Wellpoint, Berkshire, EOG, Principal among huge slate of deals; Waste Management notes firm

By Aleesia Forni and Andrea Heisinger

New York, Sept. 5 - The high-grade bond market exploded with deals on Wednesday.

Wellpoint, Inc. brought a $3.25 billion offering in four tranches to help fund its acquisition of Amerigroup. The size was initially talked at $2 billion and could have gone as high as $4.2 billion, sources said.

A source said there was "more than $13 billion on the books" for the Wellpoint deal.

"It was a good trade," the source said. "I think some wanted it to be better."

EOG Resources, Inc. did a $1.25 billion sale of notes due 2023.

There was a $750 million deal in three tranches of reopened notes by Berkshire Hathaway Finance Corp. All three of the notes were from a deal priced in May by the Omaha-based company.

NVR Inc. upsized its sale of 10-year notes to $600 million from $500 million. The deal was sold wider than where it was talked.

There was a $600 million offering split equally between notes due 2022 and 2042 from Principal Financial Group, Inc. Both tranches were sold considerably tighter than initial guidance.

Waste Management, Inc. priced $500 million of 10-year notes.

There was an upsized $350 million deal from Marriott International, Inc. The lodging company increased the size of its trade from $300 million, a source said.

Chicago-based CME Group Inc. was in the market with an upsized $750 million of 10-year notes to help pay for the retirement of notes due in 2013.

Nissan Motor Acceptance Corp. did a private sale of five-year notes that was upsized to $650 million from $500 million.

There were two crossover trades done on the high-grade syndicate desks.

Verisk Analytics, Inc. priced $350 million of 10-year senior notes after the size was increased from $250 million.

SLM Corp., which is also split-rated, priced $800 million in two tranches. A three-year note was added to the planned five-year tranche.

A small $155 million sale of notes due 2014 was priced by Associated Banc-Corp.

Germany's Landwirtschaftliche Rentenbank priced $1.5 billion of five-year notes after the deal went overnight from Tuesday.

Another sovereign in the market was Kommunalbanken AS with a reopening of five-year floating-rate notes.

The Netherlands priced $3.5 billion of three-year notes in a direct auction.

Plans were announced by the Royal Bank of Scotland Group plc to sell notes in the U.S. bond market, with timing dependent upon conditions.

The preferred stock market was once again active with a new deal announced by PS Business Parks Inc. The size of the sale was initially $100 million but was upped to $200 million.

The Markit CDX Series 18 North American Investment Grade index tightened 1 basis point to a spread of 100 bps on Wednesday.

In secondary trading, Marriott International's 10-year notes were seen at 166 bps offered near the end of the day, while Waste Management's notes due 2022 tightened 1 bp.

In other trading, bank bonds including Bank of Nova Scotia's notes due 2015, Merrill Lynch's notes due 2018 and JPMorgan Chase & Co.'s notes due 2019 tightened on the day.

Bond market run spurred by ECB

The first two days of the short week were brimming with new deals because companies were vying to price deals ahead of any sort of announcement from the European Central Bank in the second half of the week, sources said late Wednesday.

The ECB is expected to announce some sort of government bond-buying venture in a meeting on Thursday. This is part of the effort to stall the euro zone's debt crisis.

The huge influx of new deals is set to be cut severely on Thursday and Friday as issuers back off.

"I'm not hearing of anything yet for tomorrow," a syndicate source said late in the day. "It's looking really quiet."

About $10 billion of corporate bonds were priced on Wednesday. They followed a $13 billion day Tuesday.

Wellpoint's massive trade

Health benefits company Wellpoint sold $3.25 billion of bonds (Baa2/A-/BBB+) in four maturities, a source close to the trade said.

The size was larger than talk of $2 billion.

A $625 million tranche of 1.25% three-year notes priced at a spread of Treasuries plus 95 bps. This was well below talk in the 125 bps area.

