Rabobank, Entergy Arkansas, Tri-State sell bonds; Heico plans deal; CBS, Celgene paper firms

By Andrea Heisinger and Cristal Cody

New York, Oct. 5 - Entergy Arkansas, Inc., Rabobank Nederland and Tri-State Generation & Transmission Association Inc. were in the high-grade bond market on an otherwise quiet Tuesday.

Rabobank sold the largest deal with its $1.5 billion issue of guaranteed five-year notes.

New Orleans-based Entergy Arkansas sold an upsized $225 million of 30-year first mortgage bonds at $25 each. They were sold at the tight end of price guidance.

There was a quiet reopening of 6% first mortgage bonds due 2040 by electric cooperative Tri-State Generation & Transmission to add $100 million. The original sale was done in June.

A $120 million issue of 10-year notes was announced by Heico Cos. LLC and Heico Holding Inc., but at press time it was unclear if it had priced. The company is selling the bonds under Rule 144A, and an indirect subsidiary is also selling Canadian notes.

In the secondary market, the new paper from Celgene Corp. and CBS Corp. firmed on Tuesday, sources said.

Corporate high-grade bonds in the homebuilding sector traded up 0.5 basis point to 1 bp, a trader said.

"Building material bonds were up around a half point," the trader said. "Just in general a very positive tone in the market."

Overall investment-grade Trace volume climbed 36% to $15 billion, according to a market source.

The Markit CDX Series 14 North American investment-grade index on Monday narrowed on Tuesday by 6 bps to a spread of 99 bps, Markit Group Ltd. said.

U.S. Treasuries rallied on the short end while the long end fell on Tuesday as expectations that the Federal Reserve will implement another round of quantitative easing weighed on bonds.

The yield on the two-year note dropped to 0.33% from 0.40%. The yield on the benchmark 10-year note fell 2 bps to 2.46%. The 30-year bond yield rose 3 bps to 3.74%.

Entergy Arkansas upsizes 30-year

Entergy Arkansas priced an upsized $225 million of 5.75% 30-year first mortgage bonds (A3/A-) by early afternoon at par of $25, according to an FWP filing with the Securities and Exchange Commission.

The yield was talked in the range of 5.75% to 5.875% and priced at the tight end of that. The deal size was originally $150 million when it was announced on Monday in a 424B3 filing with the SEC.

Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the bookrunners.

Proceeds are going to repay outstanding debt due 2032 with interest rates ranging from 6% to 6.7% per year and for general corporate purposes.

The subsidiary of energy company Entergy Corp. is based in New Orleans.

Rabobank prices $1.5 billion

Rabobank Nederland sold $1.5 billion of 2.125% five-year notes at Treasuries plus 98 bps by late afternoon, a source close to the trade said.

The notes (Aaa/AA) are guaranteed by Rabobank's New York branch.

The bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc. and Goldman Sachs & Co.

The notes traded tighter on the bid side, a source said.

"There was a 96 bid out there, but I didn't see any real follow-through on that one," the trader said.

The agribusiness lender is based in Utrecht, the Netherlands.

Issuance stalls

There were no big changes in the tone of the investment-grade market for the day, but issuance was still light, with no increase expected for the rest of the week.

"I don't know if people were spooked by some headline or if everyone's just holding off on earnings," a market source said late in the day.

"I mean, we've seen a lot [of deals] lately, so it's not a surprise."

There was a light calendar expected, with deals for the week expected to total less than $20 billion.

"If we even hit that I'd be surprised," another source said.

Tri-State reopens bonds

Tri-State Generation & Transmission Association reopened its issue of 6% first mortgage bonds due 2040 to add $100 million, a market source away from the trade said late Tuesday.

The bonds (Baa1/A) priced at 107.264 to yield 5.5% with a spread of Treasuries plus 176 bps.

Total issuance is $500 million, including $400 million priced on June 3 at 187.5 bps over Treasuries.

Credit Suisse Securities was bookrunner.

The electric cooperative is based in Westminster, Colo.

Heico plans 10-year sale

Heico Cos. and Heico Holding are planning a $120 million sale of 10-year senior unsecured notes, a market source said.

Heico Canada Holding Co., which is an indirect subsidiary of Heico Holding, is also planning a C$130 million sale of 10-year senior unsecured Canadian notes.

The notes (/BBB-/BBB-) are being priced under Rule 144A.

J.P. Morgan Securities LLC and UBS Investment Bank are the bookrunners.

Proceeds are being used for general corporate purposes, including the repayment of debt.

The buyer of distressed companies in the industrial and manufacturing sector is based in Downers Grove, Ill.

Celgene firmer

Celgene's $1.25 billion of senior unsecured notes (Baa2/BBB-) sold in two tranches the previous day were stronger in secondary trading, a source said.

The first tranche of 2.45% notes due 2015 firmed in trading to 123 bps bid, 117 bps offered, the source said. The notes priced at a spread of Treasuries plus 125 bps.

Celgene's second tranche of 3.95% notes due 2020 priced at a spread of 150 bps over Treasuries. The notes were seen 5 bps tighter on the bid side at 145 bps.

The last tranche of 30-year bonds, which priced at a spread of Treasuries plus 200 bps, firmed on the offer side to 191 bps, the source said.

The biopharmaceutical company is based in Summit, N.J.

CBS tightens

The $600 million of senior unsecured notes (Baa3/BBB-/BBB-) that CBS priced in two tranches on Monday narrowed in the secondary market, a trader said Tuesday afternoon.

"Today, it's another 5 basis points better," the trader said.

The $300 million of 4.3% notes due 2021 priced at a spread of Treasuries plus 185 bps.

"The 21s are 177, 175 right now," the trader said.

The second tranche of $300 million in 5.9% bonds due 2040 priced at 220 bps over Treasuries and firmed late Tuesday to 212 bps bid, 209 bps offered, the trader said.

The broadcast and media company is based in New York.

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