Regency Centers, Nordic Investment Bank price bonds in quick deals; Goldman gains in trading

By Andrea Heisinger and Cristal Cody

New York, May 27 - Just as quickly as bonds filled the market the previous day, new investment-grade issues mostly dried up on Thursday.

Regency Centers LP and Nordic Investment Bank were the only issuers. The Regency sale was a late addition to the market and priced after the close.

The real estate investment trust sold $150 million of 10-year notes.

Nordic Investment Bank priced its $1.25 billion sale of five-year global bonds early in the day.

Issuance has likely died off due to the upcoming Memorial Day weekend, and further fears about economies around the world and the oil spill in the Gulf of Mexico.

"I think anyone that was going to go already did [yesterday]," a source said at the end of the day. "You have to be in a certain position to get a deal done."

In secondary activity Thursday, Goldman Sachs Group Inc.'s new and existing high-grade debt firmed in trading, according to sources.

The CDX Series 14 North American investment-grade index was 9 bps stronger at a mid bid-asked spread level of 115 bps, according to a market source.

Treasuries were weaker while stocks jumped on renewed investor confidence

Yields on 10-year Treasury notes were 17 bps weaker at 3.36%, the biggest increase since March. Yields on two-year notes eased 7 bps to 0.85%. Yields on 30-year bonds also moved out to 4.25% from 4.09% on Wednesday.

Stocks rose, with the Dow Jones Industrial Average up 285.22 points, or 2.86%, at 10,260.

Treasuries had started off strong in line with the euro and markets in Europe and Asia after China denied reports that it would sell its European debt.

Government debt was "basically just trading opposite of stocks," one trader said.

Light activity is expected on Friday on thinly staffed trading desks ahead of the early bond market close and long Memorial Day holiday weekend, sources said.

"I expect it to be very light tomorrow," a trader said. "Only working stiffs."

Regency Centers sells 10-year notes

Regency Centers priced $150 million of 6% 10-year guaranteed notes (Baa2/BBB) late in the day to yield Treasuries plus 275 bps, according to a source who worked on the deal.

There was no price guidance as the sale went out so late, the source said. It was sold on reverse inquiry and books totaled around $200 million.

"A lot of it was done [sold] before," he said. "It was on the calendar, and there was a lot of interest. The books were open for maybe 30 minutes."

The underwriters took orders and launched the sale late, going out around 4 p.m. ET, he said. There was no price guidance because of this.

The sale is guaranteed by Regency Centers Corp.

J.P. Morgan Securities Inc. and Wells Fargo Securities were bookrunners.

Proceeds are being used to repay debt maturing in 2010, including the repayment of $130 million in 8.45% notes due September 2010, and $10 million of 8% notes due Dec. 15, 2010. The remainder will be used for general corporate purposes, including payment of a line of credit maturing in February 2011.

The owner and operator of retail shopping centers is based in Jacksonville, Fla.

Companies look to coming week to issue

Most traders and syndicate desks left early on Thursday and won't be back until Tuesday, meaning the new issue market is effectively closed until then.

"Look at today," a syndicate source said. "Equities were up on a rally, but with bonds there was nothing out there but one small deal."

"The next deals won't be until Tuesday or Wednesday," he said.

The high-grade market was shaky all week, but that didn't stop several large sales from getting done on Wednesday.

A long holiday weekend is not ideal for pricing bonds, a source said.

"You don't want to get caught up in exposure," he said. "That's why everyone's already gone for the weekend."

Nordic Investment Bank sells $1.25 billion

Nordic Investment Bank sold $1.25 billion of 2.5% five-year global notes (Aaa/AAA) at 99.76, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were Credit Suisse Securities Europe Ltd., HSBC Bank plc, Nomura International plc and RBC Capital Markets Corp.

The lender for Nordic countries is based in Helsinki, Finland.

Goldman tighter

While Goldman Sachs' new 6% senior notes (A1/A/A+) due 2020 were active soon after they priced on Wednesday at Treasuries plus 280 bps, the notes were not as visible in Thursday's market though they were tighter, according to sources.

In addition, Goldman's existing 10-year debt that priced in March firmed more than 30 bps in early trading.

"Surprisingly, I didn't see much on the new GS," a trader said. "Last I saw hours ago," the notes were at 270 bps bid, 266 bps offered.

Goldman's 5.375% notes due 2020, which it sold in March, traded early in the day at 228 bps over Treasuries, compared to 261 bps early Wednesday, a source said.

The New York-based investment bank's high-grade debt has been volatile in trading since the Securities and Exchange Commission filed civil fraud charges over the bank's mortgage investment practices in April. The bank has denied wrongdoing.

Bank/brokerage CDS costs fall

A trader who watches the credit-default swaps market said that the cost of protecting holders of bonds issued by major banks like Bank of America, Citigroup and JP Morgan Chase against a possible event of default fell for a second straight day Thursday, declining by between 5 bps and 15 bps on the session, reflecting renewed investor confidence in the sector.

He also saw the CDS protection cost of bonds of major investment banking houses like Morgan Stanley and Goldman Sachs likewise 10 bps to 20 bps lower.

-Paul Deckelman contributed to this report

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