A $625 million tranche of 1.875% notes due 2018 was sold at 130 bps over Treasuries. The notes also priced tighter than guidance in the 155 bps area.

A $1 billion tranche of 3.3% notes due 2023 was priced at a spread of 175 bps over Treasuries. The tranche sold tighter than talk in the 200 bps area.

There was $1 billion of 4.65% bonds due 2043 sold at 200 bps over Treasuries. The bonds were priced lower than talk in the 220 bps area.

"All I saw was a gray market offer on the long bond [of] 191 [bps]," one trader said near the end of the session.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. were the bookrunners.

Proceeds are being used to pay a portion of the purchase price for the acquisition of Amerigroup and for general corporate purposes.

There is a mandatory call at 101 if the acquisition is not done on or before Sept. 9, 2013.

Wellpoint is based in Indianapolis.

EOG sells $1.25 billion

EOG Resources sold $1.25 billion of 2.625% senior notes due 2023 (A3/A-/) at a spread of Treasuries plus 110 bps, an informed source said.

The active bookrunners were Barclays, Citigroup, J.P. Morgan Securities LLC, UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used for general corporate purposes including repayment of outstanding commercial paper and funding future capital expenditures.

The Houston-based crude oil and natural gas company was last in the market with a $1.5 billion deal in three tranches on Nov. 18, 2010. That sale included a 4.1% 10-year note priced at 125 bps over Treasuries.

Waste Management's $500 million

Waste Management sold $500 million of 2.9% 10-year senior notes (Baa3/BBB/BBB) at a spread of Treasuries plus 135 bps, a source away from the trade said.

The notes were quoted 1 bp tighter at 134 bps bid, another source said.

The bookrunners were Barclays, BNP Paribas Securities Corp. and Bank of America Merrill Lynch.

Proceeds are being used to repay $400 million of 6.375% senior notes maturing in November and for general corporate purposes including working capital and capital expenditures.

The deal is guaranteed by Waste Management Holdings Inc.

The waste collection, recycling and disposal company is based in Houston.

Berkshire's reopenings

Berkshire Hathaway Finance priced $750 million of senior notes (Aa2/AA+/A+) in three reopenings, a market source said.

A 1.6% note due 2017 was reopened to add $325 million. The bonds were priced at a spread of 57 bps over Treasuries. Total issuance is $1.08 billion including $750 million priced on May 8.

There was a retap of 3% notes due in 2022 to add $200 million. The notes were priced at Treasuries plus 107 bps. Total issuance for the 10-year notes is $550 million including $350 million sold May 8.

Finally, there was a reopening of 4.4% notes due 2042 to add $225 million. The new bonds priced at 142 bps over Treasuries. Total issuance is $725 million including $500 million priced May 8.

Goldman Sachs & Co. and Wells Fargo were the bookrunners.

Proceeds are being used to redeem 5.125% senior notes due in 2012.

The deal is guaranteed by Berkshire Hathaway Inc.

The holding company for various subsidiaries is based in Omaha.

Principal does two tranches

Principal Financial Group sold $600 million of senior notes (A3/BBB+) divided equally between two tranches, a source close to the trade said.

The $300 million of 3.3% 10-year notes priced at a spread of 175 bps over Treasuries. The notes priced tighter than talk in the 217.5 bps area with a margin of plus or minus 2.5 bps.

There was also $300 million of 4.625% 30-year bonds sold at a spread of 195 bps over Treasuries. The bonds were also sold tighter than talk in the 240 bps area.

The bookrunners were Barclays, Citigroup and Wells Fargo.

Proceeds are being used for general corporate purposes including repayment of $400 million of 7.875% notes due March 15, 2014, along with potential acquisitions and organic growth.

The deal is guaranteed by Principal Financial Services, Inc.

The retirement savings, investment and insurance products company is based in Des Moines, Iowa.

CME's $750 million deal

CME Group sold an upsized $750 million of 3% 10-year senior notes (Aa3/AA-/) at a spread of 145 bps over Treasuries, an informed source said.

