Flow of deals continues as Edwards, TVA, Liberty price; Marriott, Marsh & McLennan notes firm

By Cristal Cody and Aleesia Forni

Virginia Beach, Sept. 24 - The high-grade bond market saw another solid day of new issuance on Tuesday, with more than $4 billion of new investment-grade paper printed during the session.

Edwards Lifesciences Corp., Marsh & McLennan Co. Inc. and Liberty Property LP were among the issuers who brought what were mostly smaller-sized deals to the primary.

The day's largest deal came from Tennessee Valley Authority, which sold $1 billion of 1.75% senior notes at Treasuries plus 43 basis points.

The notes priced at the tight end of talk.

Edwards Lifesciences came to market with $600 million of 2.875% senior notes due 2018, pricing the new issue at Treasuries plus 157 bps.

Meanwhile, Marsh & McLennan sold a two-tranche $500 million deal due 2018 and 2023, with both tranches priced at the tight end of talk.

The company priced $250 million of 2.55% five-year notes at Treasuries plus 115 bps and $250 million of 4.05% 10-year notes at Treasuries plus 145 bps.

There was also a new deal from Liberty Property, which sold $450 million of 4.4% long 10-year notes with a spread of 178 bps over Treasuries.

Marriott International Inc. priced a $350 million issue of 3.375% notes due 2020 on Tuesday with a spread of Treasuries plus 145 bps.

In other primary action, Valley National Bancorp sold a $125 million offering of 5.125% subordinated debentures due 2023.

Tuesday also saw Kommunalbanken AS price $1 billion of 0.875% notes due Oct. 3, 2016 at mid-swaps plus 15 bps.

In the preferred stock market, Morgan Stanley & Co. Inc. sold $750 million of 7.125% fixed-to-floating-rate noncumulative perpetual preferreds.

The primary's pace is not expected to let up as the week goes on.

"We should see another session [with a] good number of new deals," one syndicate source said late Tuesday. "Demand is still there."

Nearly $10 billion of new paper has been sold this week. Sources had predicted $20 billion to $25 billion of new issuance for the week.

Credit spreads ended Tuesday tighter after opening the session weaker, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 1 bps to close at a spread of 79 bps.

In the secondary market, Marsh & McLennan's two tranches of notes came in as much as 10 bps on the offered side, according to a trader.

In other new issue trading, Marriott's 3.375% notes tightened about 3 bps, while Tennessee Valley Authority's 1.75% notes firmed about 1 bp going out.

Tennessee Valley prices tight

The high-grade primary market saw Tennessee Valley Authority price $1 billion of 1.75% senior notes (//AAA) due 2018 on Tuesday with a spread of Treasuries plus 43 bps, according to an informed source.

The notes priced at the tight end of talk.

Pricing was at 99.524 to yield 1.849%.

After pricing, Tennessee Valley Authority's 1.75% notes traded in the secondary market at 42 bps bid, 38 bps offered, a trader said.

Proceeds will be used to repay debt.

BofA Merrill Lynch, Barclays, Morgan Stanley & Co. LLC and TD Securities were the bookrunners.

The government-owned electric utility is based in Knoxville, Tenn.

Kommunalbanken's $1 billion

Meanwhile, Kommunalbanken priced a $1 billion offering of 0.875% notes due Oct. 3, 2016 with a spread of mid-swaps plus 15 bps, according to a market source.

The notes were talked in the area of mid-swaps plus 16 bps.

Pricing was at 99.758 to yield 0.957%.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities and Morgan Stanley were the bookrunners.

The government-funded lender to municipalities is based in Oslo.

Edwards sells five-year notes

Also on Tuesday, Edwards Lifesciences priced $600 million of 2.875% five-year senior notes (Baa3/BBB-/) on Tuesday with a spread of Treasuries plus 157 bps, according to an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.498 to yield 2.983%.

Bookrunners were BofA Merrill Lynch, Morgan Stanley and Goldman Sachs & Co.

Proceeds will be used to repay the company's revolving credit facility and for general corporate purposes.

The Irvine, Calif., company focuses on providing products and technologies to address cardiovascular disease.

Marsh & McLennan prices

Marsh & McLennan priced a $500 million two-part offering of senior notes due 2018 and 2023, according to a market source.

