Freeport-McMoRan, Coca-Cola cap February with a bang; new issues trade better in secondary

By Aleesia Forni and Andrea Heisinger

New York, Feb. 28 - A $6.5 billion sale in four parts from Freeport-McMoRan Copper & Gold Inc. led the investment-grade bond market on Thursday as the company looked to fund acquisitions.

The private sale included maturities of 2018, 2020, 2023 and 2043. Proceeds are being used to fund the acquisitions of Plains Exploration & Production Co. and McMoRan Exploration Co. for about $9 billion.

Elsewhere in the primary, Coca-Cola Co. tapped the market for $2.5 billion of notes in three parts. The sale included a two-year floating-rate note, along with five-year notes and 10-year bonds.

Canada's Rogers Communications Inc. priced $1 billion of senior notes split evenly between maturities of 2023 and 2043.

ING Bank NV priced $1 billion of three-year notes in two parts - one with a fixed rate and the other floaters. Terms of the Rule 144A and Regulation S sale were not available at press time.

The Netherlands' Siemens Financieringsmaatschappij NV sold $500 million of five-year notes as a portion of a partly euro-denominated offering.

Ford Motor Credit Co. LLC tapped the market for $500 million of split-rated floating-rate notes due 2014.

Another split-rated sale came from FirstEnergy Corp. The Ohio-based diversified energy company priced $1.5 billion of notes in two parts, including $650 million of five-year paper and $850 million of 10-year bonds. Terms of the sale were not available at press time.

National Australia Bank Ltd. priced $1.75 billion of five-year covered bonds.

A $1.25 billion sale of five-year notes came from sovereign Council of Europe Development Bank.

In the preferred stock market, Ventas Realty LP sold $225 million of $25-par 30-year senior notes. The size was increased from $150 million.

"I don't think I've ever seen a preferred out of them before," a trader said.

The trader saw the issue at $24.70 bid in the midday gray market, down from an earlier high of $24.78 bid.

At the close, a preferred stock market source pegged the issue at $24.90 bid, no offers.

A syndicate source who worked on the Coca-Cola trade said that "the rush was on" for some issuers to tap the market for financing needs ahead of any fallout from the Senate sequester that could cause $85 billion of spending cuts this fiscal year and more in 2014 if a replacement is not approved prior to Friday.

The Coke sale saw roughly $5.4 billion in demand, including $900 million on the two-year floaters, $3 billion on the five-year notes and $1.5 billion on the 10-year tranche.

Demand remains strong for floating-rate notes, although the day's largest sale -from Freeport-McMoRan - was without them.

A source said there was roughly $12.5 billion in bonds priced Thursday, not including the NAB or Ventas sales or those from emerging markets. So far, this week has seen about $25.45 billion in new issues, the source said.

"Not too bad for what we were expecting," the source said.

The Markit CDX Series 18 North American Investment Grade index tightened 2 basis points to a spread of 88 bps on Thursday.

"The new issues are all looking better [in trading] from where I'm sitting," one trader said near the end of the day, though he added there had been some weakening in the secondary market on the day.

The trader quoted Coca Cola's new notes due 2018 2 bps at 43 bps bid on Thursday.

Another market source saw Rogers Communications' notes trading 3 bps to 4 bps better late in the session.

Freeport McMoRan's notes were also trading better, tightening 3 bps to 12 bps in the secondary.

Freeport's monster deal

Freeport-McMoRan Copper & Gold priced $6.5 billion of senior notes (Baa3/BBB/BBB) in a private offering, a syndicate source said.

The $1.5 billion of 2.375% five-year notes was sold at a spread of Treasuries plus 162.5 bps. Guidance was in the 162.5 bps to 175 bps range.

The notes were quoted at 150 bps bid, 145 bps offered near the end of the day's trading.

A $1 billion tranche of 3.1% seven-year notes was priced at 187.5 bps over Treasuries. The notes were talked in the 187.5 bps to 200 bps range.

A market source saw the notes at 179 bps bid, 174 bps offered.

There was $2 billion of 3.875%10-year notes priced at Treasuries plus 200 bps. The tranche had guidance in the 200 bps to 212.5 bps range.

The notes traded at 197 bps bid, 192 bps offered near the day's close.

Finally, there was $2 billion of 5.45% 30-year bonds sold at a spread of Treasuries plus 237.5 bps. The bonds were talked in the 237.5 bps to 250 bps range.

The notes were quoted at 233 bps bid, 228 bps offered.

Pricing was done under Rule 144A and Regulation S.

Active bookrunners were BofA Merrill Lynch and J.P. Morgan Securities LLC.

Proceeds, along with those from a term loan, are being used to fund the Plains Exploration & Production Co. and McMoRan Exploration Co. acquisition, including payment of cash consideration for the acquisition and repayment of Plains Exploration certain debt.