The deal size was increased from $500 million, the source said.

The active bookrunners were Bank of America Merrill Lynch, Barclays and UBS Securities.

Proceeds, along with cash on hand, are being used to retire outstanding 5.4% notes due in August 2013.

The holding company of four futures exchanges is based in Chicago.

Marriott upsizes

Marriott International sold an upsized $350 million of 3.25% 10-year senior notes, series L, (Baa2/BBB/BBB) to yield 170 bps over Treasuries, a source away from the deal said.

The notes were priced at 99.711 to yield 3.284%.

The notes were seen trading at 166 bps bid late in the day.

JPMorgan and Wells Fargo ran the books.

Proceeds are being used for general corporate purposes.

The lodging company is based in Bethesda, Md.

NVR prices wide

Reston, Va.-based homebuilder NVR priced an upsized $600 million of 3.95% 10-year senior notes (Baa2/BBB/BBB+) to yield 237.5 bps over Treasuries, a market source said.

The bonds were sold wider than guidance in the 225 bps area. The size of the deal was increased from $500 million.

The bookrunners were Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and Wells Fargo.

Proceeds are being used for general corporate purposes, including the repurchase of common stock.

Nissan prices $650 million

Nissan Motor Acceptance sold an upsized $650 million of five-year senior medium-term notes (A3/BBB+/) at a spread of Treasuries plus 135 bps, a market source said.

The size of the trade was increased from $500 million. The full terms were not available at press time.

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

The bookrunners were Bank of America Merrill Lynch and Citigroup.

Nissan Motor Acceptance was last in the market with a $1 billion offering in two tranches on Jan. 20, 2010 that included a 4.5% five-year note priced at 220 bps over Treasuries.

The financing and leasing company for Nissan vehicles is based in Irving, Texas.

Verisk's crossover deal

Verisk Analytics priced a crossover deal of $350 million 4.125% 10-year senior notes (Ba1/BBB-/A-) at 262.5 bps more than Treasuries, an informed source said.

The size of the trade was increased from $250 million. The notes were priced at the tightest end of guidance in the 262.5 bps to 287.5 bps range, the source said. A separate source saw the bonds being talked in the 275 bps area.

Bank of America Merrill Lynch, JPMorgan and Wells Fargo were the bookrunners.

Proceeds are being used to repay a portion of debt under a revolving credit facility.

The deal is guaranteed by subsidiaries that guarantee the company's revolver.

The risk analysis and management company is based in Jersey City.

SLM's two tranches

SLM priced $800 million of senior notes (Ba1/BBB-/BBB-) in two tranches, a source away from the deal said.

The offering was increased from its initial single tranche of $500 million five-year notes to add a three-year maturity.

The $300 million of 3.875% three-year notes priced at par to yield 3.875% with a spread of Treasuries plus 356.4 bps.

A $500 million tranche of 4.625% five-year notes sold at a spread of Treasuries plus 425 bps.

The bookrunners were Bank of America Merrill Lynch, Barclays and RBC Capital Markets LLC.

Proceeds are being used for general corporate purposes.

The provider of education loans is based in Newark, Del.

Associated sells short bond

Associated Banc-Corp sold $155 million of 1.875% senior notes due 2014 (Baa1/BBB/) to yield Treasuries plus 165 bps, according to an FWP filing with the Securities and Exchange Commission.

Credit Suisse was the bookrunner.

Proceeds are being used to finance the redemption of three trust preferred securities.

The bank holding company is based in Green Bay, Wis.

RBS plans sale

Royal Bank of Scotland Group is considering a sale of senior notes in the U.S. bond market, according to a news release.

The timing of the deal is dependent on market conditions.

Proceeds from the sale would be used for general corporate purposes.

The financial services company is based in Edinburgh.

WPP gives terms

WPP Finance 2010 gave the terms of its $800 million issue of senior notes (Baa2/BBB/) done in two parts, according to an FWP filing with the Securities and Exchange Commission.