Both tranches priced at the tight end of talk.

The deal included $250 million of 2.55% five-year notes sold with a spread of Treasuries plus 115 bps.

There was also $250 million of 4.05% 10-year notes priced at Treasuries plus 145 bps.

Full terms were not available at press time.

Going out in the afternoon, Marsh & McLennan's 2.55% notes tightened to 105 bps offered, a trader said. The 4.05% notes were seen better at 136 bps offered.

Goldman Sachs, HSBC Securities (USA) Inc., BofA Merrill Lynch and Deutsche Bank Securities Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include the redemption of part of the company's 5.75% senior notes due 2015.

The professional services firm is based in New York City.

Liberty brings $450 million

A new deal came from Liberty Property on Tuesday, as the company hit the primary market with $450 million of 4.4% senior notes due 2024 with a spread of Treasuries plus 178 bps, according to a market source and an FWP filing with the SEC.

The notes priced at 99.699 to yield 4.437%.

BofA Merrill Lynch, Citigroup Global Markets, Goldman Sachs and JPMorgan are the joint bookrunners.

The company intends to use the proceeds to acquire all outstanding general partnership interests and limited partnership interests of the Cabot Industrial Value Fund III Operating Partnership LP.

The real estate investment trust for industrial and office properties is based in Malvern, Pa.

Mariott's new issue

Another new deal came from Marriott International. The company sold $350 million of 3.375% seven-year series M senior notes (Baa2/BBB/) at Treasuries plus 145 bps, according to a syndicate source and an FWP filing with the SEC.

Pricing was at 99.359 to yield 3.478%.

In the secondary market, Marriott's 3.375% notes tightened to 142 bps bid, 141 bps offered, according to a trader.

Bookrunners were Deutsche Bank Securities and Goldman Sachs.

Proceeds will be used for general corporate purposes.

The lodging company is based in Bethesda, Md.

Valley's subordinated notes

The session also saw Valley National Bancorp price a $125 million offering of 5.125% subordinated debentures due 2023, according to a company press release.

Keefe Bruyette & Woods, Sandler O'Neill and Partners LP and Deutsche Bank Securities were the joint bookrunners.

The company plans to use proceeds to redeem its $131.3 million outstanding 7.75% junior subordinated debentures issued to VNB Capital Trust I.

No other details were available at press time.

Valley National Bancorp is a bank holding company based in Wayne, N.J. Its principal subsidiary is Valley National Bank.

Morgan Stanley's preferreds

In the preferreds market, Morgan Stanley sold $750 million of 7.125% series E fixed-to-floating-rate noncumulative perpetual preferreds (Expected ratings: Ba3/BB+/BB/BBB), according to a market source.

Initial price talk was around 7.375% but was later revised lower. The amount was upsized from $250 million.

Morgan Stanley is the bookrunner.

The dividend will be fixed until Oct. 15, 2023, at which time it will begin to float at Libor plus 4.32%. When declared, dividends will be paid on the 15th day of January, April, July and October, beginning Jan. 15, 2014.

On or after Oct. 15, 2023, the New York-based investment bank can redeem the preferreds at par plus accrued dividends. Additionally, the firm can call the issue in whole within 90 days of a regulatory capital treatment event.

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

Proceeds will be used for general corporate purposes.

Bank/brokerage CDS costs flat

Investment-grade bank and brokerage CDS costs went out on Tuesday unchanged to a little wider, according to a market source.

Bank of America Corp.'s CDS costs were unchanged at 100 bps bid, 104 bps offered. Citigroup Inc.'s CDS costs widened 1 bp to 94 bps bid, 98 bps offered. JPMorgan Chase & Co.'s CDS costs rose 1 bp to 85 bps bid, 89 bps offered. Wells Fargo & Co.'s CDS costs closed flat at 60 bps bid, 64 bps offered.

Merrill Lynch's CDS costs ended unchanged at 94 bps bid, 99 bps offered. Morgan Stanley's CDS costs saw no change on the day at 129 bps bid, 133 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 1 bp to 120 bps bid, 124 bps offered.

Paul Deckelman and Stephanie N. Rotondo contributed to this review

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