVC, Inc. and a sovereign trade announced by Germany's FMS Wertmanagement.

QVC priced $1.05 billion of senior secured notes. The size of the sale was increased from $750 million and included tranches of 10-year notes and 30-year bonds.

American Tower Corp. was in the market with a $1.8 billion sale of secured bonds in two tranches priced via Rule 144A and Regulation S.

A reopening of floating-rate notes due 2016 to add $200 million came from Germany's Erste Abwicklungsanstalt.

The preferred stock market saw a new $200 million deal from Public Storage. The perpetual shares had an initial size of $100 million.

A syndicate source said that March could see "an uptick" in bond sales totaling $80 billion to $100 billion. February saw more than $90 billion of new corporate bonds sold, according to Prospect News data.

The secondary market was "holding its own" as it continued to absorb the more than $25 billion of bonds sold the previous week, a trader said at midday.

By the close of the day's session, another trader called the day "sideways."

"It was weaker to start, stronger at the close," he said.

The new Mattel bonds were seen between 2 basis points and 5 bps tighter at the close of the day's session, a source said. Southern California Edison's 30-year bonds were unchanged in trading.

Among the recent issues seen trading, the bonds from Freeport McMoRan Copper & Gold Inc.'s $6.5 billion sale in four parts were spotted. Two of the bonds were quoted between 6 bps and 14 bps tighter at midday. By day's end, a trader quoted the four bonds as "marginally weaker" overall.

Two fixed-rate bonds from Coca-Cola Co. were quoted 2 bps improved from pricing levels.

An outstanding 30-year bond from Hess Corp. was seen atop the day's most active issuers as of early afternoon, a trader said.

"They've been up and down all day," another secondary source said.

The New York City-based global energy company was in the news after it would shift its business focus.

BNY sells in four parts

The Bank of New York Mellon sold $1.5 billion of notes (Aa3/A+/AA-) in four tranches, a source close to the trade said.

There was $300 million of three-year floating-rate notes sold at par to yield Libor plus 23 bps. Talk was at the Libor equivalent of the three-year fixed-rate bond.

A $300 million tranche of 0.7% three-year notes priced at Treasuries plus 38 bps. Talk was in the 50 bps area.

The $600 million of 1.35% five-year notes was sold at a spread of Treasuries plus 60 bps. Guidance was in the low 70 bps area.

Finally, there was a $300 million tranche of five-year floaters priced at par to yield Libor plus 44 bps.

Barclays, BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc. and Goldman Sachs & Co. were bookrunners.

BNY was last in the U.S. bond market with a $1.5 billion sale in three tranches on Oct. 18, 2012. That offering included a 0.7% three-year note priced at 33 bps over Treasuries and a 1.3% five-year note sold at 55 bps over Treasuries.

The financial services company is based in New York City.

Mattel prices tight

Mattel priced $500 million of notes (Baa1/BBB+/) in two maturities, an informed source said.

The sale included $250 million of a 1.7% five-year note priced at a spread of Treasuries plus 95 bps. Pricing was at the low end of talk in the 100 bps area, plus or minus 5 bps.

The notes were seen 5 bps tighter at 90 bps bid, 87 bps offered after the close.

A $250 million tranche of 3.15%10-year notes sold at a spread of 130 bps over Treasuries. Pricing was at the tight end of guidance in the 135 bps area, plus or minus 5 bps.

A source quoted the notes at 2 bps tighter, with a bid of 128 bps, 123 bps offered. A second trader quoted the bonds at 129 bps bid, 126 bps offered after the close.

Active bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay outstanding 5.625% notes due March 15, with coupons ranging from 6.5% to 6.61% due November of 2013, and for general corporate purposes.

The toy maker is based in El Segundo, Calif.

Verizon sells $500 million

Verizon Communications was in the market with a $500 million sale of two-year floating-rate notes (A3/A-/A) priced at par to yield Libor plus 20 bps, a market source said.

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

Citigroup Global Markets Inc. was bookrunner.

Proceeds will be used to reduce commercial paper.

The broadband and telecommunications company is based in New York City.

SoCal's 30-years

Southern California Edison priced a $400 million sale of 3.9% 30-year first and refunding mortgage bonds (A1/A/A+) at Treasuries plus 83 bps, according to an FWP filing with the Securities and Exchange Commission.

A trader quoted the bonds at 83 bps bid, 81 bps offered at the close.

Active bookrunners were J.P. Morgan Securities LLC, RBS Securities Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc.

Proceeds are being used to repay commercial paper borrowings and for general corporate purposes.

The electric utility is based in Rosemead, Calif.

QVC prices crossover

QVC priced an upsized $1.05 billion sale of senior secured notes (Ba2/BBB-/BBB-) in two maturities, an informed source said.