The $500 million of 3.625% 10-year notes was priced at a spread of 215 bps over Treasuries. The notes were sold much tighter than initial talk in the 245 bps area.

A $300 million tranche of 5.125% 30-year bonds sold at a spread of Treasuries plus 250 bps. The bonds were priced lower than initial guidance in the 280 bps area.

Barclays, Bank of America Merrill Lynch, BNP Paribas, Citigroup, HSBC Securities (USA) Inc. and RBS Securities Inc. ran the books.

Proceeds are being used for general corporate purposes including repayment of certain group debt.

The deal is guaranteed by WPP plc, WPP Air 1 Ltd., WPP 2005 Ltd. and WPP 2008 Ltd.

The communication services company is based in Dublin.

Rentenbank sells

Landwirtschaftliche Rentenbank sold $1.5 billion of 0.875% five-year notes on Wednesday to yield mid-swaps plus 15 bps, or 31.7 bps over Treasuries, a market source away from the trade said.

The deal priced at the tight end of talk in the mid-swaps plus 17 bps area.

The notes (Aaa/AAA/AAA) were priced at 99.776. There is no call option.

Goldman Sachs International, HSBC Securities (USA) LLC and Nomura Securities International Inc. were the bookrunners.

Proceeds are being used to finance lending activities.

The development agency for agribusiness is based in Frankfurt.

Kommunalbanken reopens

Norway's Kommunalbanken reopened an issue of floating-rate notes due March 2017 to add $300 million, a market source said.

The notes (Aaa/AAA/) were priced at 100.374 with a coupon of Libor plus 38 bps.

Total issuance is $1.2 billion.

The bookrunners were Bank of America Merrill Lynch, Citigroup and Morgan Stanley & Co. LLC.

The bank provides low-cost funding to municipalities and is based in Oslo.

Netherlands sells $3.5 billion

The Netherlands, through the Dutch State Treasury Agency, sold $3.5 billion of 0.25% three-year bonds to yield mid-swaps plus 5 bps, a market source said.

The notes (Aaa/AAA/AAA) were announced on Tuesday with the size increased from $2 billion. Pricing was at the tight end of guidance in the mid-swaps plus 5 bps to 8 bps range.

The sale was done through a direct auction.

PS Business Parks' preferreds

PS Business Parks is offering $200 million of 5.75% series U cumulative perpetual preferred shares, according to a press release.

Pricing was originally talked around 5.875% but was revised to 5.75%. The deal was upsized from $100 million.

There is a $30 million over-allotment option.

The preferreds will be issued as $25 depositary shares each representing a 1/1,000th interest in a preferred.

The company will apply to list the new securities on the New York Stock Exchange under the ticker symbol "PSBPU."

Bank of America Merrill Lynch, Morgan Stanley and Wells Fargo were the bookrunners.

Proceeds will be contributed to the company's operating partnership, PS Business Parks LP, in exchange for preferred units of limited partnership that have substantially identical economic terms as the preferreds. The funds will be used for general corporate purposes, including the redemption of all outstanding 6.7% series P cumulative preferreds on Oct. 9.

PS Business is a Glendale, Calif.-based real estate investment trust.

JPMorgan tighter

The secondary market saw the $3 billion 6.3% issue from JPMorgan due 2019 tighten 2 bps to 105 bps bid.

JPMorgan priced the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

Scotiabank firms

Bank of Nova Scotia's 1.85% notes due 2015 tightened 1 bp on Wednesday to 49 bps bid, according to a market source.

The bank priced the $1 billion issue at 147 bps over Treasuries in January 2012.

Merrill Lynch tightens

In other trading, Merrill Lynch's 6.875% notes due 2018 tightened 3 bps to 309 bps bid near the end of New York's session.

On April 22, 2008, the bank priced $5.5 billion of the 10-year notes at 320 bps over Treasuries.

Stephanie N. Rotondo contributed to this review

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