Medtronic, NStar, Columbus Southern price; more expected Friday; Medtronic gains in trading

By Andrea Heisinger and Cristal Cody

New York, March 11 - Medtronic, Inc., NStar Electric Co. and Columbus Southern Power Co. were the issuers on a solid Thursday in the investment-grade market.

Two of the deals were on the small side and priced relatively quickly. The three-tranche sale from Medtronic was the largest and only one to top $1 billion.

Medtronic sold $3 billion in three tranches late in the afternoon. The sale consisted of $1.25 billion of both five-year and 10-year notes and $500 million of 30-year bonds.

NStar Electric got its deal done early, pricing $300 million of 30-year debentures by early afternoon.

Electric company Columbus Southern priced $150 million of two-year floating-rate notes.

RenRe North America Holdings Inc. announced a sale of five-year notes in a filing with the Securities and Exchange Commission. It is expected to price on Friday, a source close to the sale said.

Deutsche Bank Contingent Capital Trust V is planning to reopen its 8.05% perpetual trust preferred securities to add shares priced at par of $25, according to an SEC filing late in the day.

New deals should slow "somewhat" on Friday, a source said at the end of the day.

"I wouldn't think there's much [out there]," he said.

A syndicate source said his desk still had a couple of small trades that could possibly price to end the week.

Although a whirlwind of new offerings hit the market on Thursday, Medtronic's $3 billion of new tranches quickly tightened in trading as the "only real deal," according to sources.

Also on Thursday, Citigroup Capital XII's trust preferred securities gained in trading, while the bid on NStar Electric moved out in the secondary, according to sources.

Overall Trace volume fell 8% to about $12 billion, according to one source.

The CDX Series 13 North American high-grade index again was unchanged at a mid bid-asked spread level of 83 bps, according to a market source.

Meanwhile, U.S. Treasuries were mixed on Thursday. The 10-year Treasury note yield eased 1 bp to 3.73%. Meanwhile, the yield on the 30-year bond firmed 2 bps to 4.67%.

Medtronic prices $3 billion

Medtronic sold $3 billion of senior unsecured notes (A1/AA-) in three tranches late in the day, a source close to the offering said.

The $1.25 billion of 3% five-year notes priced at a 60 bps over Treasuries spread.

A $1.25 billion tranche of 4.45% 10-year notes priced to yield Treasuries plus 75 bps.

The third tranche was $500 million in 5.55% 30-year bonds priced at a spread of Treasuries plus 90 bps.

All of the tranches were priced at the tight end of talk, a source said.

Deutsche Bank Securities, Goldman Sachs & Co. and J.P. Morgan Securities were active bookrunners. Proceeds will be used for working capital and general corporate purposes, including debt repayment.

The medical technology company is based in Minneapolis.

Tone holds, new deals continue

The high-grade market's tone was "unchanged" at the end of the day, a source said.

Spreads remained generically tighter at the beginning of the day, which prompted even more new bonds into an already crowded market.

The coming day is likely to have some deals, but nothing too blockbuster as syndicate desks clean up from a hectic week.

"We have a lot to mop up," a source at a smaller desk said. "We had a lot of deals this week."

Other than the RenRe sale, there are others on the fence.

There have been more than $28 billion in deals for the week, including both corporate and sovereign sales.

This is the most volume the market has seen for a while, after weeks of minimal issuance and an uneasy tone.

"It's good to be busy," a source said.

He expects the coming week will also have its share of bond sales, but added: "I'm not sure it will be as busy."

NStar sells 30-year bonds

NStar Electric priced $300 million of 5.5% 30-year unsecured debentures (A1/A+) early in the day at Treasuries plus 90 bps, an informed source said.

Bookrunners were Citigroup Global Markets and J.P. Morgan Securities.

Proceeds will be used to repay a portion of short-term debt.

The utility is based in Boston.

Columbus Southern prices short floaters

Columbus Southern Power priced $150 million of two-year floaters (A3/BBB/A-) by early afternoon at par to yield three-month Libor plus 40 bps, according to an FWP filing with the SEC.

Barclays Capital ran the books.

The proceeds will be used for general corporate purposes, including the possible repayment of $100 million of a promissory note to parent company American Electric Power Co., Inc., due on March 15.

The electric company is based in Columbus, Ohio.

RenRe plans five-year sale

RenaissanceRe Holdings Ltd. unit RenRe North America Holdings announced a sale of five-year senior unsecured notes (A3/A/A-) on Thursday, according to a 424B2 filing with the SEC.

They are set to be priced on Friday, a source said late in the day.

The deal is guaranteed by parent company RenaissanceRe Holdings.

Bank of America Merrill Lynch and Citigroup Global Markets are bookrunners.

Proceeds will be used for general corporate purposes, including repayment of $80 million in intercompany borrowings.

The reinsurance company is based in Plano, Texas.

Deutsche Bank to reopen trust preferreds

Deutsche Bank Contingent Capital Trust announced plans late in the day to reopen its 8.05% perpetual trust preferred securities to add shares priced at par of $25, according to a 424B2 filing with the SEC.

The deal is guaranteed on a subordinated basis by parent company Deutsche Bank AG.

The new shares will be added to the 50.6 million shares issued on May 9, 2008.

Deutsche Bank Securities is running the books.

NStar Electric bid wider

Looking at utilities in the secondary, NStar Electric's new bonds due 2040 widened slightly on the bid side, according to a trader.

NStar priced the 5.5% 30-year bonds at Treasuries plus 90 bps.

Late Thursday, the notes were quoted at 91 bps bid, 85 bps offered.

Medtronic tightens

Meanwhile Medtronic's $3 billion of notes in five-, 10- and 30-year tranches firmed in secondary trading.

The notes due 2015 priced at Treasuries plus 60 bps and firmed to 58 bps bid, 53 bps offered, according to one trader.

Later in the day, the five-year notes were seen at 57 bps bid, 55 bps offered, a source said.

Also, Medtronic's notes due 2020 were priced at Treasuries plus 75 bps and tightened to 72 bps bid, 71 bps offered.

The 10-year notes were last seen at 72 bps bid, 70 bps offered, according to sources.

Medtronic also sold bonds due 2040 priced at Treasuries plus 90 bps. The bonds were tighter on the offer side at 90 bps bid, 88 bps offered, a source said.

The offering was the "only real deal today," one trader said.

"They don't have a lot of debt outstanding and investors can use it to diversify from finance paper - everyone is loaded up on financials," the trader said.

In addition, tight credit spreads attracted attention on Thursday.

"Maybe some don't want to miss the boat."

Citigroup trust preferreds gain

Although Citigroup Inc. unit Citigroup Capital XII's trust preferred securities are rated junk, the 8.5% trust preferreds due 2040 gained in trading, according to a source on Thursday.

New York-based financial services company Citigroup Capital priced $2 billion, or 80 million shares, of the preferreds at par of $25 on Wednesday.

The securities (Ba1/BB-) are guaranteed by Citigroup Inc.

On Thursday, "not much" was seen in trading for the preferreds, but one trader "did see" the securities at 25.30 bid, 25.40 offered.

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