The total size was increased from $750 million. The sale is guaranteed by all material domestic subsidiaries.

A $750 million tranche of 4.375% 10-year notes sold at a spread of Treasuries plus 250 bps.

There was also $300 million of 5.95% 30-year bonds priced at a spread of Treasuries plus 285 bps.Barclays, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were bookrunners.

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

Proceeds, along with cash on hand, are being used to fund a cash tender offer for $500 million of 7.125% senior secured notes due 2017 and up to $250 million of 7.5% senior secured notes due 2019.

The notes are secured by a first-priority lien on the capital stock of QVC.

The home shopping retailer is based in West Chester, Pa.

American Tower preps sale

American Tower is preparing a $1.8 billion sale of secured tower revenue securities, series 2013-1 and series 2013-2, (Aaa//AAA) through indirect subsidiaries, according to a market source and press release.

Pricing is expected on Tuesday.

The sale includes a $500 million tranche of five-year securities and a $1.3 billion tranche of 10-year notes.

Pricing is being done under Rule 144A and Regulation S.

Bookrunners are Barclays, Morgan Stanley & Co. LLC, BofA Merrill Lynch and Credit Suisse Securities (USA) LLC.

The securities are backed by debt of two special purpose subsidiaries of American Tower and will be secured primarily by mortgages on their interests in 5,195 communications sites, according to the press release.

The issuers plan to use the proceeds to repay all amounts outstanding under their debt backing the series 2007-1 commercial mortgage pass-through certificates and for general corporate purposes.

American Tower is a Boston-based independent owner, operator and developer of wireless and broadcast communications real estate.

EAA reopens floaters

Germany's Erste Abwicklungsanstalt reopened its issue of floating-rate notes due January of 2016 to add $200 million, a market source said.

The notes priced at 100.271 with a coupon on Libor plus 30 bps.

Total issuance is $750 million, the source said.

Credit Suisse Securities (USA) LLC was bookrunner.

The Dusseldorf public law agency is charged with winding up portfolios transferred to it.

Public Storage's preferreds

Public Storage sold $200 million of 5.2% series X cumulative perpetual preferred stock.

The preferreds will be issued as depositary shares representing a 1/1,000th interest, according to a prospectus filed with the Securities and Exchange Commission.

Price talk was around 5.25%, a trader said.

"They'll probably tighten that up," he said, seeing the issue trading around $24.75 in the midday gray market.

"It doesn't sound like they are going to have a selling group," he added.

The trader then quoted the securities at $24.70 bid, $24.85 offered.

Post-pricing, a source said the paper got as high as $24.85 bid, $24.95 offered, but settled back in at $24.74 bid, $24.82 offered.

The source said the softness came after the deal was doubled and tightened.

BofA Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

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

Proceeds will be used for general corporate purposes, which may include acquisition and development of self-storage facilities and investment in self-storage entities.

Freeport bonds tighten

Phoenix-based mining company Freeport McMoRan saw its 2.375% notes due 2018 at a bid of 148 bps and an offer of 143 bps at midday of Monday's session.

By the close, a trader quoted them at 145 bps bid, 143 bps offered. This was much tighter than the 162.5 bps over Treasuries price from Thursday, and similar to the 145 bps trading level from Friday.

A 3.1% note due 2020 from the same issue was about 6 bps tighter at midday, at 181 bps bid, 177 bps offered. The notes sold at 187.5 bps.

By the close, the bonds had moved tighter to 179 bps bid, 178 bps offered.

A trader quoted the 3.875% notes due 2023 as giving up some of the gains from Friday, trading at 200 bps bid, 195 bps offered. This is unchanged from the 200 bps over Treasuries pricing spread, and 11 bps wider than Friday's bid.

The 5.45% bonds due 2043 were seen as 4 bps better than their 237.5 bps price, quoted at 233 bps bid, 200 bps offered at the close. This was 3 bps wider than Friday's level.

Coke bonds move in

Two fixed-rate bonds from a $2.5 billion, three tranche sale done Thursday by Coca-Cola were trading tighter on Monday, a source said.

A trader said at midday that the 1.15% five-year note was at 43 bps bid, 40 bps offered. Pricing was at 45 bps over Treasuries. Meanwhile, the 2.5% 10-year notes were at 65 bps bid, 66 bps offered - in from the price of 67 bps.

The beverage company is based in Atlanta.

Hess bonds active

Energy company Hess saw its 5.6% bonds due Feb. 15, 2041 among the day's most actively traded paper on news that it would focus on exploration and production of oil and natural gas.

The $1.25 billion of bonds, sold on Aug. 5, 2010, traded at a spread of 215 bps over Treasuries as of midday. This was 55 bps wider than the bonds' original price of 160 bps over Treasuries.

Stephanie N. Rotondo contributed to this review

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