There is a change-of-control put at 101 if the acquisition's not completed by June 5, or Sept. 5 if an extension is granted.

The international mining company is based in Phoenix.

Coke prices $1.5 billion

Coca-Cola was in the market with a $2.5 billion sale of senior notes (Aa3/AA-/A+) in three tranches, an informed source said.

The sale included $500 million of two-year floating-rate notes priced at par to yield Libor minus 2 bps. The floaters were talked in the Libor minus 1 bp to 2 bps area.

There was $1.25 billion of 1.15% five-year notes sold at a spread of Treasuries plus 45 bps. Guidance was in the Treasuries plus 50 bps area initially, and later revised to the 45 bps to 48 bps range.

The notes were quoted at 43 bps bid, 40 bps offered.

A $750 million tranche of 2.5% 10-year notes sold at 67 bps over Treasuries. These notes had initial talk in the low-to-mid 70 bps area, with a later revision to the 67 bps to 70 bps range.

BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC were bookrunners.

Proceeds are being used to fund the discharge and redemption of outstanding 5% notes due 2013, 7.375% notes due 2014 and 4.25% notes due 2015 issued by subsidiary Coca-Cola Refreshments USA, Inc. Note proceeds will also be used to pay related fees and expenses from the redemptions and for general corporate purposes.

The Atlanta-based beverage company was last in the U.S. bond market with a $2.75 billion sale in three maturities on March 9, 2012.

Rogers prices in two parts

Rogers Communications priced $1 billion of senior notes (Baa1/BBB/) in two tranches, according to an FWP with the Securities and Exchange Commission.

The sale included $500 million of 3% 10-year notes sold at a spread of Treasuries plus 113 bps.

A $500 million tranche of 4.5% 30-year bonds was priced at a spread of 145 bps over Treasuries.

A trader quoted the 10-year notes 4 bps better at 109 bps bid, 106 bps offered, while the source saw the 30-year bonds at 142 bps bid, 140 bps offered.

BofA Merrill Lynch and J.P. Morgan Securities LLC were active bookrunners.

Proceeds are being used for general corporate purposes.

The sale is guaranteed by Rogers Communications Partnership.

The wireless and cable TV company is based in Toronto.

NAB's covered bonds

National Australia Bank priced $1.75 billion of 1.25% five-year covered bonds (Aaa//AAA) to yield mid-swaps plus 42 bps, or Treasuries plus 58.5 bps, an informed source said.

Bookrunners were BofA Merrill Lynch, Barclays, HSBC Securities USA Inc., National Australia Bank and RBC Capital Markets LLC.

The bank and financial services company is based in Melbourne.

Ford sells floaters

Ford Motor Credit priced $500 million of senior floating-rate notes due 2014 (Baa3/BB+/BBB-) at par to yield Libor plus 110 bps, according to an FWP filing with the SEC.

Bookrunners were Citigroup Global Markets Inc. and RBC Capital Markets LLC.

The financing arm of automaker Ford Motor Co. is based in Dearborn, Mich.

Siemens' $500 million

Siemens Financieringsmaatschappij sold $500 million of 1.5% five-year notes as part of a multi-tranche sale that included two maturities of euro-denominated bonds, a market source said.

The notes (Aa3/AA+/) were priced at mid-swaps plus 65 bps, or 80.9 bps over Treasuries.

The sale is guaranteed by Siemens AG.

Bookrunners were BofA Merrill Lynch, HSBC Securities USA Inc. and UBS Securities LLC.

The financial services company is based in The Hague, The Netherlands.

CEB's five-years

Council of Europe Development Bank sold $1.25 billion of 1% five-year senior notes (Aaa/AA+/AA+) to yield mid-swaps plus 17 bps, or Treasuries plus 33.3 bps, according to an FWP with the Securities and Exchange Commission.

Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. International and TD Securities USA LLC were bookrunners.

The financing and development institution for social projects in Europe is based in Paris.

Ventas sells $25-pars

Ventas Realty sold $225 million of 5.45% $25-par senior notes due 2043, according to an FWP with the SEC.

Price talk was originally 5.5% to 5.675%, but was revised to around 5.5%, according to a trader. The size was increased from a planned $150 million.

BofA Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC were the joint bookrunners.

The notes will be unconditionally guaranteed by Ventas Inc. and become redeemable in 2018 at par plus accrued interest.

The company intends to list the notes on the New York Stock Exchange.

Proceeds will be used to repay amounts outstanding under an unsecured revolving credit facility and for working capital and other general corporate purposes, including future acquisitions or investments.

Ventas is a Chicago-based real estate investment trust.

Stephanie N. Rotondo contributed to this review

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